#245: 2023 – Navigating the narratives


At the start of 2023, an impartial observer could easily conclude that ‘the world has gone mad’. This is most evident in what is sometimes called ‘the public discourse’. Where our economic prospects are concerned, what we are witnessing must rank as the most extreme case of collective denial ever experienced.

Few would dispute that the economy went badly awry last year. In concrete terms, there were widespread and severe falls in living standards, whilst the cost of mortgages and credit rose markedly. Asset prices started their descent from absurdly over-inflated levels.

But there’s a lot that didn’t happen in 2022, but may be lying in wait in the year ahead. Air has started to leak out of the “everything bubble” but it hasn’t, thus far, actually burst, as most bubbles do. We’ve yet to see a cascade of defaults on credit commitments, though this could be a logical corollary of asset price slumps (which impair collateral), and of declining household disposable incomes and falling corporate profitability, most obviously in discretionary sectors.

This is for real

This isn’t intended as a forecast, and we cannot rule out a gradual retreat from the excesses fuelled by a combination of economic deterioration, cheap credit and cheaper money.

Rather, the point is that we need to take this very seriously indeed, and that’s the intention here. The world is awash with “narratives”, and this combines with two factors – the rapidity of change, and the highly elevated levels of risk – to require a focus on what we can know, rather than on what we can only speculate about.

Where “narratives” are concerned, the orthodox line remains that, once the pandemic and the war in Eastern Europe are behind us, the global economy will return to perpetual growth, with technology delivering a shiny new world of prosperity powered by limitless amounts of climate-friendly renewable energy.

This, both in detail and in toto, is at the far end of implausible. Growth in material prosperity has gone into reverse, and claims to the contrary are in direct conflict, not just with logical analysis, but with the lived experiences of millions as well.

De-globalization is already underway, and the much more serious process of the de-financialization of the economy comes next.

This situation presents us with choices. We can participate in collective denial, or we can analyse the economic and broader situation from a rational point of view, founded in first principles. The latter approach is preferred here. Effective analysis of the economy is perfectly possible, but its results are unpalatable to what we might term ‘the generality of opinion’.

The facts of the matter are simply stated. The harnessing of abundant, low-cost energy from coal, oil and natural gas triggered two centuries of remarkable economic growth. Now, though, fossil fuel energy has ceased to be low-cost and can be expected, in consequence, to become a lot less abundant as well. With no complete replacement available for the energy value hitherto sourced from fossil fuels, the economy can only contract.

In no particular order of priority, our second problem is the environmental and ecological harm inflicted by historic and continuing use of carbon energy. On the basis of fossil fuels, the economy has evolved into a dissipative landfill system. Energy is used to process raw materials into products whose ultimate (and usually rapid) destination is disposal. This involves the conversion of energy from concentrated into diffuse form. The latter is waste heat which, in a system powered by fossil fuels, contains climate-harming gases.

None of what we are experiencing now has happened without prior warning. The remarkably prescient The Limits to Growth (LtG), published back in 1972, used system dynamics to forecast declines in industrial output and the supply of raw materials, combined with a worsening in what was then termed “pollution”. These warnings were very largely ignored, not because they were wrong, but because they were inconvenient.

At a humbler and less ambitious level, the SEEDS economic model provides a nearer-term, financially-calibrated interpretation which accords with the prognosis of LtG.

SEEDS draws two important distinctions. One of these is the difference between economic output and material prosperity. The other is the distinction between the ‘real’ or material economy of energy and the ‘financial’ or proxy economy of money and credit.

The interpretation and projections produced by SEEDS are unsettling, in that they involve a continuing deterioration in material prosperity and the fracturing of a financial system entirely predicated on the assumption that prior growth in the economy could never go into reverse.

A series of outcomes follows from this. The first is that, whilst prosperity erodes, the real costs of energy-intensive necessities will rise. This process of affordability compression has two principal effects. One is that consumption of discretionary products and services will contract, and the other is that payment streams from households to the corporate and financial sectors will be undermined.

The latter takes us into the financial system, where successive exercises in denial-gimmickry have created an enormous bubble in asset prices, and a gigantic network of interconnected financial commitments that cannot be honoured. Where these liabilities are concerned, we don’t even have complete data, let alone plans for managing a contraction which seems likely to be disorderly. One consequence is that, whilst the onset of ‘de-globalization’ has started to gain some notice, the process of de-financialization has not.

As assumptions degrade, narratives proliferate

During two centuries of rapid economic expansion, various observations have taken on the status of certainties. Quite naturally, people have come to believe that economic expansion is the natural order of things. Few may pay much attention to announcements about rising GDP – the metric which purports to measure prosperity – but it has long been taken for granted that the material circumstances of individuals and families will improve over time, and that children will be better off than their parents were at any given age.

What we have been experiencing in recent years has been the rapid degradation of such certainties. How individuals react to this dislocation necessarily varies. Some take a “Pollyanna” stance, embracing denial, and accepting the line that growth will resume once the sheer bad luck of a pandemic and a war in quick succession is behind us.

Others, translating “Bond villains” from book and screen to real life, seek someone to blame, which could be anyone from Mr Putin to schemers plotting in the shadows. Still others side with Cassandra, predicting imminent collapse and dusting off the old sandwich-boards of “The End is Nigh!”

It seems likely that there’s a large and growing fourth strand of opinion which, whilst uncommitted to any of the above, is mystified and increasingly suspicious. For many, bafflement and mistrust may be just a few short steps from anger.

The approach preferred here is that of rational analysis and informed debate. I believe that the best process for the advancement of understanding is courteous, informed and reasoned discussion, and I am deeply grateful to everyone who has contributed to our conversations over the past twelve months. A notable milestone was passed in 2022 when, for the first time, more than 80,000 different people from around the world – to be exact, from 154 countries – visited this site at least once.

The immediate plan is to set out a comprehensive statement of what we know about the economy and the financial system from the energy-based perspective. This cannot be accomplished in a single article, but it seems important that we codify our understanding.

Finally, it’s worth remarking that the dissipative-landfill model isn’t some kind of eternal verity. It isn’t the only way to manage the provision of goods and services to the public, and it didn’t exist in anything like its current form before the Industrial Revolution.

The pre-industrial economy might be described as sustainable, but there are two big snags with trying to create “sustainable 2.0”. The first of these is that the global population now numbers eight billion, up from about 660 million in 1776, when the first efficient mechanism for converting heat into work was unveiled.

The second is that the immaterial end-product of the dissipative-landfill system is a set of entrenched attitudes, assumptions which are now colliding with the reality of resource and environmental limits.

Life in agrarian times wasn’t a bucolic idyll and, in any case, we can’t go back to it. What we can do is to analyse the unfolding situation objectively, looking for rationally-based visibility on how events are likely to unfold.

Whilst anyone can leap to conclusions and assumptions, knowledge can only be reached through plodding and faltering steps.

222 thoughts on “#245: 2023 – Navigating the narratives

  1. Thank you Dr Tim, for the first article of 2023. I think it sets the scene nicely for “old hands” and also for “Newbies” to the debate.

    It’s great to see the scale and breadth of visitors to your site. Hopefully, some of them will belong to that elusive sect we call the “establishment insiders”.

    I look forward to a year of high quality analysis and debate, and hope that the dialogue manages to stay on subject. We did wander off into some weird and (not so) wonderful directions towards the back end of 2022.

    Once again, many thanks for everything you put into this project.

    • Thank you Neill.

      My view, as you will have gathered, is that we need to concentrate on the essentials in the weeks and months ahead. The situation is too serious for the weird and not-so-wonderful.

      Visitor numbers were above 83,000 last year, up from a little under 75,000 in 2021, which I think is encouraging.

    • @Neill.

      I’m not entirely sure what ‘on subject’ means for contracting economies within the context of , Surplus Energy Economics, I’d say the scope is vast, but personally, I think agriculture and food sectors – that already run at a calorific NET loss of 10-1 (not including externalities) – probably warrants some priority scrutiny within it all, and it might be an idea to include drinking water as well.
      The subject of food, might appear ‘weird’, but it’s a ‘wonderful’ thing to have it.

      Than you for the first post of 2023, and congrats on the sites success.

    • Thanks EJ.

      Given that economics is a pretty specialised interest, and what we do is long way from the ‘economics 101’ that people are accustomed to, I think 83,000 different visitors in a year is most encouraging. The quality of debate provided by our contributors is a huge factor in this.

      On subject, I think, means the economy as an energy system, its financial parallel, and closely related topics. I can’t over-emphasis how important I think this stuff is, given the accelerating pace of change.

  2. We Americans are in a strange position. America was founded exactly the same time as the industrial revolution 200 years ago. The 2 are so intertwined I don’t know what’s gonna happen as the industrial revolution unwinds.

  3. Thanks for the new article Dr. Tim.

    Good for thought. I have recommended your site to quite a few like-minded people as well as those whodisagree with on the reality of the situation.

    “My view, as you will have gathered, is that we need to concentrate on the essentials in the weeks and months ahead. The situation is too serious for the weird and not-so-wonderful.”

  4. Very Relevant to this post, I suggest, are Gail Tverberg’s predictions (or probabilities) of the various ways people will try to cope with declining prosperity. I couldn’t find a glitch free way to reference it, so just go to ourfiniteworld.com. It’s the January 9 post. I want to add two comments. The New York Times, today, characterized the “radical Republicans” who created gridlock in the House of Representatives as being extremists because, among other things, they insist on a balanced budget. Rhetorically, does the newspaper of record in the financial capital of the US have a lot to learn? The second comment is that the price of something is directly related to its thermodynamic productivity. If the thermodynamic productivity of oil is declining, then the price (as measured by what the world is willing to pay for it in terms of goods and services) must fall. Understanding that point was a major disconnect in the conversation over the Hill’s Group model years ago.
    Don Stewart

    “I believe that a financial crash is likely sometime during 2023. After the crash, the system will start squeezing down on the less necessary parts of the economy. While these changes will start in 2023, they will likely take place over a period of years. In this post, I will try to explain what I see happening.

    Many people believe that oil prices will rise in response to falling production. If the real issue is that the world is reaching extraction limits, the problem may be inadequate demand and falling prices instead.

    Conflict can also take the form of wide differences among political parties, and even within political parties. The difficulty that the US recently encountered electing a Speaker of the House of Representatives is an example of such conflict. Political parties may splinter, making it difficult to form a government and get any business accomplished.

    In a regionally aligned world, the US dollar is likely to lose its status as the world’s reserve currency.

    After a financial discontinuity, “empty shelves” are likely to become increasingly prevalent.”

    • Thanks Don. The two points you make – balanced budgets and the alternatives, and the thermodynamic properties of the economy – are likely to be central points in our forthcoming discussions here.

    • @Don.
      ‘ The second comment is that the price of something is directly related to its thermodynamic productivity’.

      I’m not aware that any mathematical-financial correlation has ever actually been applied to the thermodynamics of hydrocarbons, least not in the wider context of economic activity, yes..of course it’s understood that harnessed energy = work/productivity, but it appears the whole thing has a ham-fisted smash and grab sequential lineage to it from the delusion of infinite hydrocarbon abundance, and yes…more latterly a bit more finesse has been applied to a correlation, but..it’s a bit of a late rear view mirror. I’m not sure we actually know the price of anything tbh, we certainly didn’t ‘value’ it.

      ‘ If the thermodynamic productivity of oil is declining, then the price (as measured by what the world is willing to pay for it in terms of goods and services) must fall’…

      Why must it fall?, given that primary energy density is the enabler of all other economic activity extending from it, and that the demand for it shall always remain from energy hungry economies, then considering the energy density of the substance itself, or even it’s declining physical accessibility, or both, then wouldn’t the price rise?, regardless of willingness to pay. Isn’t this the inflection point?


    • @Entropy Juggler
      Let’s assume that the relationship between goods and services produced and the energy used is a fixed amount. I believe Dr. Morgan has proven that. Then as the free energy declines, will the amount of goods and services produced decline.

      In order for the free energy to decline, and yet the amount of goods and services given to the energy production process to increase, there must be a large reduction in the amount going to everyone else. Or else some magical method must be found to break the historical relationship between energy and goods and services production. The basic assumption is that the economy is a relatively fixed system, and that it will not be radically transformed, so the relative shares will remain unchanged.

      I’m personally willing to relax the assumption of the fixed relationships, but history argues against me. Maybe it will happen…but more likely it won’t, When we have a recession, energy demand falls and the price falls. OPEC attempts to balance it (just as the Texas Rail Road Commission tried). But as they produce fewer barrels, it takes a very large price per barrel increase to result in higher total revenue for them. If they succeed as a cartel, then the rest of the economy suffers the consequences. So we are back to thinking that there its some way that the portions can be changed. Not impossible, perhaps, but is it likely?

