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When This Ends, Everybody Gets Hurt

And the end is uncomfortably close
Wednesday, January 21, 2015, 11:45 PM

Central banks around the globe have taken us all into uncharted territory, where the possible paths boil down to a binary outcome: either it all works out or it doesn’t.

Unfortunately, the ‘it all works out’ outcome has a very low probability of actually happening; so the binary outcome isn't equally weighted like a coin toss.  By ‘working out’, here’s what the central banks all striving (praying?) for:

  • Inflation of 2% to 3% per year
  • Economic growth of at least 6% per year (nominal) and a real (inflation adjusted) rate of 3% per year.

The reason that the central banks want all of this growth and inflation isn't because it's good for you, me, or anybody we know. Instead, the bankers need it because that’s what our exponential money system requires.

Slaves To The System

It bears repeating, inflation is not rising prices -- those are symptoms of inflation -- but instead is the expansion of the existing stock of money and credit.  If we observe the symptom of 'rising prices', then that means the underlying mechanism of expansion of credit (mainly) and money (less important because the money supply is a only fraction of the volume of credit) is functioning.

Think of it this way: it’s like the central banks want a slightly feverish patient and so they track the patient's temperature. They tell everyone that 100 degrees, perhaps 101, is the perfect termpurature...slightly elevated, but not too much.  But the patient's temperature is merely a symptom.  The underlying reason for having an elevated temperature is having too many foreign bodies living within the patient, like having too much money and credit in an economic arena.

With increasing levels of credit in our monetary system, the system functions reasonably well and enough new loans are being made to service both the principal balances of prior loans plus their interest payments.  But with stagnant or falling levels of credit, the exact opposite is true and the entire financial system slips into collapse mode.

We are now in service to our system of money, not the other way around. That is, we have a money system to which we are now slaves. It's either expanding or collapsing, but has no stable state; no easy equilibrium that it can inhabit. 

The tragedy in all this is that we can easily have a different system of money that does not make such unreasonable demands of us. But virtually nobody in power is (yet) discussing this idea.

The Folly Of Endless Growth

Getting back to the central bank wish list, nominal GDP of at least 6% with real growth of 3% allows governments to expand their debt loads by 3% per year without them ever getting larger in proportion to the underlying economy. That way, they never have to be paid back. They only grow larger, and this means more borrowing/credit in the system which is part of requirement #1, above.

So the entire central bank playbook, in slavish devoted service to an obviously dysfunctional system of money, boils down to endless credit growth coupled to endless economic growth.

Endless growth. When you hear of how central bankers are ‘battling deflation’ or ‘seeking price stability of at least 2% inflation’, just think to yourself What they really want is endless growth.

The next thought you should have is Hey, is that even possible? Or even, advisable?

The answers, clearly, are No and NO!

Every day, we have further confirmation of the idea that the world has limits and that economic growth requires more resources. Water, soil, fisheries, forests, ore bodies, and energy sources are all being overtaxed and rapidly depleted at even today’s level of economic activity.

If resources are finite but economic growth has to be endless (again, to support our chosen system of money, and for no other reason), then there’s a gigantic conflict brewing. And that's the subtext to the entire confusing array of political and monetary actions and reactions of late. 

A Simple Example

The idea that endless growth isn't realistic needs to be explored as often as possible simply to counteract the huge volume of spoken and written words that profess it’s exactly what we both want and need.

For most people indoctrinated with the endless growth narrative, we have to engage in a bit of deprogramming before we can have a proper conversation.

So let’s start with a simple example that lays this all bare.

China has been on a very impressive program of economic expansion. Of late, that’s slowed down just a tiny bit and it’s causing quite a bit of worry among the Chinese leadership, which believes that fast economic expansion supports social stability:

Chinese economy posts lowest growth rate since 1990

Jan 20, 2015

BEIJING — China’s economy last year slumped to its lowest rate of growth in 24 years, the government announced Tuesday.

China’s gross domestic product grew 7.3% in the last quarter of 2014, and 7.4% over the whole year, the slowest rate since 1990 and below the official target of 7.5%.

(Source)

Now, let’s examine that 7.4% rate of growth using the handy ‘rule of 72’, which will answer the question: How long will it take, in years, for something expanding annually at 7.4% to double?

The answer is simply 72/7.4 which equals 9.7 years.  That is, if China continues to expand at 7.4%, its economy will be fully twice are large as it currently is in just under ten years.

Twice. As. Large.

Think about that for a minute. That means (roughly speaking) twice as much energy consumed, twice as many cars on the road, twice as many factories churning out twice as much stuff. Twice as much economic activity in less than a single decade from now. That’s what a GDP growth rate of 7.4% means.

Of course, you won't encounter any such dot-connecting in any of the articles you will read about China’s growth -- desired or actual -- because the implications of being ‘twice as large’ are not yet part of the global dialog about economic growth. Yet.

So let’s explore just one of those implications by looking at China’s coal consumption. Energy and economic activity are very tightly linked. If you want to have more economic activity, you're going to use more energy. Coal is heavily used in China to generate electricity, which is a critical form of energy for economic expansion.

In fact, when we look at China’s energy consumption over these past few decades, we note one period between 2002 and 2009 where its energy use fully doubled, with coal being, by far, the largest component of that doubling:

(Source)

In just 7 years, energy use doubled!  Again returning to our handy ‘rule of 72,’ but in an opposite direction, we can divide 72 by 7 years and calculate that China’s energy use was growing by 10.3% per year during this period.

How does this compare to China’s reported GDP growth during the same period?  Well, according to The World Bank, between the years 2002 and 2009 China sported an average rate of GDP growth of 11%.

As expected, the growth rates for energy consumption (10.3%) and economic expansion (11%) were very tightly coupled.

Now let’s take note that, in 2012, China consumed 49% of all the coal consumed in the world. How much of the world’s coal will China consume if it doubles in the next 10 years?