      Don Stewart

  5. Thank you.
    As a previous comment said about USA and fossil fuel usage started roughly the same time. As someone on the far west of Canada, we have benefited from the vast store of natural resources available at the time of colonization and are still raping the landscape – see the British documentary on wood for Drax power station as an example – with no thought other than to make lots of money as quickly as we can. We got rid of most of our food production to California and Mexico and our other processing as cheaper and easier to other countries. I have to wonder what the long term will bring.

    • Thanks Bill.

      It’s interesting that 1776, in addition to its significance for the United States, was also (1) the year in which James Watt completed the first really efficient steam-engine and (2) the year when The Wealth of Nations was published. The latter, of course, means that Smith was writing about a pre-industrial economy, nothing like the economy we have today – a point often overlooked. 1776 must be one of the most significant years in history!

    • @Bill Reeves.

      Yes. It’s hard to see the expansion West onto the Great plains as possible without fossil fuels.

      Colonisation of North America came hand in hand with constant technological innovations. The Native Americans really didn’t stand a chance.

      Big question is, can the USA (or Canada) function as a single entity going forward, without fossil fuels?

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  7. Am interesting article that asks some pertinent questions. My problem with the Greens and other environmental groups is that they do not set out plans for what we have to do regarding global warming. Buzz words like hydrogen, biomass, ammonia, sustainable etc. are bandied about but facts and figures are always missing. To replace gas fired boilers with heat pumps in the UK would use between 3-4 times the electrical energy we use to day. Can we make that amount of energy and distribute it? (And the materials needed would have to be mined, transported etc.) My quality of life is outrageous and I doubt it can continue. We manufacture, consume and discard but that is not sustainable. Can we continue to have cars (even electrical) air travel, cruises and Amazon. What we need is a plan before we hit food riots.

  8. I would like to bring two ideas together to perhaps illustrate the problems we face at this exact moment in terms of energy. The first is Wolf Richter (wolfstreet.com) talking about the shifting market shares in the automobile and small truck market. A major factor was the ability of a particular manufacturer to get the exact micro-chip that the vehicle required. If one chip was not available, then the vehicle couldn’t be made and sold. Which tells us something about the incredible complexity and fragility we have built into our just in time, globalized, high technology world.

    The second is this article by Kurt Cobb on the central role of process energy:

    When I was very young my family moved to a small town with a big zinc smelter. I had no idea why the town had a zinc smelter….the zinc mines were a couple of hundred miles away. Somebody recently wrote a history of the town (and, inexplicably, left me out of the story). The authors explain the location of the smelter as having been selected because the town had excellent rail connections and plenty of nearby natural gas. Rather than try to move natural gas to the zinc mines, it was easier to move the zinc by rail to the smelter. The natural gas, of course, supplied the enormous amount of process heat which smelting a metal typically requires. There might be some food for thought for Europe in that history.

    Don Stewart

  9. Thank you Dr Tim. Although I rarely comment, I always follow your excellent articles and those of Gail Tverberg because she is compatible with our joint belief in an energy system. I am please to report that my book has 3,500+ reads this year and I trust your contribution to it has garnered reads for your blog: https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020

    My Substack this year has gained interest as I write my weekly Letter and compose Part 2 of my book. Here is an example:

  10. From the OP:

    “Life in agrarian times wasn’t a bucolic idyll and, in any case, we can’t go back to it. What we can do is to analyse the unfolding situation objectively, looking for rationally-based visibility on how events are likely to unfold.

    Whilst anyone can leap to conclusions and assumptions, knowledge can only be reached through plodding and faltering steps.”

    There are only four approaches to the ecology: industrialism, agrarianism, subsistence pastoralism, and hunting and gathering. When I industrialism goes away — mostly, almost entirely, or altogether — that will leave three approaches, including agrarianism. We can reasonably assume that each approach will be taken up barring extinction. When, Tim, you say we can’t go back to agrarianism I assume you mean as 8B people. I see that as a moot point or red herring because agrarianism 1.0 never had (and couldn’t have ever had) 8bn. Everybody knows that industrial collapse equals population collapse, because food is grown with FF.

    Anyone can indeed leap before they look properly, and that’s what group accountability is for.

    The acquisition of knowledge is no different from the acquisition of any complex skill in that it’s only plodding and faltering at the beginning. We’re not at the beginning are we?

  11. the fracturing of a financial system entirely predicated on the assumption that prior growth in the economy could never go into reverse.

    I would really appreciate a comprehensive look at the fracturing process and the reason(s) why a shrinking economy causes fracturing. Also, where are we likely to find tipping points that force a rapid collapse of the financial system? And if the financial system does fracture, will it actually be possible to maintain industrial economic activity without it or, alternatively, build a new financial system from scratch?

    • @Joe Clarkson
      …a comprehensive look at the fracturing process and the reason(s) why a shrinking economy causes fracturing. Also, where are we likely to find tipping points that force a rapid collapse of the financial system?

      I’m also interested in thoughts on the fracturing process, focussing on 1st world/western economies being the biggest. Global numbers, figures, models, trend analyses etc often ‘wash out’ smaller economies which may stand a better chance of economic sustainable survival through deglobalisation. Some larger economies are opaque (eg China, OPEC) with large uncertainties in their numbers too, and the recent rise of the BRICS may well impact on the global economy in unforeseen ways. The emerging market economies of the 3rd world have already flatlined or not far off, as deglobalisation continues to force heavier and harder contractions in their local economies. The most far-flung in Africa for example, were always likely to be the first to go past tipping-points.

      I figure the impacts of shrinking economy(ies) depends heavily on which specific segments of the economy, their geography (because of supply chain shrinkage), and the speed (rapid or gradual) of the shrinkage with no clear, or abrupt tipping points in the West. I suspect better world economic modelling, might be to focus numbers in major industrial sectors, and geographical regions etc to tease out more reliable trends.

      I suspect IF the fracturing process is ‘managed’ as gradual and targeted shrinkages in smaller baby-steps over several years, by CBs and/or govts and/or nameless PTBs etc, the degrowth and decentralisation may smooth out the decline into a longer tail.

      As Gail Tverberg notes the only way the world economy can recover, at least partially, is by squeezing some non-essential energy uses out of the system.”

      Its how, and where, that ‘Squeezing’ comes is the question. I suspect the initial contractions will be in the goods/service industries, that use a lot of FF to produce goods/services that are not all that essential to basic human population needs, or shrinking production of such inessential goods/services from the decades of obscene oversupply and excesses (eg clothing, textiles, entertainment), or abandoning artificially forced growth tactics such as ‘planned obsolescence’ of common household and electronic goods. Apple has recently canned plans for its latest bells & whistles I-Phone model, due to supply issues as well as falling demand. Destruction of consumer demand, or Tim’s ‘affordability compression’ process will help this part of the fracturing process. Car/vehicle-manufacturing in Europe, Japan etc is currently undergoing significant slow-downs. I read one recent report that if that the current slowdown trend continues, almost all consumer/household vehicle manufacturing across the globe will be gone by 2027 ? Shrinking to just the most essential vehicles, passenger buses, agricultural & mining machinery, trucks etc. Household cars reverse back to being rare luxury goods for filthy rich.

      On the upside this might reduce significant FF consumption and emissions in industrial sectors (as household/consumer use of energy has never been a significant root source of CO2 emissions, relative to what even a basic over-sugared crisps factory uses) – and perhaps we will be able to reduce emissions enough, to meet the IPCC 2030-2050 targets?

    • Affordability compression, and the decline of discretionaries, have been amongst our themes here for a long time. In the series that I have in mind, we’ll get into this in more detail.

    • I can’t answer that in a brief reply here, but I can assure you that we’ll get to it. The plan is to work sequentially from first principles to a comprehensive set of conclusions and projections. That will include both financial system fracture and de-financialization.

    • “Its how, and where, that ‘Squeezing’ comes is the question.”

      Its not a conspiracy if they admit what they’re are doing. The only thing unpleasant about the truth of ongoing planned degrowth is how long you deny the elite are forcing it from the top and wait to change your life to increase resilience. Choose to Refuse to be eaten. Personal responsibility and acceptance of the problem is the 1st step.

      You read a white paper with timelines for digital passports, access/mobility restrictions and rationing of finite resources and share it online.. get deplatformed. Gaslighting is the word of the year for a reason, lol.

      People are losing tbeir whole life and career, suicide, addiction, extemism, freezing and dying for these plans and someone is triggered by mentioning it.


    • @replenish
      I didn’t study all of that closely, but it sounds pretty much like what I think is going to happen one way or the other. Whether the leadership comes from “greening the planet” or “pedal to the metal”…I think we will end up in about the same place.

      As an item of interest, the CEO at Levi’s went for a year wearing the same pair of jeans to the office. Several “beauty” experts are recommending big reduction in the use of those products because they:
      *don’t do any good
      *are actually harmful

      Of course, even making and selling useless or harmful products is SOMEBODY’S LIVING. So there is really no “easy way down”.
      Don Stewart

    • I’m glad you said this isn’t a conspiracy which means, I take it, that it’s in the public domain. I think you know my stance on anything that IS conspiracy-based – we don’t have time for it, given the urgency of the situation and the need for reasoned analysis.

      From the references it seems to be UK-specific.

      Much of what is set out beyond 2050 looks like pipe-dreams. Other parts of it look likely, though through the economic course of events, whether intended or not. I can see, for instance, that there will be lot less aviation and car use in the future. Shipping contraction is more problematic, as this is the only feasible system for international product, component and resource delivery. I don’t see how food reduces, quantitatively – if that’s what the chart means – unless the population reduces.

      Of economic contraction, Barry says here that “[n]o government would dare mention it publicly, or even talk about it behind the scenes, for fear of leakage into the public domain”.

    • Don S. and Dr. Tim,

      Thanks for the replies.

      I feel good about offering high quality content without resorting to the low hanging fruit. Transparency and fostering healthy relationships are key. Firm but fair, very promising!!

      I have been in some dark places after being hopeful about social change and finding that the experts and authorities don’t necessarily play fair. Its dangerous business, trust me.

      “Of course, even making and selling useless or harmful products is SOMEBODY’S LIVING. So there is really no “easy way down”.

      Looking at FF dependency as active addiction that requires daily choices to feed toxic physical and emotional states and herd mentality could be helpful in brraking the cycle and defining principles and offering practical alternatives. Hitting bottom is mandatory. This support group for transition is a nice addition to recovery.. much appreciated. You may save some lives with your balanced, expert approach.

      Kind Regards,

    • Tim

      “I think you know my stance on anything that IS conspiracy-based – we don’t have time for it, given the urgency of the situation and the need for reasoned analysis.”

      Claiming reasoned analysis as being such on the heels of a coerced, non-public, multi-billion-person genetic modification agenda is not a reality-based claim.

      My feeling is that you don’t actually want to Reason-out whether or not the greatest single conspiracy of all-time just happened, because that would mean, in your view overcomplicating your blog project. The problem with compartmentalization is that Reason is holistic and requires the intelligent patterning of the whole; if you refuse to ‘do’ biology and you refuse to ‘do’ conspiracy (otherwise known as collusion), then you refuse to ‘do’ Reason. It’s as simple as that.

      If we can’t defend *every* position we hold — or refuse to — then that’s just an internal psychological conspiracy between the Shadow and the Persona to run public interference on the truth.

      What else is new?

    • “if you refuse to ‘do’ biology and you refuse to ‘do’ conspiracy (otherwise known as collusion), then you refuse to ‘do’ Reason. It’s as simple as that.”

      My position, as I’m sure you know, is to concentrate on energy, the economy and finance. Minor matters, perhaps, and of no particular importance. If I just worked a little harder, I could become an expert on life-sciences and an investigative journalist, reasoning out pandemics and unearthing conspiracies. In the time left over I could become an astronaut, and manage a football team.

      Seriously, what you call “compartmentalization” is what I call specialisation.

  12. Thank you Dr. Morgan, I always look forward to you’re insightful posts. I sometimes think that Western Civ. is at its Belshazzar moment where we can see the writing on the wall and heard an accurate interpretation of the message only to return to the party. Too many people want the party to go on, regardless of the consequences.

    If civilizations truly go through cycles then I postulate that following the past 250 years of growth we will tumble down the slope of contraction and possible collapse over the next 200 – 300 years. I expect some people to dust off their copies of Spengler, Toynbee, and Tainter

    • Thanks Raymond. You are right, the writing is on the wall, and has been for a long time, but can only be seen by those who are willing to look.

    • @ Replenish,
      I had a look at the infographic you posted and didn’t know whether to laugh or cry. Where did that come from? I would like to find the source document.

      As an aside, I find it both frustrating and disingenuous that most advocacy groups pushing for emissions reductions are ignoring the scale and impact of a number of key drivers of global emissions. For example, change in land use (especially destruction of tropical rainforests), the colossal amount of food waste we generate (not to mention over-consumption of calories), and the continual unabated growth in population. It’s just too damned convenient to brush aside such issues and focus on the soft targets. Surely, it’s a hideous contradiction that people are going hungry while at the same time, we send massive amounts of food waste to landfill. Aside from the human suffering aspect, it’s a huge waste of valuable energy and a driver of methane emissions.

      To be clear, I’m not defending our habit of excess consumption. Whole sectors of the economy have emerged in recent years that simply didn’t exist when I was entering the world of work, and I’m sure we could cope if they disappeared just as quickly as they emerged. My point is that there’s some very serious issues that aren’t been given an adequate spotlight, because it’s easier to frame soft targets (such as the internal combustion engine) as the pantomime villain.

    • neill61,

      Here is the source link for the infographic:

      Click to access Absolute-Zero-online.pdf

      Raymond R,

      Thanks for the reading suggestions! I am reminded of that Frank Zappa quote..

      “The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”

      Dr. Tim,

      Thanks for taking time out of your day to share insights from your areas of expertise.

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  14. Thank you, Dr. Tim. How symbolic that the UK’s expensive space rocket was launched last night, only to unfortunately crash into the sea. Kind of sums up the predicament that the country is in!

    The FTSE All-Share yields about 3.5%, no guarantees, whereas you can obtain 4.0% on a one-year cash account. As I firmly believe that the purpose of making an investment is the purchase of an income, suddenly, cash is back on the menu. We all know that we ‘should’ invest in ‘productive assets’ but most people are risk-averse and, notwithstanding current CPI (11.1%), many prefer the guaranteed principal protection approach. Markets set to tumble.

    • Thanks Mark.

      Actually I have mixed feelings about that news story. My first reaction was the same as yours – I don’t think space travel (which this wasn’t, I know) is affordable in a contracting global economy, let alone in the condition the UK is in, and neither can I see any need for more satellites. But I do like to see people trying to accomplish things.

      Once upon a time there were matchboxes called ‘England’s Glory’ which pictured Britain’s latest battleship. A canny artist reproduced this with the ship sinking by the bow.

      As I understand it, this space launch was a private venture. One of Britain’s problems is governmental incompetence. I’m not making a party-political point here, even if I do think the British public deserve a better government than the one they’ve got.

      Rather, the mechanism of government seems to lack the competence that was once taken for granted.

      If we do want a hollow laugh about this, we might think back a few months to Liz Truss condemning Treasury orthodoxy, and trying to replace it with the economics of the mad-house. That went well, didn’t it?

    • Thanks, Tim. Discretionary spending collapse gathers pace. Amazon closing 3 older UK warehouses and Hornby shares down 20%. ‘Britishvolt’ under offer from Indonesian concerned – ‘family silver’ (well, perhaps) solde before it even exists.

    • I think that Mark has given us a wonderful phrase that captures the truly desperate and dire state of the UK: ‘Selling the ‘Family Silver’ before it exists’. Sadly, the statement is correct!

    • I read about the space launch disaster , the Britvolt sell off in today’s press and the FTSE reaching a four year high . A triple whammy.
      However, the puzzle that I cannot quite solve is that the per litre price of petrol at the local pumps has dropped from 195p to 152p . Surely this is contrary to a declining surplus energy situation in a world where FF use should be being discouraged.

  15. @Dr. Morgan
    “I don’t see how food reduces”
    I refer you to this study which traces the ill effects of our ability to produce excess dietary calories on a 24/7 calendar. Our species did not evolve to live in that environment. When you get down to the conclusions, you will see that one promising intervention to get the weight down is drugs. What those drugs do is flush calories out in the urine before we can use them to add fat.

    So we are dealing with a ridiculous situation. The most hopeful goal is that humanity will recover some sanity. But I suspect even cavemen had their share of illusions. We will see how it works out. To me, it’s important for an individual and family to understand how little we actually need.

    Don Stewart

    • Thanks Don.

      Yes, it’s not reason-based to think that an FF-fed agriculture will escape the effects of FF collapse. It’s one thing to say “i don’t see food reducing because it’s the foundation of Maslow’s hierarchy” or whatever, but it’s another thing altogether to say, “I don’t see [*how*] food reduces.”

      Regarding the link, Don, while it’s true that we didn’t evolve as ‘overeaters’ it has nothing to a supposed standard American caveman diet of feast-famine cycle under natural law. That’s just made-up junk anthropology.

      Did humans struggle at times to source food? Sure they did. But we all evolved out of the most competent animists, by evolutionary definition. High-functioning animist cultures always knew the condition of their food supply, and the conditions of the food supply of their food supply, and how those conditions interacted with their own human conditions, the conditions of neighboring human societies, and also with the seasons. ‘Cavemen’ planned for cyclically lean times with long-term food preservation strategies (drying, submerging in cold water, etc).

      Fasting and intermittent fasting are resting/healing/detoxification cycles, and they are entirely needs-based (variable depending on circumstances). They have nothing to do with junk anthropology.

  16. Thanks, Tim, for the very timely reminder of the challenges the world faces in adjusting to the likely sustained, substantial, and hard to reverse fall in living standards imposed by the increasing scarcity of energy and minerals. I have a couple of comments/questions:

    First, as the “marginal product” of fossil fuels still in the ground falls (perhaps at an accelarating rate) due to depletion and the associated increase in (energy) extraction costs, the marginal product of net energy available for use from all sources might remain near current levels or even increase somewhat with efficiency gains — unless social and geopolitical conflicts lead to disruptions. Meanwhile, the price in real terms (i.e. relative to other prices) of a barrel of crude oil traded in the market seems likely to oscillate somewhere between these two extremes — perhaps falling more steeply to the extent that financial difficulties lead to a progressive erosion of refining and distribution capacities?

    Second, the main engine of global growth on the demand side has been arguably, for decades, the large US trade (and current account) deficit, which seems increasingly unsustainable. While manufacturing capacities moved mainly to China, the financing of that deficit (and of the associated US fiscal deficit) became paradoxically dependent on the growth of Chinese holdings of dollar-denominated financial assets. In the face of current geopolitical tensions, how do you all see the possible ways in which both China and the US might adjust towards more sustainable macroeconomic positions?

    Some time ago I shared with Tim my own analysis of the global energy transition and its implications, which you can find in the following link:

  17. Tim, Liz Truss has many faults but her supposedly “grown-up” successors are presiding over an economy where inflation is endemic, productivity is low, taxes go ever upwards (other than for the favoured few) and public services are falling apart….not least because of policies implemented by the “grown ups” during Covid. They have no strategy to make any of this better. Mark has already outlined some of the knock-on effects….

    • On any objective view, the UK is falling apart. The question is how bad it has to get before somebody gets a grip. Mr Sunak’s aim seems to be to nurture his party back to health, gradually and in a low-key way, from the political near-death experience in the autumn. This is about politics, not government.

  18. Thank You again for the view which suggests a direction for those who have options in their lives.

  19. There will be no Agrarian idyll even with technological regression. Only pollution and environmental destruction that we have to deal with when that happens.

  20. Tim, there was no “political near-death experience”. Not least because Truss was not in office long enough. As non-UK commentators have pointed out, the one organisation which messed up badly was the BOE with its non-oversight of the derivatives market, despite plenty of warnings. It then deflected the blame onto Truss. Sunak is most definitely not going to get a grip because he is wedded to the economic policies which have brought us to the stage we are already at. His party and the country know that…. which makes him especially ill-equipped to heal anything.

    • I did say a political near-death experience – the credibility of the party as sound managers of the economy collapsed and so, according to pollsters, did public support. Liz Truss wasn’t in office long, but showed that you can achieve a great deal in a short time if you really put your mind to it!

      I agree about the BoE and derivatives, though I’d say that weak regulation is a worldwide (and enormous) problem. Anyone looking for the next GFC should be looking at NBFIs, yet these are seldom if ever mentioned, even as “the shadow banking system”.

      I’m no admirer of Mr Sunak, and I said that his job, as he sees it, is to regain some public credibility for the Tory party. I didn’t say he’d succeed!

    • “NBFIs”

      Shadow banks? The Automatic Earth used to write about them quite a bit during the 2010 era. But somewhere around 2015 or 2016 things went off the rails and its just one crisis that consumes your attention after another ;). Its funny Trump wasn’t hitler and pangolindeathboogaloo didn’t kill me. When will the rest realize that you’re being told lies while they rob the treasury? Dr. Morgan i’d be interested in an article about the bailouts that occurred in 2020 before every was locked down. Have you ever looked into them or perhaps have an article somewhere else on this site already discussing them?

      This came out at the time but sadly the author hasn’t posted since christmas of 2021. I’m not as well versed in the jargon and only understand some of it.


      Please someone explain to me why it is so wrong to suspect that when you’re being robbed, the person doing it just might not tell you the truth?

    • We looked at NBFIs – non-bank financial intermediaries, or “shadow banks” – in this article in August last year – scroll down to the sub-heading “go figure”. I’m sure we’ll look at it again soon. This sector is, I believe, by far the biggest risk factor where the next financial crisis is concerned.

    • This is a very good report, required reading I’d say. I’ve been saying for quite a long time now that NBFIs are the most likely direction from which the next GFC will come.

      Here’s an instance of what I mean. If somebody with low income and struggling to make ends meet wants a loan, he won’t get it from a bank, because to get a bank loan you need to prove you don’t need it, but from a lender which is likely to be an agency for NBFI money. I doubt if banks would finance buy-now-pay-later operations, but NBFIs would. A lot of it is, I think, done through agencies acting for NBFIs. If that is so, these agencies don’t have their own capital at risk. Separating risk from return is dangerous. It’s what happened in the run-up to 2008.

      NBFIs aren’t regulated, and we don’t even have complete monitoring data, which is optional for jurisdictions. A lot of this is overnight money, and ultra-short credit markets can fail very quickly (remember Northern Wreck which, if I recall correctly, depended heavily on overnight wholesale credit rather than depositor funds). I understand that the same collateral can be used to secure multiple loans (like taking out several mortgages on the same house).

      In short, the pursuit of yield in a rate-repressed, under-regulated system has created a lethal risk. There may not be ‘too big to fail’ players – though I’m sceptical about this – but, unlike conventional banks, this sector could not be bailed out, and is hugely interconnected.

  21. Nate Hagens and Bill Rees

    This is a step back from whatever specific aspect of our dilemma you might be thinking about. Rees suggests that the basic problem is Overshoot. All the rest is a result of Overshoot. We are a K selected species which is too clever for our own good…and not wise enough to think systematically.

    Don Stewart

    Don Stewart

    • Hi Don,
      I can’t say I enjoyed watching that, but I was surprised at how much I agreed with every point Bill was making,
      he does seem increasingly gloomy, it has to be the understanding that we’ve run out of time and are now descending into the ‘Long Emergency’ to use Jim Kunstlers terminology,

      things are going to get very ugly and rather quickly, it’s only just starting but as the latin phrase says: Motus in fine velocior,

      Movement at the end is faster.

  22. Tim

    “Seriously, what you call “compartmentalization” is what I call specialisation.”

    The reason that it’s objectively compartmentalization is because your specialization (energy, economics, and finance) is collectively a *social* science. These areas of study don’t exist in a vacuum.

    According to your specialized view, Disaster Capitalism can’t even exist, because DC isn’t just taking advantage of natural disasters in the furtherance of neocolonialism – it’s fundamentally about exploiting the bust in the boom-bust economics fascist gameplay. Deflationary busts make more money faster than booms. The booms *serve* the busts. Everybody knows that, Tim. You know that, yet you choose to sanitize and in sanitizing there there goes the social in the social science, leaving nothing, because economics doesn’t actually exist in and of itself without the sociopolitical underpinnings.

    And this plays out in your conversations. Like with Mark regarding Truss. Truss was a blatantly obvious Fall Guy for a structural crisis that was coming to a head. And politically it allowed the liberal elites to cynically turn their noses up at the nerve of her classical trickle-down economics during such ‘uncertain times,’ while happily continuing on with their neoliberal plunder post-bailout.

    Capitalism is capital colluding, Tim. It’s a structural conspiracy because they publicly market it as meritocratic when you and me both know that it’s anything but, because of the non-meritocratic, ‘free energy’ of leveraging accumulated capital and the cronyism that arises within that dark, selfish milieu.

    • Easy dude. I get your frustration, when you’ve been studying something for 14 years and people still fail to see what you see it can be frustrating (and some people have been saying the stuff that you point out even longer). Dr. Morgan wouldn’t be teaching where he teaches if he were to speak actual truth to power. You can point out only approved “radical” ideas such as woke and things that further divide the populace and keep them at each others throats while you loot the country. More of us our on your line of thinking then you think.

      Isn’t it interesting that all of the largest dividers in society only have two outcomes?