Well, a doubling is a doubling: China’s current 7.4% GDP growth rate implies that in just 10 years, give or take a little, China will consume as much coal by itself as the entire world does today.

But then what? What about the next 10 years after that?  Eventually, we all have to come to the same conclusion: it's just not possible for China to double its coal consumption forever. Sooner or later, real physical and environmental limits apply.

It's Already 'Later'

My argument is that it’s already ‘later’. We're living through the period of time when that dawning recognition of limits will finally burst over the horizon, shining a very bright spotlight on a frightening number of our global society's unsustainable practices.

The most urgent of them all, as far as everyone reading this is concerned, is the very uncomfortable fact that it is our system of money that is most likely to break first and hardest because its very design demands endless growth, without which collapse ensues.

As the China example illustrates, the prospect of endless economic growth is simply not a workable plan because resources are not infinite. Our global obsession with growth is the very definition of unsustainable. Someday reality is going to intrude and ruin the party and very few are actually prepared for that future.

A very big problem we all share is that the world’s central banks have been vigorously defending the status quo (of endless growth) and that means we all face a very bad period of adjustment when their efforts finally fail.

That moment of failure is coming closer and closer. Recent actions by central banks have exposed their increasingly desperate mindset and have even called into question the one thing that absolutely cannot ever be questioned: the ability of the central banks to deliver on the promise of endless growth.

Central bank credibility (as fictitious as that may be) is essential to maintaining the current narrative, BUT central banks are rapidly losing their credibility (which should have happened simply via deductive reasoning a long time ago) and the strains are showing. Their actions are increasingly wild and extreme (SNB, anyone?), and it's our view that 2015- 2016 will mark the end of this long run of overly-ambitious central bankers and over-complacent markets.

When credibility in central bank omnipotence snaps, buckle up. Risk will get re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.

In Part 2: The Consequences Playbook we spell out what will happen next and how you should be preparing today for what might happen tomorrow. Suffice it to say, a tremendous amount of wealth will be lost if (really, when) the central banks lose control. And standards of living for many will be impacted.

A little preparation today can make a huge difference in your future.

Click here to access Part 2 of this report (free executive summary; enrollment required for full access)

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58 Comments

Theedrich's picture
Theedrich
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Davos - January 2015

In the MSM interviews with Movers and Shakers from Davos this week, the biggies are all exuding lots of confidence and solutions to any and all problems.  Mario (not the video game) is slyly promising QE (i.e., RobinHoodism) for Club Med, but (because of Germany et al.'s resistance) in a rather contorted way that will only buy a little time.

In other words:  more of the same.  Kick the can down the road as long as you can and maybe a fairy godmother will appear and make all the darkening clouds disappear so that BAU run on forever.

Montana Native's picture
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Growth

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mobius
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Finance is just another word for Debt...

A timely post for me, Chris.  Just this week I was discussing how finance and financing has been so prevalent in our personal lives, that it seems as though the concept Debt has become omnipresent and acceptable.  But just like Voldemort, its name is never spoken outright.  What saddens me in this discourse is that government is setting the wrong example.  When the state attempts to finance itself as a corporation, well the private & public sector economics clash and make a big mess of things.

As I am, in Adam's (Taggart) words, in the "fallow" period of finding authentic work, and currently a step "out of the money system", it is very very clear to me how the pressure to earn, the pressure to spend and specifically to consume is omnipresent.  But there seems to be a change in the air. 

In my social circles, I'm noticing that I'm not the only one and that there are more folks in my age group (mid 40s) who are taking a "time out" from the rat race.   My gentle words to them is that being a jack-of-a-trades might serve better in the long run, than a specialist in an energy demanding industry.

There's just a lot of nonsense out there in the economy these days..  And we need to get back to basics.

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Re aussie growth video

'That's only ever happened' sly look at the camera 'in the past' absolutely brilliant!!!!!!

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I agree entirely with

what you say, in fact I would simplify it further by stating that the issuers of the currency (promises to pay) have a complete monopoly on the people of this planet and all the resources. as long as they have citizens that are willing to work for the debt, forced through legal shenanigans basic needs or otherwise, that evil monopoly will prevail until the ultimate demise of humanity. 

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tying the threads together

I have to say, there are few people who can tie the threads together in as simple, yet satisfying a way as Chris.

A few simple examples that are directly on point serve to remind us what the conclusion must be, then point out where we are on the timeline, and what the next steps are likely to be.

Time2help's picture
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Ruh-oh...

Market so far - reaction to ECB QE is pretty creepy, flat and trending down.

Snydeman's picture
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Trying to explain this to family and friends on Facebook...
This is my post to FB. Am I missing anything big?
 
*******************************************************************************************************
 
Economic- So, the global currency wars enter a new phase with the European Central Bank's decision to buy sovereign bonds to the tune of 60 billion Euros a month. For those who know about such things, "buying bonds" happens when a central bank creates money and uses that newly created money to buy the bonds issued by governments in order to raise money to cover budget deficits/shortfalls. So, in essence, the central bank buys up government debts. This has the double effect of injecting cash into the market and enabling governments to carry larger debts than might otherwise be possible or feasible.
 
As I understand it, there are three problems with this approach:
 
1) Debt is debt. It is a claim on the future, because when you borrow money now you are implicitly saying the future will pay those debts back. The larger the debt you incur now, the more prosperous you expect the future to be later. You also hobble the future prosperity more by saddling the future's income with debt payments. Anyone who does their own family finances understands this concept, and it isn't any different for governments than it is for us. Enabling the government of a nation to carry larger debt doesn't create prosperity...it just shifts prosperity from the future into today. At the expense of the future.
 
2) The newly created money ultimately creates more supply of fiat currency in the market, which lowers the value of each piece of money. The declining value of money usually manifests when prices rise; this is what we term "inflation." The reason why we haven't seen inflation from these rounds of money-printing is because the money is being injected into the bond and stock markets, where most average people don't hold assets, and where it has far less impact on "Main street" than it does on "Wall Street." THIS is why the economy hasn't gotten substantially better for average people but HAS been a windfall for the wealthier classes (who ARE substantial players in bond and stock markets). This is also explains why the stock market has reached such lofty heights, while the bond market has seen such historic low yields: inflation has hit the stock and bond markets, and prices have risen.
 
3) When a nation's central bank prints money, it also has the effect of lowering the value of that nation's currency against OTHER currencies. This makes exports from the nation that is printing money *cheaper* vis-a-vis other countries, which in theory makes a nation's exports more attractive and causes other nation's exports to become more expensive. Dropping the value of one's currency, then, is a boon to YOUR exporting companies and a threat to OTHER nation's exporters. Thus, printing money is an economic weapon. That is why many economists call programs like "Quantitative Easing" a currency war. It's been going on since 2007, and it's getting ugly.
 
In any case, with the European Central Bank now printing money, the circle is now complete. Japan is printing money, the United States has printed money, China is printing money, and the European Union is printing money. 
 
And the global economy is still declining, and falling into recession (as evidenced by declining GDP's, falling oil prices, falling copper prices, etc). So, the laughable thing is that printing money is NOT creating prosperity, and is in fact causing more volatility and bigger "bubbles" of assets that become way, way over-valued. I'm having real trouble seeing how this ends well.
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Just missing a link

to this site, otherwise perfect.

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WTF black swan?

What is going on in the ME?  Bebe siding with Senators in pushing more Iran sanctions, while Mossad is telling Obama to scuttle the sanction bills because they would screw up nuclear negotiations with Iran.

http://www.bloombergview.com/articles/2015-01-22/netanyahu-mossad-split-...

Quote:
The Israeli intelligence agency Mossad has broken ranks with Prime Minister Benjamin Netanyahu, telling U.S. officials and lawmakers that a new Iran sanctions bill in the U.S. Congress would tank the Iran nuclear negotiations.

Huh, how do you read this split in Israel?  Certainly sews confusion in the already fractious ME.

Doug

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Link

Oh, I've linked PP many times on Facebook! Probably why so many friends and family treat me as a black sheep these days.

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Black sheeps unite ;)

Thanks, Snydeman, for the clarity of your explanation. For me too, it's perfect, and I think it nicely complements Chris's work. I may well use it with others as an intro to the latter (giving credit to you, of course, for your thoughts).

Terry L

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Terry L wrote: Thanks,

Terry L wrote:

Thanks, Snydeman, for the clarity of your explanation. For me too, it's perfect, and I think it nicely complements Chris's work. I may well use it with others as an intro to the latter (giving credit to you, of course, for your thoughts).

Terry L

Thanks, Terry! No worries on giving me credit: At best all I have done is synthesize what Chris and others have been saying, and trying to translate it to "everyday speak" for my friends, family, and students (something I regularly do as a teacher anyway). Chris exceeds at doing this already, and all I wanted to do was find a way to explain the ECB situation in a way they would be likely to read it, should they actually give enough craps to bother. I can't really affect the latter, mind you. In any case, the research and hard work is theirs, not mine. I'm just a layman trying to understand things that are being said here and on sites like Zerohedge, Truthdig, etc.

Either way I'm glad my synopsis helped!

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QE will accomplish nothing

With rates at historic lows, my vote is: QE will end up doing nothing meaningful to get the Eurozone out of its difficulty.  Except driving the Euro lower (currently trading with a 113 handle, prices last seen in 2003) and gold higher - much higher in Euro terms - I think Euro QE will only demonstrate just how powerless the ECB is to address the primary issue: too much debt.

Debt hasn't been on the table for a long time now.  However in three days,  debt will once again become the elephant in the room.

The ECB will have put an ill-fitting bandage on a minor wound, while the patient is just about to have a heart attack.

I will say this much.  The principle of money printing and buying bonds on a pari-passu basis having been established might be very important for the debt resolution step.  I just wonder just how much fuss and bother we all need to go to before the debt issue finally gets addressed.

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The music seems to be stopping...

...and everyone seems to be racing for a chair.

I've been trying to connect the dots on all the financial and geopolitical chaos of the last few years and I'm coming to the conclusion that it appears that the US is doing everything in it's power to preserve dollar hegemony even though that probably isn't possible. Jim Rickards last two books on the subject call it a currency war, but now it seems like he's actually dancing around the next logical step. I'm beginning to think it's actually much larger than that. I think it's actually going to require a global monetary reset and a shift to a supra-national SDR.

I recently found JC Collin's website philosophyofmetrics.com. His main premise is that most of what we're seeing in the world today are ripples on the surface of the international monetary system as it shifts from dollar hegemony to an SDR based multipolar world. All of the real action is going on behind closed doors, beneath the surface as it were, as the worlds governments and central banks jockey for position ahead of the next systemic shock that precipitates the next Bretton Woods. He appears to have been writing for a years now but I just stumbled on to him a few weeks ago. I've been lurking here, and other places like it, for years and never heard of him. Anyone else familiar with his work and had the time to digest what he's saying?

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Not read it

I've not read it, but will visit the site later today and start reading! I have a hard time imagining a scenario where the vast majority of the world - especially all of the "big players" - accept a global currency. The financial losses from a shift away from today's currencies to an entirely new model would be catastrophic at best, and the conditions that might lead us to accept such a thing would have to be worse than they were in the 1930s and 40s, right? Those kinds of conditions coming again, but on an exponential scale relative to the Great Depression, would most certainly lead to conflict - a conflict I can't see us walking away from. Then again, I doubt anyone in the 1920s could have foreseen the great Capitalist nations working hand in hand with the Communist Devil (USSR) either, so I suppose anything is possible.

The other problem is that even IF there somehow becomes a global currency that is accepted worldwide, that's only one of the many crises we are facing in the 20-teens (as Chris likes to call them); energy won't suddenly appear if we adopt SDCs, and the environment sure doesn't care either way...it will still shift in ways that will put us under major stress.

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THE WEAKEST LINK!