      Climate change
      Gun control
      Democrat and Republican

      Good ole illusion of choice 😉

    • You make good points, but I always assumed Tim’s ‘softly, softly’ approach was to reach as many people as possible. By framing problems in this very dour, economics textbook way, it is probably easier to come to terms with our predicament for those who have been propagandised to think ‘Crazy nutter! every time someone posits collusion behind the scenes.

      Gail Tverberg does some good work on the same theme but her comments section is a conspiracy free for all. Not to say it isn’t good or useful (or that anyone is wrong or right), but I gather it turns a lot of people off who might otherwise be interested in energy and finance and how they relate.

    • Mr House

      I’m not frustrated. You telling me to go easy bears no relevance. Me, you, Tim – we’re all just vehicles for the truth and none of this is personal. The truth is the only thing that matters because the truth is how we honor our ancestors moving forward, and it’s what will see some of us through the bottleneck.

      Did you have a different handle at TAE when I was there as ben, which is my name IRL? I remember seeing your current handle there upon popping in quite sometime after Nicole left and the commentariat collapsed and only Ilargi’s mediocrity remained.

      Thanks PS. I don’t mind it if people can’t handle the thought of collusion, but I do have to speak up when people say collusion isn’t based in Reason, because then they’re crossing the line into an important falsehood, and unwitting people can get hurt by such lines being crossed by people they look up to. The excess deaths and debilitations from the genetic modifications are ample evidence of that.

    • Perhaps, but you might be fighting a losing battle anyway. It’s an important insight into propaganda that it actually doesn’t care what you think, it’s more concerned in what you do. You can hold extremely accurate opinions regarding the true nature of the system, but what do you do about it? Armed insurrection? Or do you disconnect completely anarcho prim style? Or just write about it?

      It therefore is less important to me what people think or what they perceive truth to be, rather it’s how they act. The world of facts doesn’t care about the reasons someone did something, merely that they did it. Your example regarding the gene therapy is a good example. People said no or yes for differing reasons, but do those reasons matter at all in the long run? Perhaps on a personal spiritual level, but on the level of historical fact not one bit, what if’s only exist in the mind.

      So in the end does it even matter if there is collusion or not? In my opinion only so much as it changes how one would act going forward.
      And for many out there, knowledge of conspiracy isn’t required for them to change their behaviour regarding declining living standards and energy availability.

      Nor was it needed to say no to the needle.

    • @ Reante

      For the second time, I must deviate from my normal etiquette of not openly criticizing the posting of forum contributors. In your case, it simply has to be done.

      As I said a few weeks ago, I struggle to make sense of your rambling and incoherent rants. Your postings are often obtuse and laden with riddles, as if you are hiding many things. You clearly have a track record, and it’s one that comes with a lot of baggage.
      It appears that you hop from forum to forum with the objective of subverting them to your views; always on the lookout for a new vehicle to use as an outlet for your agenda. You respect no-one that refuses to play your game, and throw your toys out of the pram when they say no.

      It worries me that you keep referring to National Socialism, which has some very unpleasant history.

      Whoever you really are and whatever you are up to, I think it’s time you moved on to your next forum to victimise. Better still why don’t you create your own blog so you can rant as much as you like without any restriction. I doubt that I would be alone in welcoming that day.

    • I think it’s time I said something about this discussion.

      Imagine somebody goes to an association football (soccer) stadium, like Anfield, and asks loudly why they’re not playing Rugby. It’s no problem at first, might even be amusing, but not if it carries on. That’s where I think we are. Soccer isn’t necessarily ‘better than’ Rugby, and our focus here on energy, the economy and finance isn’t necessarily better than broad philosophy, conspiracy theories and so on. But it’s what we do.

      Fans go to Anfield to watch football. If they want to watch Rugby, they go to Twickenham or wherever. People come here to read and talk about energy and the economy. It’s what it says on the tin. The guidelines here are courtesy, relevance and comparative brevity.

      Just like there is Twickenham rather than Anfield for those who like Rugby, there are plenty of other sites where other topics can be discussed.

    • I only began commenting in 2020 but have been reading it since 2008. The stupid was too thick for me not to say something. I tend not to say things and observe. On Nicole leaving and Raul being mediocre, i don’t agree with that take. She lost her mind essentially and swallowed TDS with no salt. Now she doesn’t write anywhere and i haven’t heard a thing from her since she lost it. Sad because she was a voice in the dark since 2008.

    • Thanks. I don’t comment on others’ blogs, and don’t really know enough about the people you mention to comment, even if that were my practice.

      All we can do here is apply logic and knowlege to energy, the economy and finance. These are widely – indeed arguably generally -not understood, and we will have added value to the extent that we accomplish this.

      For reasons that don’t matter, recent times have been a bit of a hard slog for me, and I’m trying to put this big, multi-article synopsis project together, so I’m grateful to anyone and everyone who keeps us on-topic and makes my life a little easier!

    • Apologies Dr. Morgan, that last comment wasn’t directed at you.

      One last point Dr. Morgan, remember when this was a conspiracy theory?


      Why do CIA and NSA have any information on any American citizens who have committed no crimes? And how did they get it without a FISA warrant? People have been saying this has been going on since i was a senior in high school and the patriot act was passed…. which had been written before the event happened that was used to justify its passage……… but you were called a conspiracy theorist. If the government does not expect bad things to be happening in the future and has no idea about our current predicament, then why do they feel the need to spy on people who haven’t committed crimes?

    • “So in the end does it even matter if there is collusion or not? In my opinion only so much as it changes how one would act going forward.”

      I think you hit on something important here. What are the financial markets other then information, right? It is supposed to provide us with information on which we make choices. If the information is manipulated or not true, people make poor choices based on it. When 2008 happened and i understood the current system as being bankrupt, i’ve made choices based on that, IE no debt, save as much as possible, try to insulate yourself from future shocks. The information i believe is different then the information the mainstream believes. I watched as the rest of society bought the narrative being offered by the authorities and loaded themselves up with debt. In my opinion they are being setup for a big fall, and the people providing them with fraudulent information (what else was 2008 other then an epic story of bankruptcy and fraud?) who are at the top of the pyramid should be the stewards of society and not trying to get rich by screwing everyone else. That is why i rail on about what some here consider “conspiracy theories”. I recognize that those who run things are predators and will eat you alive, i try to point this out to others while also saying the people at the top shouldn’t be predators but stewards. It does matter if it was collusion or not because we “pick” if you can even call it that anymore these days, our leaders based on their character. The media promotes a caricature of their character which isn’t true and they are misleading people to very tragic outcomes in my opinion. Dr. Morgan writes what he writes because he recognizes change is needed, but what change are you going to get if you don’t replace the management? We didn’t change the management after 2008, and what has changed? Based on my lived exp. not much except things keep getting work. That is really what i think most that we call conspiracy theorists are actually going on about, we need to change management. Does that make sense?

    • I think most of us can agree, without revisiting the reasons, that the economy has decelerated towards contraction over a lengthy period. I’ve called this “the precursor zone”. This is the result of material factors – FF depletion and the lack of a complete replacement.

      During that period, the authorities have tried various financial gimmicks, perhaps to buy time, perhaps because they actually believe the orthodox economics tarradiddle about the economy being entirely financial and not subject to material limits. This has created an absurd bubble in asset prices and a grotesquely over-extended network of liabilities that cannot conceivably be honoured. So yes, something worse than 2008 is coming. I think we can even see where, and how.

      Few would dispute a deterioration in the competence and integrity of government through this same period. Your term ‘management’ is critical here. Back when growth was continuing, government was a middle-level managerial job, and involved sharing out the benefits of growth between people and groups. If growth was happening anyway, no enormous levels of competence were required to manage the economy.

      The reversal of growth is a complete game-changer. Middle (muddle?) management is no longer enough. Political leadership didn’t cause the onset of involuntary de-growth (the causes being material), but is completely out of its depth, to the point where it cannot recognize what is happening, let alone manage it. Leadership is casting around, first for ‘fixes’ which don’t exist, and now for ways of staying in control. A lot of this is unpalatable, indeed irrational, and there’s no doubt about profiteering (which was also rife in two earlier periods of discconection, i.e. 1914-18 and 1939-45).

      Where I reject conspiracy theories is where it is alleged that, without them, the economy would be doing just fine. It wouldn’t. The causes of economic contraction are material.

    • “Where I reject conspiracy theories is where it is alleged that, without them, the economy would be doing just fine. It wouldn’t. The causes of economic contraction are material.”

      Agree 100%. But they can make the contraction 100% worse 😉

    • To my mind, Conspiracy Theories are just a modern manifestation of an old mindset.

      The same mindset that thought that for example, “witches” were responsible for bad events and should be burnt at the stake.

      Or that mercury was a cure for all manner of ailments (or injecting bleech!).

      Or people with leprosy were afflict because of sin.

      The human imagination knows no bounds and ignorance can be dangerous in the wrong hands!

    • Quite so. The situation now is without precedent in modern times. The economy is contracting. It’s visible almost everywhere you look, in which I include China. The public can’t deal with it, and neither can politicians or the administrative system.

      Over at Radix, Barry Cooper has written that “A shrinking economy, with no more growth, is unthinkable to most people whose jobs and prosperity have a vested interest in growth. No government would dare mention it publicly, or even talk about it behind the scenes, for fear of leakage into the public domain.” (my emphasis).

      We’d much rather blame ogres under the bed, or in the dark shadows of the room – or squeeze our eyes shut and hope that, when we wake up in the morning, it will all have been a bad dream, and “growth” is back.

    • @Dr Tim

      I’ve been reading a book on the history of disease.

      Prior to germ theory, people came up with all kinds of wierd and wonderful (and not so wonderful!) reasons, “cures” and “treatments” for their ailments.

      All doomed to fail due to a basic lack of knowledge/understanding (ignorance) of the real underlying causes of those diseases.

      The Black Death must have been a terrifying experience for those that lived (or died) through it

      We are about to enter a period of massive social change through de-growth brought about by reductions in surplus energy. Unless people are aware of the underlying causes, conspiracy theories will abound. I just hope that people don’t start making rash judgements based on their lack of understanding.

    • “The same mindset that thought that for example, “witches” were responsible for bad events and should be burnt at the stake.

      Or that mercury was a cure for all manner of ailments (or injecting bleech!).

      Or people with leprosy were afflict because of sin.

      The human imagination knows no bounds and ignorance can be dangerous in the wrong hands!”

      And who since 2020 has been showing all of those traits in spades? Those that said wait wait lets take a step back and not panic, or those that piled on the panic and then threatened people who didn’t do what those people told them?

      The other thing about most of what you point out, is that those “initiatives” usually started at the top and were carried along by useful idiots, just saying.

  23. Dr. Tim,

    In the article you shared..

    “Rather, the point is that we need to take this very seriously indeed, and that’s the intention here. The world is awash with “narratives”, and this combines with two factors – the rapidity of change, and the highly elevated levels of risk – to require a focus on what we can know, rather than on what we can only speculate about.”

    PumpkinScone shared..

    “People said no or yes for differing reasons, but do those reasons matter at all in the long run? Perhaps on a personal spiritual level, but on the level of historical fact not one bit, what if’s only exist in the mind.”

    In clarifying the purpose of this blog versus other forums you affirmed personal choice and responsibility. Thank you!

    In the case of shutting down the economy, “going direct” with finance, disrupting global supply chains, restricting freedom of movement and attempting to create a 2-tiered society based on medical choices in a heavily censored environment and the absence of actuarial input on energy and finance we have ample evidence in the public domain to support a respectful debate on this matter within the guidelines.

    There are two distinctions I would like to make about “choice” and “narratives.”

    Being offered a “choice” in the real world following the Covid protocols was often between compliance and nothing at all ie. no job, no access to daily life and dying relatives depending on your location. A matter of politics and government and deadly to personal health and economy. The only reason we have transparency on disease and intervention data is because of informed dissent. People who were affected are angry for good reason. I was lucky to be self-employed and living in a moderate state that narrowly defeated a referendum on emergency powers. I was stopped by State Police after county quarantine was loosened and asked about my travel plans. It was real for me.

    The difference between a winning “narrative” and the “other narrative” as we have seen is a matter of influence, money and control of information. The unherd article sharing a lively debate on scientific modeling, evidence-based medicine and reasonable measures in a civilized society between Bill Gates funded Imperial College Prof. Neil Ferguson and Sweden’s Tegnell was enlightening.


    Restraint of tongue and pen is crucial for adressing these serious issues that inpact our daily lives and likelihoods. Thanks for reading!

    • “I was stopped by State Police after county quarantine was loosened and asked about my travel plans. It was real for me. ”

      Papers Please!

      Excellent comment.

  24. PS

    Thanks, enjoyed that.

    You say that for many, conspiracy wasn’t needed to say no to the needle. I disagree. I doubt there’s a single person reading this who said no without a preexisting distrust of the institutions pushing it and the manner in which they pushed it, without a suspicion that lay beyond a mere lack of confidence in the institutional judgement. The only theoretical reason for saying no without distrust is on natural health grounds — if you’re an organic foodie or whatever — but all of those people (what I started out as) are already conspiracy theorists about the infamous collusion between the FDA and the finance capitalist food industry in the 1970s, right?