Aloha! Been writing on this subject many years and back in the 2008 era, that almost destroyed the world, I used to equate the EU to that tv show The Weakest Link. With every "union", whether it is a marriage or a trade union or the EU the union is only as strong as its weakest link.

With that in mind I raise the "growth" and call with ... THE WEAKEST LINK!

https://www.youtube.com/watch?v=rK0De210TBQ 

Bankers Slave's picture
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The real EU agenda

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Thanks

Thank you for passing along the link.  Very interesting reading so far (started with The Shadow of Tomorrow).

Also (not necessarily on topic), for anyone interested in non-copyrighted, free stuff, checkout gutenberg.org.  I recently downloaded a copy of  "An Essay on the Principle of Population" by Thomas Malthus to satisfy an intellectual curiosity I had about this particular work.  Another interesting site, IMO, is themonkeytrap.us (Nate Hagens).

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Buying 30y T bills is Delusional

Those buying 30yr T bills are delusional. In 30 yrs, cargo-cult bankers and economists in animal skins will be dancing around a bonfire on the rubble of the Washington monument, celebrating their latest animal sacrifice and chanting to the god of Resources Forever.

Here I've relabelled a secular cycle chart with years. It looks similar to Ugo Bardi's 'Seneca Cliff', and captures the essence of 'Limits to Growth'. To paraphrase the ArchDruid, 'There is no brighter future ahead ....  Get over it ......

Regards, rabblebabble666.

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Chinese Economy

There is no secret, once you have lots of debts associated with consumption and mal investments, economic growth slows, could even turn negative. Unlike Americans and Europeans having too much debts on consumption, China has too much mal-investments on factories - a situation like USA before the Great Depression.

China is big enough to build a self sufficient economy, especially while overseas demand can no longer provide its need. China needs lots of energy. While burning coal is not a solution, at least so far, Chinese government embrace nuclear energy. Many projects are going on - from Thorium reactors to nuclear fuel regeneration programs. So far, she is not bogged down by extremists, especially Western extremists outside her border. Since it is one of five so call "declared nuclear power", China is not subject to limitations imposed by IAEA.

If China keeps pushing forward its nuclear energy programs while Western nations reject NUKE for whatever reasons, soon, US and Europe run risk to lag behind China in NUKE. In future, even if some Americans want to build NUKE power plant, they may have to buy from China.

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Off a cliff

Globalism is nothing more than privatized kleptocracy scheme hollowing out economies of sovereign states.

The idea is to get countries into the debt system and when they owe too much money the IMF technocrats  demand austerity.
Now private interests can buy public infrastructure for pennies on the dollar---worth so much more and charge far greater prices for the services that were once paid for with general tax dollars.
They are doing this the world over and here as well. With the Republicans in control they will privatize all public utilities with a fundamentalist fervor.

While the Republicans fight against govt. they fail to tell us what the difference is between state bureaucracies and private bureaucracies inhabited by middle management to hike up the prices of services. What's the difference between public and private monopoly.

I say a fish head by any other name would smell as putrid.

I know a number of people in the health field who say a whole new graft of people run hospital administration. That's a huge reason why health costs have skyrocketed since the 1990s.

This system is a slave to Wall St. which demands profits or the gutting of corporations, though a few are guaranteed success no matter what. (that isn't capitalism at all)

We have foreign entities contributing to our elections and many buying or "renting" public infrasturcture and real estate here-creating a rentier system on steroids.

As far as I can see they will never give up this neoliberal system unless absolutely forced against a wall, so expect this to go down very badly.
 

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BeingThere wrote: Globalism

BeingThere wrote:

Globalism is nothing more than privatized kleptocracy scheme hollowing out economies of sovereign states.

(...)

As far as I can see they will never give up this neoliberal system unless absolutely forced against a wall, so expect this to go down very badly.

I share that conclusion, both the why and the what.

Because people are people and will never willingly cede power, no matter how worthy the reason, the status quo will be maintained until it breaks.

Our system of debt/money is an extraordinarily good vehicle for accumulating and holding onto power, which is why it is so revered and loved among the powerful.  But it has this tiny, little flaw of needing to constantly grow exponentially, which means that the seeds of its own demise are sown within it.

Eventually this all does end badly, at least if the desired outcome is for endless growth and that everybody gets to keep their fantasy wealth paper promise tickets that they've so far amassed.  

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When This Ends, Everybody Gets Hurt

I really appreciate this article Chris, and the way in which you write...explain...educate.

I've actually read few articles from this web site. May have to tune in more.

Thanks again.

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Comment

"Eventually this all does end badly, at least if the desired outcome is for endless growth and that everybody gets to keep their fantasy wealth paper promise tickets that they've so far amassed."

When it ends badly people probably will get to keep their fantasy wealth promise tickets. They won't be worth enough to confiscate. Their digital wealth may or may not appear on their monitors...account statements...etc.

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The $ons of Cain

From Ishmael, Chapter 9.8:

Quote:

“A minute ago, you told me that the Takers will never give up their tyranny over the world, no matter how bad things get.  How did they get to be this way?”

I goggled at him.

“They got to be this way because they’ve always believed that what they were doing was right – and therefore to be done at any cost whatsoever.  They’ve always believed that, like the gods, they know what is right and what is wrong to do, and what they’re doing is right.  Do you see how they’ve demonstrated what I’m saying?”

“Not offhand.”

“They’ve demonstrated it by forcing everyone in the world to do what they do, to live the way they live.  Everyone has to be forced to live like the Takers, because the Takers have the one right way.”

“Yes, I can see that.”

“Many peoples among the Leavers practiced agriculture, but they were never obsessed by the delusions that what they were doing was right, that everyone in the entire world had to practice agriculture, that every last square yard of the planet had to be devoted to it.  They didn’t say to the people around them, ‘You may no longer live by hunting and gathering.  This is wrong.  This is evil, and we forbid it.  Put your land under cultivation or we’ll wipe you out.’  What they said was, ‘You want to be hunter-gatherers?  That’s fine with us.  That’s great.  We want to be agriculturalists.  You be hunter-gatherers and we’ll be agriculturalists.  We don’t pretend to know which way is right.   We just know which way we prefer.’”

“Yes, I see.”

“And if they got tired of being agriculturalists, if the found they didn’t like where it was leading them in their particular adaptation, they were able to give up.  They didn’t say to themselves, ‘Well, we’ve got to keep going at this even if it kills us, because this is the right way to live.’  For example, there was once a people who constructed a vast network of irrigation canals in order to farm the deserts of what is now southeastern Arizona.  They maintained these canals for three thousand years and built a fairly advanced civilization, but in the end they were free to say, ‘This is a toilsome and unsatisfying way to live, so to hell with it.’  They simply walked away from the whole thing and put it so totally out of mind that we don’t even know what they called themselves.  The only name we have for them is the one the Pima Indians gave them: Hohokam – those who vanished.

But it’s not going to be this easy for the Takers.  It’s going to be hard as hell for them to give up, because what they’re doing is right, and they have to go on doing it even if it means destroying the world and mankind with it.”

“Yes, that is the way it seems.”

“Giving up would mean…what?”

“Giving up would mean…It would mean that all along they’ve been wrong.  It would mean that they’d never know how to rule the world.  It would mean…relinquishing their pretensions to godhood.”

“It would mean spitting out the fruit of that tree (of knowledge of good and evil) and giving the rule of the world back to the gods.”

“Yes.”

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Ishmael

The most profound book that I have ever read.   Thanks for passing along.  

John

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Ishmael

jturbo68 wrote:

The most profound book that I have ever read.   Thanks for passing along.  

John

Yes, should have been introduced to the high school curriculum a long time ago...

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We need growth

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Aussie growth video

Is that a real program? If I closed my eyes I would have believed I was listening to a Monty Python clip!

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Growth

thebrewer wrote:

Is that a real program? If I closed my eyes I would have believed I was listening to a Monty Python clip!

 

Absolutely it's real... albeit in a similar vein as the famous "Roy and HG"

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Ishmael

Agreed. It was that book that set me on the path of looking past the voice of Mother Culture, to peel back the rug and look underneath at what was really going on. That book destroyed my paradigms. I wonder if Daniel Quinn knows how influential he has been?

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Ishmael

I couldn't agree more, but luckily for me I actually did read it in World History as a freshman in HS, but I had a very special teacher.  It was about a year after Ishmael was first published and Daniel Quinn lived in Austin at the time and I remember something about him being a friend or acquaintance of my teacher.  I was already well down the Ishmaelian path before that but it was a truly amazing book to read at 14, for class credit to boot.  I've read it several times since and suggested or loaned it to a number of friends and family over the years. I've enjoyed all Quinn's other books as well, but Ishmael is the masterpiece for me.  I hope schools teach it, or at least allow it =o, but I know my kids will be reading it as soon as it's appropriate for them.  

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Very nice article. sort of

Very nice article. sort of eye opening facts that really made me think.

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Reply - a few points about China, etc.

CM: "China has been on a very impressive program of economic expansion. Of late,"

Yes, for about 50 years. And it has NEEDED such a program, to claw its way out of poverty.

CM: "that's slowed down just a tiny bit"

Yes, a very tiny bit! An almost insignificant bit; like, from 7.7% GDP growth to 7.4%.  That's very small.

CM: "and it's causing quite a bit of worry among the Chinese leadership, which believes that fast economic expansion supports social stability"

They are correct that economic expansion supports social stability, but where is the evidence that the recent minor fall-off is "causing quite a bit of worry among the Chinese leadership"?  Methinks what it is causing is quite a bit of speculation among Westerners, but not much worry among Chinese leadership. Why would it? It is too small for serious worrying.

CM: "If you want to have more economic activity, you're going to use more energy. Coal is heavily used in China to generate electricity, which is a critical form of energy for economic expansion. In fact, when we look at China's energy consumption over these past few decades, we note one period between 2002 and 2009 where its energy use fully doubled, with coal being, by far, the largest component of that doubling"

True. But that is changing. 2009 was 6 years ago. China is turning the corner, beginning to replace coal with other energy sources. Renewables are growing at a fantastic rate. See:
www.greenpeace.org/international/Global/international/briefings/climate/...
The End of Chinas Coal Boom: 6 Facts You Should Know
April 2014

Of course, it will not happen overnight. Such epochal changes take years and decades to fully play out. But the point is that recent patterns (e.g. data from 2002 to 2009) cannot necessarily -- and in this case ought not -- be extrapolated directly to the next decade or two, as though everything is going to continue exactly as things were. Such extrapolations don't account for CHANGE, which can happen, and in this case is certainly happening.

CM: "Now let's take note that, in 2012, China consumed 49% of all the coal consumed in the world. How much of the world's coal will China consume if it doubles in the next 10 years?"

That depends. Are renewables going to continue to grow at the fantastic rate that they have recently been growing? Probably, yes. In which case, China will leave a lot more of the world's coal in the ground. China has more commitment to renewables than any other country on the planet, save possibly Germany.

CM: "But then what? What about the next 10 years after that?  Eventually, we all have to come to the same conclusion: it's just not possible for China to double its coal consumption forever. Sooner or later, real physical and environmental limits apply."

Not possible, perhaps true. But it is a moot point, because it is not necessary. With renewables and plentiful (for the next century or so) natural gas, energy needs for the growth that is required will not be hard to meet. Energy and growth needs will soon be declining. Energy, because once a physical economy and infrastructure mature -- i.e. once billions of tons of concrete and steel are already in place, once vast new cities have been built, once transcontinental rail lines have been laid, (etcetera), with life cycles running in to centuries -- it is not necessary to keep building at the same rate. Scrap steel becomes a major source of steel; i.e. less demand (otherwise huge) for coal for production of new steel. Demand for (highly energy-intensive) concrete drops off. These straight-line extrapolations from the past to the future are meaningless.