    Everybody outside of the mainstream is a conspiracy theorist. That’s obvious. You decouple from orthodoxy and you can’t help but see the machinations of orthodoxy. Tim obviously agrees that the upper echelons of the militaries and intelligence services of the world are well aware of peak oil and have been for a very long time. There’s no possibility that they couldn’t know if we know, because it’s their job to know whereas we’re just curious civilian noodling around in the peanut gallery. And documentary evidence is out there to confirm that. So Tim knows perfectly well that there’s a global conspiracy to keep peak oil non-public. This blog wouldn’t exist without him wanting to right that wrong.

    It’s 2023, an almost everybody is out of the closet now. Charles Eisenstein, who has a huge platform, was a beautiful example of a ‘softly softly’ kind of person courageously coming out in support of the truth about the harsh light of conspiracy, and after the social upheaval his platform is so much the better for it. He’s the perfect example of a genteel, cautious man choosing to operate on the benefit of the doubt saying ‘enough is enough, this is a bridge too far.” It was his highly ethical disposition what done it of course.

    • that there’s a global conspiracy to keep peak oil non-public

      Not at all. Resource depletion issues, including those related to fossil fuels, have been major public controversies since The Limits to Growth. These issues have made little penetration into public life because they were ignored, not because of a conspiracy of suppression.

      Two centuries of rapid economic growth have produced a “growth is natural” mindset everywhere. The Bill Rees – Nate Hagens conversation (linked to by Don Stewart above) has a great discussion of why our obvious predicament is ignored by just about everyone.

    • I think there was quite a large who said no without assuming conspiracy; those who have just realised that standards aren’t what they once were across all products, from cars to tech to medicine, and most modern things are crappy. Therefore it’s best to say no to anything so heavily marketed, as it’s usually a bad product. This requires a certain rejection of the civil religion of our times, that of progress and the unquestionable good of new tech. But I think it’s important to define what we mean by conspiracy, because a lot of it just seems to be marketing bad products/policies. If that’s conspiracy then every advertisement is a conspiracy.

      I think this attitude also comes from a position of far greater strength, because one is chuckling in a way at their incompetence and refusing to buy into their cruddy snake oil, rather than cowering inept before untrammelled conspiratorial power and expecting things to change.

      Now of course the needle was forced on a lot of people, and this affects the ability to say no. But a lot of lot products are forced on the public through subsidies and government policy (wind farms anyone?), just rarely medicine. The policy itself isn’t rare, just the field it was applied to and the degree to how awfully bad the product was.

      Roundup is another good example because not only is it a dangerous product, it’s a bad product, it’s doesn’t even work that well. Plants evolved around it in the blink of an eye. You don’t need conspiracy to point this out.

      I’ll restate too that I’m not disagreeing with anything you say, rather that I question if it’s the most productive paradigm to view things through, and this being the reason writers like Tim leave it out.

  25. I have to say i have been a little saddened by the comments section on the last few blogs. Dr Morgan’s blog has always been a beacon of sanity as we wrestle with our civilization’s reckoning with its energy limits.
    It’s a shame that it has become so combative and drifted off into conspiracy territory 😦

    • Great comment, one question though, why does it make you sad? Sanity is relative bro or broette 😉 Right? Just like everything else in our societies today!

  26. Dr. Tim,

    I’ve been following your blog religiously for a little over a year, but this is my first comment. Thank you for all you do in this little-researched but incredibly important area of energy, economics, and finance, and congratulations on passing the 80,000 visitors mark. My interest in this topic has led me to others who do similar work, and you by far have the most concise, clear, and data-backed take on the situation. In addition to the articles, what keeps me coming back to your site is the general high-quality and relevance/usefulness of posts from your commentariat. So, again, thank you, I know it’s not easy juggling a blog, doing serious research, and writing.

    I found your blog on the internet after reading some materials from PCI on Resilience.org regarding EROEI, Seneca cliffs, etc, and was curious if there were any academics doing serious research on the subject. I immediately found your blog after a few Google searches, as well as the work of Dr Dan O’Neill, Associate Professor in Ecological Economics at University of Leeds School of School of Earth and Environment (who others might find interesting… he has some wonderful video explainers on YouTube).

    I live in the US and work at a university, and have at various times presented academic leadership with long-range strategic forecasts and found your work valuable in this context. It seems to me that expensive graduate degrees (the cash cow for many US institutions over the last 5-10 years) are on the discretionary chopping block, particularly those purchased with student loans.

    Among my reading on this subject and adjacent areas, I include Nate Hagens, Rachel Donald’s Planet Critical podcast, Gail Tverberg’s Our Finite World, Alice Friedman / EnergySkeptic, Steve Keen, Tom Murphy (of Do the Math blog), Simon Michaux, and John Michael Greer. Huge thanks to Don Stewart and others of the commentariat for putting me on to more than a few of these through the comments here. I find each offers important perspectives on our metacrisis which many of us can synthesize into a coherent understanding of the future trajectory of our civilization. Like others here, I abandoned city life and recently moved to a farm, grow my own food, have set up various permaculture systems, retired large amounts of debt, and am generally focused on building resilience for my family while we still can.

    I think a conversation between you and Nate Hagens would be fascinating, and potentially very productive. While venturing into other topics, Nate speaks often of the energy-economic-financial situation in similarly concise terms.

    One thought on SEEDS and the issue of positive feedbacks: to what extent do the financial/monetary responses to the rising ECOE situation exacerbate the problem of rising ECOEs? For example, I understand fracking (tight shale oil) is really only profitable in the context of extremely low (or negative real) interest rates. As CBs raise rates, will we see an increase in the number of shale operations that go bankrupt, leading to an ultimate decrease in production, less overall FFs to go around, and a faster decline in prosperity? I focus on shale oil because I understand this FF source was really the only thing that allowed us to kick the can down the road after 2005-2008, but I suppose the interest rate-investment dynamic applies to all/most energy projects perhaps to a lesser extent. Does SEEDS incorporate these types of feedbacks, and if so would it suggest even more rapid deterioration of prosperity?

  27. @fidra

    I focus on shale oil because I understand this FF source was really the only thing that allowed us to kick the can down the road after 2005-2008, but I suppose the interest rate-investment dynamic applies to all/most energy projects perhaps to a lesser extent.
    I could be wrong, but my understanding is that shale oil falls into the category of ‘non-conventional’ oil, and has also passed its peak? I live in Australia which is a ‘small-bit’ player in the world economy, and already ‘regionalised’. as Gail T. talks about as part of the contraction causing deglobalisation. While Oz have identified potentially large reserves of shale oil, there appears to be next-to-no investment or plans to exploit it. Existing ones may be allowed to play out, but new ones? I’m doubtful.
    Most of the Oz fields are in hard-to-reach remote areas and/or Indigenous people’s lands. We also have large reserves of natural gas fields, but 80+ of current production is exported and not needed for domestic use.

    Australia appears to be going down the path of stage-managing its reduction of imports of both crude and refined petroleum derivatives to be conserved/rationed for use by ‘essential’ industries only, specifically diesel and jet fuel. Our import supply-chains are relatively short too, as it all comes from, or via, SE Asia. But our domestic supply-chains are long.

    So, Oz is reducing/rationing both supply, and mass consumer demand. I suspect things like personal/household cars will go the way of the dinosaur for all but the wealthiest classes who manage to hang on as they usually do. With both supply restrictions and the affordability compression (love that term!) on both supply and consumer costs of fuel for petrol engines, they will become an expensive luxury. What used to be a household ‘necessity’ for most, over the last few generations, will go back to being a ‘luxury’ item, because the cost of manufacturing EVs can never replace petrol engine vehicles on a one-to-one basis , although the ‘sunshine, lollipops & rainbows’ propaganda keeps telling us it will 🙂

    I saw in the last quarter’s manufacturing stats, new car manufacturing is reducing everywhere, Japan, Europe etc.

    Others that need to go or reduce subtantially, will be common household goods, Samsung is tanking now – how many will be able to afford fancy Smart TVs? Or even a fridge, or washer, with bells & whistles? Imported ones first. I suspect with affordability compression, there may also be some abandonment of artificial market expansion strategies like Planned Obsolescence , or even unplanned! As a personal example, when I had my house rooftop solar PV array installed with a 15-year warranty, I thought I would add a household battery too – but the commercial installers talked me out of it! Saying, they don’t last long enough – they lose efficiency, and you’ll be lucky to get 5 years out of the best quality (and most expensive) of them, because just like standard ‘old-school’ batteries in our vehicles – their recharge capacity diminishes over time and you have to replace it.

    There are some industries I would cheer to see going the way of the dinosaur – processed foodstuffs, & ‘fast-foods’ where the cardboard packaging is often more nutritious than the contents, cosmetics/’beauty’/fashion, household cleaning products, mass advertising etc — but all these industries employ people *somewhere* – and so even the middle-classes contract in population as more and more fall into the increasingly numerous poor. I guess the trick for governments is to try and manage it so that the reduction in overall living standards doesn’t happen too fast, to too many. Enough rising social anger already, without adding the middle classes too early.

    • @Entropy Juggler
      I know little more than what the web could tell you, except it is included in my own pension fund!
      Since I worked for govt for most of my working life
      my pension fund tends to weigh heavily in govt backed enterprises.

      Have no idea about its individual financial performance though, but did receive this in .pdf in my last quarterly retirement investment fund reports

      If it gets Oz govt carbon credits, it should be legit.
      Oz recently announced a mandatory CO2 emissions reduction of around 5% a year on each of the top 200 biggest emitters, improved efficiency, or production method changes, replacing old machinery etc etc but they can also use government regulated carbon credits to offset in hard-to-abate industries eg coal power stations by investing in companies like SLM.

    • @Rainsinger.

      Thanks for the reply, that’s interesting.

      They do provide this impact report on…

      Click to access SLM-Impact-Report-2021-WEB.pdf

      Personally, I care little for the legitimacy of carbon credits, invariably leading to punching ourselves in the face, yet again, into the gibberish realms of ‘offsetting’, etc etc…, what interests me is the attempt at the gordion knot of necessary provision, via biospherical repair, synthesised through the insane abstractions of finance. Of course this leaves it open to being usurped by ‘the markets’ once again, which’s already happening, however,…it proves we can have returns of landscape and hydrological processes returns from intentional human behaviour.

    • @Entropy juggler
      I agree with you re: carbon credits, for the most part – especially in the international context,
      but Australian govts get very regulatory on the domestic private financial and industrial sectors. Often criticised for being a “nanny state” stifling “individual freedoms” and “free trade”. Don’t like the rules? Bugger off and screw Kenya or Argentina or whoever, we don’t think globalisation did those other powerless countries much good at all.

      One of the reasons we had minimal disruption during the GFC, we had less than 1% sub-prime mortgages. Our banks have always been meanies, and we have a tiny NBFI sector, mostly in BNPL schemes, which just last month have finally been corralled under our famous “nanny state” federal laws to comply with the same regulations as all credit agencies. Always made my eyes pop in Hollywood movies, seeing how easy it was to get a credit card, or store card, with so little organisational credit checking. Just doesn’t happen that way here. And crypto was all but banned when it first arose.

      The news on TV just announced a recent report comparing OECD countries on income / wealth inequality. Talking heads burst out laughing when USA and UK were roughly equal in bottom place, and we were right up there with Sweden and co…one dude said ‘not that it’s hard to beat the USA/UK these days, on any metric 🙂

  28. Great essay as ever Tim.

    But the great lies continue – the virus lie (I know it’s a forbidden topic here) and the manmade climate change lie. Both depend on flawed models to benefit the overclass oligarchs.

    And now the Ukraine lie neatly summed up by the excellent Will Schryver on twitter

    “All US wars since 1991 have been predicated upon preserving the mother’s milk of American Empire: the “exorbitant privilege” of dollar hegemony; the ability to print “money” ex nihilo and “sterilize” it in external markets.

    The empire can only be defeated by rejecting its money”

    • Thanks Jonathan.

      You know my view which, in brief, is that orthodox economics is fallacious in its assumption that the economy is entirely a monetary system, and that the reality is that the economy can only be understood and projected effectively on the basis of energy. Energy-based economics also relates directly to our environmental and ecological challenges.

      There are a number of reasons why I try to maintain a focus on these topics. First, they are of undeniably huge importance. Second, they fall within my area of knowledge, which includes the proprietary SEEDS economic model. Third, they are relevant to the reader, whether he or she is an employee, a consumer, an investor or an entrepreneur.