Growth needs will decline also. Growth at the nosebleed (double-digit) speed that China posted for the last few decades will not be necessary. For many years, China HAD to grow at a breakneck pace, given the miserable hole out of which it was climbing. China was ascending from feudal poverty to (almost) postmodern affluence inside of about two generations -- a spectacular accomplishment, and one requiring major sacrifice (such as burning a scazillion tons of coal, releasing a scazillion tons of CO2, and creating massive air pollution problems). But as more of the population is lifted out of poverty and into relative affluence, and as enduring infrastructure is built, the urgency of further growth is reduced. Slow growth or even steady-state becomes palatable. China is just now (or soon) reaching the point where slower annual growth will be OK politically/socially, as well as being all that a maturing economy can properly handle. Double-digit growth will not be necessary, nor possible, nor really desirable. Such is the case with a rapidly-maturing large nation and physical economy.

If we want to worry about energy needs for further growth, we need to think more about India and Africa, and a few other places, not so much China. India is not up to China's level yet; maybe 20 years. Africa is really retarded; more like 40 years. They will both need massive energy for development. But then, energy needs for India and Africa can be met with a much larger percentage of renewables, particularly solar, given insolation geography combined with the collapsing price of PVs, and other technical advances. India's Modi is, admirably, leading on the solar front.

A further positive factor is population. Fertility is dropping like a rock, almost everywhere except Africa. In China and India it is already below replacement. This means that population in those areas will be aging and declining later in this century, after reaching peak in a decade or two. The combination of large installed infrastructure base, collapsing cost and skyrocketing cost-effectiveness of renewables, and aging/declining population, will bode well for sustainability of energy resources and environment, both, while allowing everyone to live a decent life.

Now, if only Guy McPherson is wrong, we might just make it... wink

......................................

further background; snippets:

http://blog.rmi.org/blog_2013_03_26_2013_Asias_Accelerating_Energy_Revol...
Mar 26, 2013
Amory B. Lovins
Asia's Accelerating Energy Revolution
 coal still supplies two-thirds of China's energy and nearly four-fifths of its electricity, but its star is dimming. Two-thirds of the coal-fired power plants added in 2003-06 were apparently unauthorized by Beijing, but in 2006-10, net additions of coal-fired capacity fell by half, then kept shrinking. In 2011, investment in new coal plants fell by one-fourth to less than half its 2005 level....
 In November 2012, the 18th Party Congress for the first time headlined a "revolution in energy production and use" -- strong language from an organization founded in revolution. The incoming leaders had already earmarked major funding to explore how to accelerate China's transition beyond coal. They clearly intend to fix what President Hu called an "unbalanced, uncoordinated, and unsustainable" development pattern and to get off coal faster. An unprecedented 2012 dip in coal-fired generation, even as the economy grew, was caused largely by a slowdown in manufacturing and strong hydro runoff, but renewables and efficiency too are starting to displace coal. China is making a real bid to be the new Germany, leading not only in making but also in applying its abundant renewable assets.

http://www.marketoracle.co.uk/Article31323.html
 Will China Save CleanTech
 Nov 02, 2011 - By: Andrew_McKillop
 Today's Cleantech boomers in the western 'postindustrial' countries consuming every imaginable type of industrial goods - and now Cleantech industrial goods - are almost prostrate with respect and admiration of the Chinese juggernaut. The Chinese didn't just talk about it - they did it!
 [Observe] the China Development Bank (CDB) and its relentless funding of Cleantech: nothing like this entity exists in the late stage neoliberal No Alternative western consumer countries. It would be treated as a North Korean notion if anybody dared propose it. European and American politicians battle it out with a string of Victorian capitalist style cases of corporate theft, fraud and insider dealing in the Cleantech sector ... but the Chinese use rigorous state control and pump billions into projects which work in the Cleantech sector. That is the difference.
 China is attacking [the] major technical and infrastructure problem [of super-grid development] - which will snowball if windpower and solar power plant generating capacity rises above about 25% of total capacity - through setting aside around $45 billion for smart-grid companies and technologies, for the period 2011-2016. Advantaging the higher goal of super grids able to transport a large amount of power around the clock, over smart grids which only serve to limit local demand through tariff price changes and supply cutoffs round the clock, China will likely leapfrog the coming power blackouts in countries that played Victorian roulette wheel capitalism but do not like the results. The blackouts are programmed and certain because of refusal to act against corporate graft - of this we can be sure.

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Economist R Duncan,  claims

Economist R Duncan,  claims we've got another 17 trillion more to go.  borrow and invest!  he says capitalism is dead, and  its  "creditism" now

(See his video:   http://vimeo.com/user20236372/review/101487179/54bf993e5d)

"we'll profit from the sales of new products like cures for cancer"

yeah, but what will you be paid in? credit? Zimbabwei bucks?  

where the wheels come off this theory is when the currency fails, or when confidence in credit fails and when you can no longer use the over-printed over-extended medium of exchange -for exchange- it will fail because credit that is limitless becomes meanigless, and those checks written limitless borrowing are no longer good for payment, no longer deemed of value.

more than 1/2 the world's population thinks Gold is real money and is not hypnotized by paper

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Some Basic Math

alan2102 wrote:

CM: "If you want to have more economic activity, you're going to use more energy. Coal is heavily used in China to generate electricity, which is a critical form of energy for economic expansion. In fact, when we look at China's energy consumption over these past few decades, we note one period between 2002 and 2009 where its energy use fully doubled, with coal being, by far, the largest component of that doubling"

True. But that is changing. 2009 was 6 years ago. China is turning the corner, beginning to replace coal with other energy sources. Renewables are growing at a fantastic rate. See:
www.greenpeace.org/international/Global/international/briefings/climate/...