      Quite apart from distracting from, diluting or blocking out these important topics, some other subjects are outside my area of competence. For instance, I’m not a life sciences expert, so I could only give a lay opinion on medical matters. I am in no position to assess, reply to or moderate comments outside my area of knowledge. Lay opinions don’t add value because they are simply speculation. I wouldn’t ask my garage mechanic for a medical opinion, or ask my GP how to fix my car.

      The fact of the matter is that there are numerous other sites where people can discuss covid, Ukraine or the likelihood of the Moon being made of green cheese. This site just doesn’t happen to be one of them – and neither my time nor my resources are infinite, which would make more sense if you could see the sheer volume of the stuff I have to read and manage even within my defined objectives.

    • Thanks for this comment Tim.
      I am a life-sciences major, and worked as an analyst in population health for decades. Including epidemiology in food animals, major food crop diseases, as well as in our human populations.
      I could write an undergraduate textbook on it.
      Tried to explain alternative interpretations on COVID or SARS 2 (and SARS 1, MERS and flu etc) when it first broke out, and again when the vaccines were first rolled out, but it’s like explaining calculus to a bunch of 4-yr olds with ADHD who just wanna trash the sandpit, and became far too exhausting so dropped out and left them to it. I even permanently “socially distanced” from a couple of longtime real-life friends because of it.

      But I am clueless on economics, and took me awhile to find my way here and other related webspaces, after wading through the mainstream “financial analyst’.

      I came to this and other similar blogs, because I am clueless and am in a time of life, where I want to LEARN about it because I do think it’s important.

      Which is a long way of saying I was very disappointed to see these things show up in the comments here

    • Thanks rainsinger, much appreciated!

      I once worked with one of the top analysts in pharma investment, and it was fascinating, but I learned just enough to know how much I didn’t actually know!

      My knowledge of war-related issues is confined to naval stuff. I’ve been in a submarine, and flown (in a chopper) on and off a carrier. Again, I know just enough about warfare more generally to know how much I don’t know!

      To paraphrase Abe, maybe ‘we can please all the people some of the time, and some of the people all of the time, but we can’t please all the people all the time’.

      Incidentally, I can recommend Bob Newhart’s “Abe Lincoln meets Madison Avenue” routine, if you can find it!

    • @rainsinger

      “Tried to explain alternative interpretations on COVID or SARS 2 (and SARS 1, MERS and flu etc) when it first broke out, and again when the vaccines were first rolled out, but it’s like explaining calculus to a bunch of 4-yr olds with ADHD who just wanna trash the sandpit, and became far too exhausting so dropped out and left them to it.”

      I’m intrigued. I couldn’t tell from your post? Which side of the vaccine debate do you fall?

  29. The UK government has just released a report called “Mission Zero”, which is a review of national progress towards Net Zero by 2050. The report was produced by Chris Skidmore who’s the former energy minister that signed us up to net Zero.

    I’ve included a link to the government’s press release page, from where you can download the full report if you wish. Anyone who decides to physically print it, will need to plant a small forest to offset the carbon emissions released in producing this 340 page doorstop.

    I will just quote one particular phrase from Mr Skidmark, which appears several times in the report: – “Net zero is the growth opportunity of the 21st century”

    So that’s it then. Green growth is not only possible, but it’s the answer to all of our ills. Just like snake oil was, once upon a time


    • daft ideas such as these, which is simply the WEF GND that has been adopted by nearly every Western political platform, are simply unstoppable, undebunkable, they have a momentum of their own and just grind on relentlessly no matter how much effort you put into pointing out their flaws and shortcomings,

      I rather thought rising interest rates would undermine their viability, they’re all about raising finance and spending it on projects that stand little hope of producing enough return to service the investment, let alone pay off the principle,

      I’m just waiting for GFC 2.0 to pull down the Potemkin facade of financialisation and reveal the emaciated and contracting real economy hidden behind,
      once the cheap credit is gone the magical thinking becomes impossible, only practical and viable schemes can be contemplated.

    • He’s probably a psychopath or extremely stupid.

      It’s difficult to tell sometimes with these degenerate politicians.

      But these policies are going to backfire in a huge way and leave all these brain-dead policy makers exposed for the frauds they are.

      When that happens they will all flee and hopefully the adults can then take over.

    • It’s always difficult to know whether people making such statements do or don’t know that it’s nonsense. In this case, I’d favour the latter, because the UK government and broader political and administrative systems are dysfunctional. It’s perhaps a situation where ‘you don’t have to be barking mad to work here, but it helps’.

    • @drtimmorgan
      [I]..difficult to know whether people do or don’t know that it’s nonsense..[/I]
      They don’t care. No consequences. A tick-the-box exercise for civil servants usually delegated to the youngest most junior civil servants with their new degrees to practice their “writing skills”.
      You can scan similar documents submitted by all 190 countries which are signatories to the 2015 Paris Agreement, to the UN IPCC, updated every year, as part of their commitment under the Paris Agreement.

      They all submit fairytales of gunadoos (as in gunna-do this, gunna-do that) whatever spin suits them on the day. No backlash, no risk of upsetting other Ministerial portfolios, no risk of upsetting factions of the “Great Unwashed”, (as one of my senior civil servant bosses called the voting public)

  30. Thanks Dr Tim for another great read. Have you any plans for a follow up on ‘Perfect Storm’ and ‘End game’ reference to the Uk situation?

    • Thanks Ken, and I’m glad you’ve asked. Forgive a rather roundabout answer!

      I have two plans right now. One is to write a comprehensive statement of where we are, summing up the state of knowledge and projection. Obviously that will take time. Second, I’m gradually making SEEDS data available for download, as the SEEDS model is complete and has proved very effective.

      From recollection, Perfect Storm, at least, was global rather than UK-specific, though I did publish reports which pulled no punches on the UK. I don’t want to seem ultra-pessimistic on Britain, but it’s hard to be anything else. The UK is in an almost heartbreakingly dire condition, and I keep waiting, in vain, for somebody to get a grip, put a stop to the self-damaging conduct of the economy, and start acting constructively. The extremity of risk and the rate of deterioration are disturbing, and the conduct of affairs is shockingly inept.

      So I might do something on the UK, but I would like it to contain at least something positive, if not outright optimistic, but that’s impossible under current circumstances. The economy is being driven straight at a brick wall.

  31. Anyone who’s recently been watching the excellent ITV drama “Stonehouse” about the disgraced MP from the 1970’s John Stonehouse, might well understand why British Politics is what it is.

    The worrying aspect is that the political breed of the 1970’s were probably a better bunch than today’s lot. In spite of the 1970’s oil shocks, governments of the day were fortunate in being blessed with a low ECOE environment, and a huge resource in the North Sea that was just opening up. How on earth Britain managed to squander that wealth is beyond most of us.

  32. According to today’s Guardian Janet Yellen has stated that by January 19th
    USA debt ceiling will be reached . Is this the cliff edge.?
    She also appears to believe that “ extraordinary powers” will provide a lifeboat.

    • Well, I’ve lost count of the number of times that the debt ceiling has been hit, sometimes there is brief interruption of government services, but the limit always gets raised pretty rapidly.

    • Borrowing more works until it doesn’t, as they say.
      The financial system still sort of looks like what it did in the past, but it made a transition from being involved in wealth-production under industrial capitalism, to a destructive metabolism, whereby “value” is detected in a productive enterprise, it is “bought out” with conjured debt-money at low interest, and it is parted out for sale, with the original debt-money coming back as a solvent used in the process of wealth-extraction. This increases the “solvent” supply, which goes on the extract ore value from other productive systems.
      Global financial capitalism is not an “anabolic” or building system, but a “catabolic” consuming system.
      The US Fed. is a source of the solvent, and receives much of the solvent back in this system, but if another currency is used, one which is not primarily a solvent, as the BRICS+ currency is envisioned to be, then the US system, accustomed to being fed by wealth from the rest of the world, will have to default and re-set.
      The catabolism is its own form of death. Debt-based money, expanding exponentially, while real economy expands linearly over the long term, irregularly, with jerks, and is now into long-term contraction, will consume all economy rapidly, if not replaced with a monetary representation of real economy, which actually represents it reasonably well.
      Money is information. Money currently, is lies.

    • Very well put, John. Let me pick up on the part of your comment which resonated most with me:

      “Debt-based money, expanding exponentially, while real economy expands linearly over the long term, irregularly, with jerks, and is now into long-term contraction, will consume all economy rapidly, if not replaced with a monetary representation of real economy, which actually represents it reasonably well.”

      I have long emphasised the need to draw a distinction between the ‘real’ economy’ of products and services and the ‘financial’ economy of money and credit. Even based on official data, debt has been growing at 3X the rate of growth in GDP.

      But this data – generally accessible, but not often remarked upon – understates the situation in two ways. First, credit expansion creates an illusion of growth in output. Second, debt is by no means an all-encompassing measurement of liability creation. SEEDS endeavours to identify underlying or ‘clean’ output and growth by stripping out the ‘credit effect’, whilst I often draw readers’ attention to broader liabilities which, as well as not being regulated, aren’t even quantified in full.

      I intend, in the near future, to discuss here the scale and risk-relationships of liability exposure, but the data, such as it is, gives two particular causes for concern. One is that bank liabilities seem far larger than the conventional definition of debt owed to them. Second, and still more seriously, the NBFI sector (“shadow banking”) is gigantic, and very largely unregulated. We caught a small preview of this with the pension risk that emerged immediately after Britain’s chaotic ‘mini-budget’ in September.

      Just to add, for anyone wanting to ‘cut to the chase’, yes, this does mean that the system implodes, with fractures coming from directions which will have been very largely unexpected.

    • Much appreciated. Derivatives, pensions, veteran’s benefits, infrastructure upkeep, retiring nuclear reactors…
      So many future liabilities.

    • This time may be different. The Republican fringe which stalled the election of a Speaker in the House will strongly object to a continuation of business as usual. There were near fist-fights on the floor of the House. If some renegade Republicans join the unanimous Democrats and raise the debt ceiling, then what will happen?

      It may look like some of the videos out of Ukraine.

      Don Stewart

  33. I found this interesting. Briefly, Rons prediction is that the debt ceiling is the catalyst for a substantial sell of close to the pre covid high starting late next week…
    Followed by the ‘fed pivot’ short squeeze and rally followed by a big 2008 style crash…
    So far he has been pretty much on the money…when you see companies like Ford and Target making huge head and shoulders topping patterns..something has to give?

  34. @Dr Tim.

    Following on from some posts further back, if oil extraction gets to the point where the likes of BP or Shell can no longer make a profit, do you see that governments will have to step in and extract what they can on a “no for profit” basis (or even at an economic loss as it is too critical a resource)

    The oil will still be critical to the running (or running down) of the economy/society.

    Alternatively, government could subsidise the oil companies, so that the dividends/profit can continue to be paid to shareholders. But this is not sustainable politically or economically (print the money to create the funds for the government handout), long term.

    As long as the ECoE doesn’t reach zero, extraction will be needed to prevent us completely dropping off an energy cliff.

    • The pricing of energy is unlike the pricing of anything else. Normally, prices have to reconcile (arbitrage) the costs of the supplier and the affordability of the consumer. Where energy is different is that the consumer has no affordability at all without energy.

      We could state that, in principle, energy subsidizes (makes possible) the rest of the economy. Pricing is easily established when costs are low, as there’s plenty of value (utility minus cost) to be shared between supplier and consumer. As costs rise, it can become impossible to strike prices which meet the needs of both.

      Under no circumstances can the economy afford not to have energy. If maintaining supply means government stepping in – either through ownership or through subsidy to private suppliers – then that would have to happen.

    • @Dr Tim

      “Under no circumstances can the economy afford not to have energy. If maintaining supply means government stepping in – either through ownership or through subsidy to private suppliers – then that would have to happen.”

      So, do you see it’s as inevitable that government will have to step in?

    • we got a sneak preview with he lockdowns and cessation of commercial aviation in 2020,
      the late spring and summer had remarkably clear blue skies, it takes about 6 weeks for aerosols to rain out of the atmosphere once you stop releasing them,
      then the late summer and early autumn were obnoxiously and scarily hot,
      I was observing and anticipating much of this at the time because the science of ‘global dimming’ has been known since the 1950’s,


      none of this is new, but people tend to brush aside awkward and challenging knowledge,
      we really have made a mess of things, haven’t we!

  35. Hydrogen?
    Sabine Hossenfelder brings us up to date, bridging off the recent UK conclusion that hydrogen is not likely a solution to our problems.

    Don Stewart

    • Hello Ivan, and thank you.

      My feeling was that “The Challenge” was probably in need of updating to incorporate our current state ok knowledge. I needed to free up a tab for the new “Data” page to keep the menu on a single line.

      I’ll see what I can do about that – that is, I’ll see if I can bring it back, and look to update it if I can.

      Update – “The Challenge” is back.

  36. Nothing will ‘save’ us, certainly not Hydrogen, nor wind, solar, nuclear or geothermal or any other. I say this with a very good reason, being all the EROEI calculations done on all of these electricity generators are wrong, because they leave out the largest energy input to their costs, being the background system energy cost.

    Even the numbers for fossil fuels are not accurate with the often quoted 100/1 for past fuels only true on very few occasions. For example a large gas field of high quality methane of 500Bcf might have a 100/1 EROEI if we connected one well to existing nearby pipes into the ‘system’. Yet when we add more wells at an energy cost, plus a LNG plant to export the gas, we have spent a lot more energy building all the infrastructure, with non more gas than the 500bcf, so we lower the overall EROEI to less than 10/1, yet it’s the same gas field that had over 100/1 EROEI with just the one well and connection. At best the numbers for fossil fuels are very rubbery on an EROEI basis, which makes the comparisons difficult..

    Can anyone imagine building a nuclear power plant without any engineers involved in the design, or perhaps without any competent concreters in the construction? I can’t, but none of the calculations in any EROEI document count the background education and expertise as an energy cost in the construction.

    If I dump 60,000 tonnes of steel and 150,000 tonnes of concrete and the correct amount of copper, nuclear fuel, nuts ,bolts, flanges and everything else needed in the production of a nuclear power plant on the front lawn of the local government, could they construct a NPP out of it without expending extra energy? Of course not. Everything needs to be the correct shape and placed together in the correct order to build a NPP, yet no-one wants to include the expertise in doing so as part of the energy invested.

    The single best indication of the total energy invested is the capital cost, including the cost of money, with money being a token of energy. The hard part is working out how much energy costs throughout the system, yet we have some very good clues, like from this paper…

    Click to access an_exploration_of_energy_cost_ranges_limits_and_adjustment_process_2_0.pdf

    Likewise with operating costs, there is a vast difference in the energy cost of operation of something like the Vogtle NPP with 800 permanent workers (more during major maintenance), plus all those involved in Uranium mining and enrichment, than the zero net new workers if the Saudi’s drilled 3 new 5,000bbls/day wells into existing fields and connected them to existing pipelines as has happened for decades. Both produce about the same energy per annum of around 9.3M Mwhs of ‘energy’, with the oil being more useful than just electricity. (neither could be built without oil, nor their replacements).

    With the world using a very rough 8% of GDP on primary energy over the last 50 years, it becomes obvious that oil and coal have not provided 100/1 returns, or the expense of GDP on primary energy would be 1%, not the average of 8% +_ 2% for stable economies, with a variation between 5.5% and 11% according to the IEA..

    Using 8% of GDP as the basis for primary energy spend, then it becomes relatively easy to compare different types of energy, without using the numbers as gospel because of the wide variations between countries and areas within countries.
    Fossil fuels have an EROEI (including O&M costs) of 10/1-20/1 as expected in most areas, while all the man made electricity generators, solar, wind, geothermal, nuclear come in at 1/1 or less. The absolute numbers themselves are meaningless, but the trend of ‘classic’ fossil fuel sources is an order of magnitude different (better) compared to the ‘man made’ stuff.

    We don’t make nuclear power plants, nor solar nor wind infrastructure from man made electricity sources, because it’s too expensive to do so. All the talk of solar and wind being the cheapest source of electricity is only true with a very limited range of rules designed to favour these renewables.
    No-one anywhere is planning or building the total mining, transport and manufacture of nuclear, solar or wind from entirely renewable sources, simply because it’s way too expensive to do so, meaning the EROEI of doing so would be more highly negative than building these things from fossil fuels.

    Even modern fossil fuels like fracking have much lower EROEI than the traditional vertical wells into oil fields, so despite the overall production numbers going up (until 2018) for oil production, the underlying reduction of net energy for civilization is showing up as an exponential decrease. Slow at first but picking up the pace if the world was to return to ‘normal’ conditions of trade. The pandemic and Ukraine way are hiding the underlying effect overall..

    Sorry for the long post Dr Tim, but there is so much to discuss about the EROEI that usually remains hidden from view and certainly the energy costs remain hidden from those advocating any type of future that begins with … We must build more of….., None of those people understand the underlying real energy problem.

    The reality of degrowth is that we will build less of…. if we try to maintain existing living standards, let alone try to improve lives in the developing world..

    • Good points, hence why I try to use Odum’s eMergy scheme rather than basic EROI. It attempts to take into account things like engineer education, but also the free services of nature. For example, with fossil fuels, the energy provided by the earth in concentrating them for free over millions of years is far greater under eMergy analysis than the solar energy that first created them.

      I know some don’t like it as too arbitrary, but I find it gives a picture that better reflects how things work outside paper calculations.

    • @hideaway


      The true “costs” of energy are probably too complex to calculate. But those costs do exist, even if people choose to ignore them.

    • Hideaway,

      You touch on a crucial point when it comes to energy system calculations, and in particular when comparing different technologies.

      The key issue being “where do you draw the system boundary”? There’s no consistency on this requirement, and in my opinion that’s a sad failure on behalf of the international scientific community.

    • I agree with you that the dollar cost of an energy source is often more accurate than trying to draw consistent borders for comparative EROI calculations.

      But that method comes with a giant flaw – external costs not charged to the source, as in CO2 emission costs (climate deterioration) not charged to fossil fuels.

      Another externality example is that usually the costs of intermittency are not charged to renewables because grid stability is “paid for” by other generation’s capacity to stabilize the grid.

      Yet people who grumble about the fact that renewables are intermittent don’t seem to be bothered by the fact that fossil fuel users aren’t required to capture and sequester the CO2 emitted.

      I will also point out that even though you say “the single best indication of the total energy invested is the capital cost”, with which I agree, you dismiss renewables because they are built using some oil powered equipment, rather than based their levelized cost of electricity (the combination of capital cost and O&M).

      A grid-tied energy system provides two “goods”, energy and capacity, both of which are essential because of the way we organize our economies, and energy systems also produce numerous “bads”, mostly in the form of environmental degradation. All of these benefits and costs should be included when comparing different energy systems.

      I’d wager that if all costs were included, calculations would show that humanity should have stayed with wood, wind and water power (all forms of solar energy) and never used fossil fuels at all (not even for modern renewables creation).

  37. ‘Shadow Banking’ under pressure, Dr Tim. From the Guardian’s business news:

    “Amigo Holdings has been in a rolling state of crisis since 2019 when regulators promised to crack down on unaffordable lending. The lender has now said it has been unable to find a big investor willing to back it.

    Shares have plunged by 20% on Monday after the warning. Amigo said it would have to wind down the business if it could not find an investor by 26 May. Possible investors are wary because of the cost of living crisis.

    Amigo specialises in guarantor loans – where a family member or friend is on the hook if the borrower defaults. The loans, which are aimed at “sub-prime” people who would probably not be able to borrow otherwise, often have very high interest rates.

    On Monday it said:

    To date it has been unable to secure a commitment from a cornerstone investor to underwrite the whole of the capital raise. A number of investors have expressed possible interest in making a minority investment. Amigo is therefore assessing whether there is sufficient interest for a syndicate of such investors to be formed in order to support a £45m capital raise.

    Amigo has been running a pilot scheme since October which has allowed it to lend again under close scrutiny from the Financial Conduct Authority, the City regulator. The cost of living crisis has made that more difficult because it has made loans less affordable, the company said.

    Danny Malone, Amigo’s chief executive, said it was “disappointing that we have so far been unable to identify the requisite equity backers for the business”.

    We realise that the economic backdrop since we announced the scheme has changed substantially. This has made the process of raising equity capital to support the scheme conditions significantly more challenging than expected.”

    I’m quite sure that Amigo has friend in the sector!

    • I can’t comment on individual companies, but, as a possibly related issue, we really need to be aware of non-bank lending. It’s by far the likeliest direction from which a crash will come.

      In recent days, we’ve heard that the UK economy isn’t doing quite as badly as previously thought, mainly because retail sales held up reasonably well over Christmas, and holiday bookings are solid. We haven’t seen borrowing numbers, but that’s what this ‘improved’ news is all about. We have seen reports of the worsening indebtedness of households, but not about borrowing at the aggregate level.

      Where, though, does this borrowing come from? Not, as people might assume, mainly from banks. Fixed rate mortgages aren’t retained by lenders, but sold to investors as MBSs. My understanding is that many forms of consumer credit – including BNPL – aren’t funded mainly by the banks either.

      Re. the NBFI sector (worldwide), the following points are worth noting. First, NBFIs are not regulated. Second, we don’t even have complete global data. Third, a lot of this activity is overnight money. Fourth, there seem to be no limits on how often the same collateral can be used (like taking out multiple mortgages on a single property). How risky is all this?

      I do my best to get at the numbers. These are huge. So far as I can see, NBFI assets – sums owed to them by borrowers – substantially exceed the global total of government plus conventional private sector debt.

      This is a crisis in the making. Leaving aside places like Luxembourg the Caymans, the most exposed countries are Ireland, Britain and Holland. British exposure is falling, as the financial sector contracts post GFC and Brexit, but it’s still severe.

      This said, it’s the opacity and global interconnectedness of this stuff that should worry us most.

      Memo: NBFI = non-bank financial intermediaries, a.k.a. “shadow banking”

    • @timmorgan
      Please forgive me, if this is a ‘dumb’ question, but why aren’t (some, all?) NBFIs under at least some minimal business regulation, such as business registration, annual disclosures etc ?

      I remember Australia’s CB announced before Xmas, that BNPL companies are being bought under regulatory control this month to be classed as ‘credit agencies’ (as other NBFIs were forced to in the early ’00s I think). I think our legislation gives the CB something like ‘reserve powers’ to intervene if such agencies are determined to be fraudulent, or destabilising the financial system etc.

    • Please see my answer to Neill. These NBFIs are no doubt subject to local laws, but this is about legality, not macroprudential stability. If an NBFI complies with local laws, that doesn’t affect how much the borrow or lend, to whom, over what periods, and with what collateral. Laws mostly guard against fraud, etc, not recklessness or excess risk.

    • I should have linked a BBC article from last week as it claimed many people in the UK have taken equity release.

      That’s probably contributed to these Christmas sales even if we consider the news as truthful.

      I am sceptical there was even 0.1 growth.

      Equity release is insanity and more debt that needs to be repaid.

      UK is becoming a caricature. Just when you think the country can’t get more in debt they pull another rabbit out of the hat.

      It’s a comedy and tragedy of Shakespearean proportions.

    • GDP is an extremely misleading measure. If a government, the UK in this case, borrowed £200bn and sent this to households, GDP would rise as this money was spent, but this apparent “growth” would be entirely cosmetic. This is why I calculate and use underlying or ‘clean’ economic output, C-GDP.

      What seems to be happening in Britain is that many people are using any/all forms of credit rather than cut back on things that they deem essential – Christmas spending, holidays and so on. These two items alone give an apparent (but credit-funded) boost at the turn of the year. At the same time we keep hearing more reporting of household debt problems.

      The interesting thing, I think, is where this credit is coming from. Not, I think, from banks, which are not given to lending to borrowers who are unlikely to be able to pay it back. This points towards non-bank financial intermediaries.

      If I wasn’t so busy with my long synopsis of the surplus energy economy, I’d be writing up the overlapping debt/NBFI subject now. That people can continue with/increase borrowing even as their circumstances deteriorate is a major glitch in the system.

    • @drtimmorgan
      Australia also had a rally of post-xmas retail sales spending, as our biggest annual sales run for 2 weeks starting on Boxing Day, which coincides with mid-fiscal year for businesses, and the beginning of the long summer holiday break. But drilling down on the types of goods being bought, it wasn’t the usual suspects of luxury goods, clothing, shoes, electronic devices, TVs, game consoles etc.

      The notable increase was in household goods, appliances like fridges, washers, microwaves etc. Several interviewees on the streets were saying it was their last hurrah before tightening the belt in time for the new school/work year (in Feb).

    • In addition to poor quality but “honest” shadow banking institutions, there’s the corrupt ones operating outside the realm of financial regulation.

      I’m unsure if any of these have the potential to bring the house down, but some of them have been carrying out financial fraud on an industrial scale. The FTX crypto implosion certainly made a few waves, but contagion seemed to be contained. Unless it’s still in the process of unwinding?

      I watched an interesting documentary last week about the Abraaj Group, whose founder rubbed shoulders with Presidents, and duped nation states to line his pockets. The programme is still available on the BBC iplayer link below.


      As the saying goes “caveat emptor”.

    • Regulation applies to banks, which are “deposit-taking institutions”, i.e. retail banks. These regulations are designed to protect the public, i.e. those who have money in banks.

      There’s no equivalent for institutions which lend but don’t take deposits. This is a huge gap in macroprudential oversight. The Financial Stability Board monitors this, and gives advice, and tries to promote best practice, but the FSB is not a regulatory authority, and can’t compel jurisdictions to supply information, which is why its data does not cover the entirety of the system globally.