Of course, it will not happen overnight. Such epochal changes take years and decades to fully play out. But the point is that recent patterns (e.g. data from 2002 to 2009) cannot necessarily -- and in this case ought not -- be extrapolated directly to the next decade or two, as though everything is going to continue exactly as things were. Such extrapolations don't account for CHANGE, which can happen, and in this case is certainly happening.

CM: "Now let's take note that, in 2012, China consumed 49% of all the coal consumed in the world. How much of the world's coal will China consume if it doubles in the next 10 years?"

That depends. Are renewables going to continue to grow at the fantastic rate that they have recently been growing? Probably, yes. In which case, China will leave a lot more of the world's coal in the ground. China has more commitment to renewables than any other country on the planet, save possibly Germany.

CM: "But then what? What about the next 10 years after that?  Eventually, we all have to come to the same conclusion: it's just not possible for China to double its coal consumption forever. Sooner or later, real physical and environmental limits apply."

Not possible, perhaps true. But it is a moot point, because it is not necessary. With renewables and plentiful (for the next century or so) natural gas, energy needs for the growth that is required will not be hard to meet. Energy and growth needs will soon be declining. Energy, because once a physical economy and infrastructure mature -- i.e. once billions of tons of concrete and steel are already in place, once vast new cities have been built, once transcontinental rail lines have been laid, (etcetera), with life cycles running in to centuries -- it is not necessary to keep building at the same rate. Scrap steel becomes a major source of steel; i.e. less demand (otherwise huge) for coal for production of new steel. Demand for (highly energy-intensive) concrete drops off. These straight-line extrapolations from the past to the future are meaningless.

Alan - I share your passion for moving towards renewables, especially solar thermal, but I am pretty much allergic now to those who promote renewables with lots of lofty and grabby assertions but who fail to perform the basic math necessary to make the case.

It really does a disservice because it does not convert the skeptics, sounds great to the choir, and misleads the uneducated.

So let's do the basic math, and back it up with facts.

First, you may have missed it but the chart I provided on China's energy consumption included renewables  - it's that one pixel wide orange smear that only begins to appear on this chart in the last few years.

Here's a more recent chart that goes through 2012 giving us one more year of data to view:

(Source)

But, as you say, renewables are increasing very fast.  On a percentage basis that's a fact.  

Between 2011 and 2013 China's installed wind capacity fully doubled from 50 Twhr of production to 100 Twhr in 2013.  That last fact is from your cited Greenpeace publication, so you should like it.  And it's a massive doubling!

Now here's the math:

  • Converting from Twhr to barrels of oil equivalent or BOE (so we can understand and appreciate the above chart), we find that 100 Twhr = 61.3 million BOE. Note that 100 Twhr is the same thing as 100 billion kwhr (important because everything is usually quoted in kwhr and I'll do the same hereafter to keep everything consistent) 
  • With China's total energy demand running at 2,800 million BOE we find that wind power is (61.3) / (2,800) = 2.2% of the over all mix.  that explains the thin smear of orange at the top of the above chart.
  • However, over the same period of time (2011 - 2013) coal use in China increased by 400 million tons per year which is equivalent to 83.5 million BOE, which converts to 136 billion kwhr. Note that 136 is larger than 100 (see bullet #1 above) which means that China grew its total coal consumption by an amount larger than its total installed wind capacity in 2013. 

By this math, the longer China keeps on this path the larger the gap between the installed coal and wind power bases.  This is where percentages can lead people astray, and it's an easy trap to fall into.  Hey look, the rate of coal use is falling, and wind's is exploding, wind must be winning!

The problem is when the base of one, wind, is tiny and the base of the other, coal, is so huge.  In these circumstances it's best to also refer to total aggregate numbers as I have just done.

Next, we must always answer a few simple questions before deciding the future is as simple as deciding to stop using coal and use wind instead.

  1. How many more complete doublings would be required before wind could 100% replace coal?  How about a 50% replacement?
  2. Are there enough wind sites in China to accommodate all of that growth?
  3. How do we propose to deal with the intermittency issue?  It's good to have hospitals powered up even on days when the wind is not blowing.

It turns out the answer to these questions are all very much non-simple, non-easy sorts of answers.  This is a far more complex field than you've presented.

Finally, there is not a century of natural gas, you have that 'fact' badly wrong.  There's ~11 years of proved reserves in the US at current rates of consumption, but every single thing that we'd use gas for instead of coal would, of course, accelerate our consumption peeling decades off of the amount left.

We can argue over how much of the less certain gas reserves exist, but even when we include the most recent EIA estimates of those categories, in order of increasing dodgy-ness, when we toss in probable resources we get to 31 years total remaining gas , and then 60 total years of remaining gas once we also toss in possible resources, and finally to 83 years when we chuck in speculative resources.    Again, all these numbers are at current rates of consumption.

If we just grow our use of natural gas by 4% a year, hardly a big number if we are going to use it instead of coal plus to build a super-duper shiny new future, Then those same numbers from proved to speculative give us the following number of years of natural gas in the US;  10, 22, 33, and 38.

That's right, even the most aggressive estimate of natural gas only gets us 38 more years with 4% yearly consumption growth.  But 20 - 30 years is a safer range to bet on.  That's hardly a forever amount.

Which brings us finally to why I strongly dislike dreamy renewable rah-rah stories; they undersell the enormity of the challenge and serve to put the fence-sitters back to sleep because it plays into their native desire to not be bothered in the first place.  

Look, if we want to replace thousands of million of BOE with renewables, and you want to promote that view, do us all a favor and just run the math.  How many wind turbines?  How much solar?  how long would that take?  How much energy would it require?  Anything else is just hand waving.

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Thanks Chris

Thats why I'm here

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Also

Not to be peevish, but what ever strides China may be making with wind and solar mean little to those of us who don't happen to live there.

John G.

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meanwhile...

http://www.bloomberg.com/news/articles/2015-01-27/carnival-explores-new-cruise-line-for-fast-growing-china-market

I'm imagining all the cruise ships floating around the globe if the projection of doubling the Chinese cruise customer base holds every year. It's 500,000 now.