    • The UK, and households in particular, are getting into a dangerous (well, even more dangerous) situation with borrowing. It used to surprise me that lenders would give credit to borrowers who were clearly in a stressed financial condition, something which banks are unlikely to do, but the involvement of non-bank lenders makes this more understandable – it’s a sort of agency lending.

    • That is a good thing!!!
      We are deep into ecological overshoot and the only way out is substantially reduced total consumption. A shrinking population makes that much easier.

      Now sure, a shrinking population creates economic and political problems, but far less serious problems than a growing population.

    • The United States relies enormously on the petro-prop – because oil is priced in dollars, anyone wanting to buy oil must first purchase dollars. This creates huge demand for USD.

      Governments and leaders have, in the past, proposed pricing oil in currencies other than USD.

      The last serious such proposal that I can recall was made by a Mr S Hussein of Baghdad.

    • And Mr Gaddafi of Libya who wanted an African gold Dina.

      He did not end well for both.

    • ha you do realize if you made this argument with “polite” company they’d probably call you a conspiracy theorist. Say around the time of the Iraq war in the early 2000’s.

    • At the time, and since, it has never seemed clear why the US invaded Iraq. It was highly unlikely that Saddam backed terrorists, and equally unlikely that Iraq had WMDs. I never bought the idea that it was a grab for Iraq’s oil fields, or that GWB was finishing off a job left incomplete by GHWB. So the petro-prop thesis is reasonable speculation. That’s all it is.

      I can remember being opposed to the war at the time, simply on the grounds that no adequate case for it had been made.

    • @Mr House

      It’s the difference between speculation and fact.

      Conspiracy Theorists dress speculation up as fact.

    • Is it clear why we took the actions in 2008 that we did? Or is that only speculation? Is it clear why we took the actions we did in 2020?

    • @Mr House

      “Is it clear why we took the actions in 2008 that we did? Or is that only speculation? Is it clear why we took the actions we did in 2020?”

      As I was not privey to the conversations of those who where making the decisions, then no. It’s not clear.

      The fact that there are conflicting narratives suggests that things aren’t clear. Plenty of room for speculation though.

    • @Mr House.

      I can speculate/open to the idea that the C.I.A are up to all sorts of “dirty tricks” both in the US and abroad. Much the same as MI5 here in the UK.

      For example, I can see how MI5 would have infiltrated the trade union movement in the 1970s, if “The Establishment” saw trade unions as a threat to the status quo. But I have no evidence and it is just speculation.

      I’m with Chomsky on conspiracy theories. Deal with what is known. The rest is just chatter.

      If the C.I.A or MI5 are doing their jobs properly, us plebs won’t know what they have been up to.

      Subdifuse and spreading false naratives are possibly all party of the game.

      All those “interlectuals” name in the article, as being on the pay roll of the C.I.A could all be name (by the C.I.A) as a way of discrediting them.

      It’s a whole can of worms and the likes of me will never be privey to the truth/facts. That’s why I don’t waste too much time going down each and every rabbit hole.

    • Haha you caught me John, i let it slip i’m one of them 😉


      Get rid of the agencies, FBI, CIA, NSA, ATF, get rid of all of them. They’ve only existed for a bit over 100 years. As Dr. Morgan states, we need to downsize. Know what the quickest and most effective way to do that will be? Give up the empire, its that simple. Its like being at a party and one person holding everyone else hostage when they want to go home, but that one guy/girl won’t admit the party is over. The largest consumer of oil in the world is……… the US military!

      Cut it down to size where it only defends North America and i bet they’ll use a lot less. Everything we suffer, from the refusal to discuss this like adults to the worsening standard of living is due to some people not being able to acknowledge its over. Honestly, only themselves, the .01 of the population and there servants, those in the upper 10% are benefiting from this arrangement anymore. Either they act like men, admit they’ve failed and we move on trying to salvage what we can or these psychos are going to get a lot of people killed in vain.

    • @Mr House

      The likes of the C.I.A and MI5 might be a little over 100 years old, but Kings before, had their spies and informants. Before the NKVD, the Tsar had his secret police to keep the Russian empire together. It’s nothing new, just more sophisticated as the world has become more complex.

      The ugly truth is that without them, we lucky citizens in the West, wouldn’t have enjoyed the lifestyles we have had. Securing the world’s resources in a post-empire world has been vital to our prosperity.
      The C.I.A/MI6 backed Iranian coup in 1953 is a prime example. Securing all that oil help Britain build the N.H.S. (After all, BP was originally Anglo-Persian.)
      It’s an uncomfortable truth.

      But as you say, this is all about to change. Careful what you wish for though.

  38. Petrodollar
    First, take a look at Wolf’s analysis of rising interest rates as pertains to the US government deficit:

    Tentative conclusion: the government will keep on doing what it is doing because it benefits by stealing money from the public in the short term and can always print more in the long term. Inflation is the public’s enemy, but the government’s friend.

    Second, consider how that might change if the petro dollar goes away. Read Wolf’s analysis of how the British situation is different than the American situation. Will the US begin to look like Britain? E.g., money printing is no longer a viable solution.

    Third, try to identify any “old time Republicans” in Congress. E.g., “a billion here and a billion there and pretty soon you are talking about real money.”

    Fourth, try to identify “war hawks” in Congress. Better yet, try to identify a handful of Congress-people who DON’T think that war is the answer.

    Don Stewart

    • Yes, interesting.

      As you may know, SEEDS calculates underlying or ‘clean’ economic output as C-GDP. That calculation usually starts in 2000. Before that, data for some individual economies is incomplete.

      But recently I started the clock on global C-GDP in 1980, and then expressed this as dollars per tonne of energy consumed. The result was remarkably consistent, not varying by more than 4% either side of the average in any one of 42 years. I certainly hadn’t expected this outcome, but it seems extremely important.

    • so C-GDP and total primary energy input correlate to within 4% over 42 years,

      in Perfect Storm, P78 there are two graphics, 5.14 & 5.15,

      Click to access tpsi_009_perfect_storm_0093.pdf

      for me these graphics illustrate our predicament very clearly,

      if total primary energy = C-GDP,
      then does the prevailing ECoE define how much of the entire economy is devoted to energy production?

      10% ECoE would equal 10% of economic activity being related to the energy production and generation sector?

    • Yes. I used SEEDS to calculate global C-GDP for the period 1980-2021 inclusive, and divided this by energy consumed in each year. In no single year was the number more than 4% above or below the 42-year average.

      C-GDP is a measure of economic output – equivalent to a household’s income before costs are deducted to leave disposable income. At the macro level, the deduction is ECoE – so prosperity is C-GDP minus ECoE.

  39. Quick Joke
    “Why did the climate scientist cross the road?

    To get to the other side of the paradox, where reducing pollution could actually make things worse.”

    The joke is courtesy of Albert Bates on twitter. The point is that if we eliminate all the pollution, the temperature rises very quickly, and by substantial amounts, because of the reduction in aerosols. An ex-college professor who popularized this notion about 10 years ago has been hounded to the edge of insanity (IMHO). Now James Hansen and company have published on it. Cynics may note that Hansen is now free of government censorship.

    The parallels with fossil fuel use and the economy are striking, I think. We can’t live in the economic system we have constructed with declining fossil fuels, but we also can’t live in the natural world if we continue to burn them at the rate we are now burning them.

    I’m pretty sure that our political system can’t survive these paradoxes. So, like the hapless climate scientist chicken, we will start across the freeway, still encumbered by lumbering heavy trucks and the occasional tank or missile carrier. The current trend seems to be toward right wing, in hopes that reducing private freedom can somehow fix the problems. I would only note that when Hitler went to Rome to ride in the parade with Mussolini, things got a lot worse.

    Don Stewart

  40. Refinery Gain

    Refinery gain accounted for more than 1 mmb/d of U.S. oil production in 2022.

    Gain occurs during refining because petroleum products coming out of a refinery are less dense than the crude oil going in. The volume of refined products is therefore greater than the volume of crude oil intakes. That volume difference is called refinery gain.

    For example, the average density of crude oil is 846 kg/m3 (Figure 4). Gasoline accounts for about 45% of each barrel of refined U.S. crude oil and its density is 744 kg/m3. That means that approximately 1.14 barrels of gasoline are produced from each barrel of oil. That is refinery gain.


    • very excellent article, should have been a bit longer.

      “Refinery gain accounted for more than 1 mmb/d of U.S. oil production in 2022.”

      he left out US imports of about 6 mbpd which means that about 18 mbpd went through refineries and so the “gains” are about 5%, not huge but significant.

      also by omitting US imports, there is no discussion about the very significant fact that Canada has very fortunately been endowed with very abundant heavy oil, which is perfect for blending with the oil from the US where there is a concern that US oil production is trending to a lighter average grade of oil.

      so that was a serious omission by him. US plus Canada is a perfect match, and if Canadian production ever falls faster than US production, the US always has Venezuela not too far away.

    • he also glosses over Natural Gas Plant Liquids, NGPL or otherwise NGL.

      sure it’s not crude + condensate, but the obvious reason why the US is using 6 mbpd! of them is because they are quite valuable, especially ethane and propane.

      not showing methane CH4, but his chart even shows which are which C2H6 C3H8 C4H10 etc.

      hydrocarbons have been very very good to me.

      and he noted that world crude + condensate has fallen from about 84 mbpd to about 80 from 2018 thru 2022, so an annual decline of roughly 1%.

      not bad!

      2023, well, que sera sera.

  41. Red,
    Rather strange you mention this ‘gain’, which was covered in detail by Nate Hagens and Arthur Berman on the 18th of January in his latest podcast – this was a most interesting discussion and highly recommended for posters/visitors:https://youtu.be/CDBJdQnjE2o

    • That is a very telling discussion between Hagens and Berman.
      I suggest that if the World Liquids Production chart were shown in BTU’s (energy content) rather than Barrels, it would already show that we are on the downward slope of peak oil.
      The quality and BTU content of petroleum liquids recovered over the bast few decades is a mix (crude and crude-condensates), with less energy content per barrel compared to that of oil recovered in previous decades.
      Perhaps the ECoE for Crude is also worse than expected based on this discussion, being that the energy used is now bringing up approximately 20% less crude than thought according to Berman. (80% crude 20% other liquids)
      If correct, this is an alarming report.

    • @Christopher Rogers.
      In brief, it sounds like the take-away is that entropic losses aren’t factored in energy terms, or financially extension.

    • as I said above, this makes me question why he didn’t mention the awesome serendipity of the fact that Canada produces large amounts of HEAVY oil.

      perhaps this is discussed in the video which I didn’t watch.

      yes he is correct that US oil is averaging a lighter grade, but that is no big deal when there is so much heavy oil just north of the border.

      it’s win/win for the USA and Canada.

      otherwise, c + c is declining at about a 1% annual rate, so he could be thanked for reporting how good the world production continues to be.

    • In surplus energy terms, I imagine extracting tar sands crude, shipping it from Fort Mac, AB 3,860 km to Houston TX, mostly by train or truck because no Keystone XL, and there refining and blending it with shale oil, has very high ECOEs.

    • yes I’m sure you’re correct.

      his Figure 2 shows US conventional oil consistently holding at about 5 mbpd for the past 12+ years, and this helps to mitigate the higher ECoE of the heavy Canadian oil, even though conventional oil now has its own higher ECoE also.

      he takes the time to show that LTO light tight oil has 4 to 7 % less energy content than “average oil”, and I would state that as “only” 4 to 7 % less, sounds pretty good to me in this decade of higher ECoE.

      so higher ECoE is probably present everywhere there is FF extraction.

      the beauty of the US/Canada match is that though each has higher ECoE oil production, they combine to give US refineries the blend they need to run their operations, and to produce more diesel especially.

      to me, it’s a very encouraging article, IF it is understood that our northern neighbor shouldn’t be ignored since it gives US refineries just what they need in this time of average lighter grade US production.

      the party is not over.

  42. This is not a conspiracy theory, just doing what has to be done
    Berman makes the point that the US is exporting quite a lot of low energy density oil products and gas products, but is importing the diesel quality products from around the world. Now the BRICS are talking about refusing to take US dollars for some essentials such as diesel quality oil and essential minerals. As Dr. Morgan observed, the leaders of countries who tried such moves in the past ended up dead.

    So one of the leaders of the current movement needs to die as a lesson to the others. And who do you think that is? Hint, I don’t think it is MBS.

    Don Stewart

    • @Don Stewart

      “So one of the leaders of the current movement needs to die as a lesson to the others. And who do you think that is? Hint, I don’t think it is MBS.”

      If you are thinking about China or Russia. Both are in a different league to Libya or Iraq. They are both more than capable of retaliating.

      So….. Brazil or India?🤔

    • @Dr Tim.

      Only that, with reference to earlier posts, regime change doesn’t seem an option for US policy makers when considering Russia and China.

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