Cruise line operators are rushing to China, considered the biggest growth market for the industry. Miami-based Carnival expects to run four ships carrying 500,000 passengers annually in the region this year, more than doubling capacity since 2013.

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See, that's the rub...

According to everything I've been reading over the last three years, on PP, Truthdig, other blogs and websites and in numerous books, there can be no more doublings in terms of massive economic growth. Sure, there will be doublings of bankruptcies, locations of civil or social unrest, and probably a doubling-down by the powers that be in an attempt to keep the ship afloat even after the iceberg hits...

..but no more doubling of "economic growth."  We have hit the limits to growth, and all we are doing now, to borrow from Daniel Quinn, is peddling harder and harder while the ground rushes up to greet us. The signs are all around us and increasing. 

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Reply to Chris

cmartenson wrote:
Alan - I share your passion for moving towards renewables, especially solar thermal

1. It is not so much my passion. It is more what is actually happening out there. I was slowly convinced of the things I am now saying, over and against the objections that I had, which were just like yours. I was steeped in the peak-oil/neo-malthusian milieu; started reading dieoff.com/hanson in 1999; belonged to ROE and ROE2 in the early 00's; etc. I was deeply into it, just like you. But then I began seeing more and more things inconsistent with that view. Eventually, I had to abandon it, more or less completely. It does not account well for what is actually happening in the world.

2. Solar thermal is rapidly being eclipsed by photovoltaics, at least for small installation/applications like water heating. This is a case of rapid technological developments, and collapse of PV prices, displacing what appeared to be a great low-tech way of doing things.

cmartenson wrote:
I am pretty much allergic now to those who promote renewables with lots of lofty and grabby assertions but who fail to perform the basic math necessary to make the case.

 "Fail to perform the basic math"? Au contraire! The basic math is quite clear: renewables are coming on like a mini-freight train, shortly to become a full-size freight train. The numbers are clear and undeniable.

cmartenson wrote:
It really does a disservice because it does not convert the skeptics, sounds great to the choir, and misleads the uneducated.

How does it mislead the uneducated?

cmartenson wrote:
So let's do the basic math, and back it up with facts. First, you may have missed it but the chart I provided on China's energy consumption included renewables

No, I did not miss it.

cmartenson wrote:
- it's that one pixel wide orange smear that only begins to appear on this chart in the last few years.

Indeed. And before it was one pixel wide, it was one tenth of a pixel wide. And before that, one one-hundredth of a pixel wide.

What counts for the future is trajectory, not current absolute numbers. Current absolute numbers are the RESULT; trajectory is as though (is a reflection of) CAUSE. Current absolute numbers tell us where we are now; trajectory tells us how we got to where we are, and where we are going.

Current absolute numbers, shorn of the critical context of trajectory, imply stasis, or unchangeability; they emphasize the STATE of things currently, rather than the PROCESS that is morphing the current state into some different future state. If we insist on stripping-away context from our numbers, we will get a distorted, and usually quite negative, impression of reality and the direction (or even existence!) of change.

Current absolute numbers are like a still photo; trajectory is like a movie. Which gives you a better view of reality?

At one time, a century ago, utilization of liquid petrofuels took up only one pixel on the chart; the absolute current numbers suggested that petro liquids were (and would remain) insignificant. But we all know what happened after that. As it turned out, those absolute numbers did not matter much. What mattered was the trajectory, which took liquid fuels to where they are today. The enormous advantages of petro liquids were just beginning to be exploited. Oil had a brilliant future.

Today, the trajectory is much different. Oil consumption growth is flattening. Over the last 10 years, it has dropped off to about 1% per year, rather than the nearly-2% per year growth of the previous 25: http://www.indexmundi.com/energy.aspx

That is a big change, and is now an established trajectory.

Coal consumption growth is also flattening, after a few decades of rapid increase. Trajectory.

Coal is not going to disappear, of course, for a very long time. Huge amounts of coal will still be burned in 2050. But "huge amounts" -- i.e. the absolute number, whatever it may then be -- is less important than the trend, the trajectory.

Meanwhile, renewables are growing at a phenomenal rate. Coming from such minute numbers to start, the change is not going to happen overnight (as I pointed out originally) -- same as it took oil many decades to go from one pixel to many pixels on the chart. As I said before (did you hear me?), this is epochal change that occurs over decades or even half-centuries, not months or years. Nevertheless, what matters, if we want to know what is going to happen (versus knowing what HAS happened), is trajectory. And the trajectory is now clear. Twenty or even ten years ago, that could not be said; but it can be said now, with confidence.

Further (an aside): the pronounced flattening of both oil and coal consumption growth over the last 10 years has happened apart from major competition from renewables; i.e. the absolute renewables numbers are too small (as you might point out, correctly) to have effected this change. The flattenings seem to be the result of progressively reduced energy intensivity of economies -- a subject about which much has been written. The idea is that, on account of numerous technical developments and efficiencies, similar or greater economic development can occur with the same or less energy input; i.e. we're doing more with less. They sometimes call this "decoupling" (of energy requirement from economic growth). I'm sure you would agree that this bodes very well. But combined with the onrushing arrival of renewables as a significant new energy source, the fossil energy cost of development (and in the case of the rich nations, just maintenance) will likely keep declining for a very long time, and perhaps faster than we might have dreamed possible just a few years ago. Change is funny like that.

cmartenson wrote:
as you say, renewables are increasing very fast.  On a percentage basis that's a fact.

Yes, that's a fact, and that fact is what counts, now that sufficient mass has been developed. By that I mean that, in the early days of renewables -- 1970s, 1980s, early 1990s -- there was insufficient development to make any clear statements about the future. The numbers were too miniscule. Renewables were still in the alpha- and beta-testing phase, you might say. Proof of concept was being constructed. But those days are now over. All the preliminary testing and low-level scale-up is done. Renewables are truly ready for prime time, and are indeed just now entering it. There is an ocean of evidence for this, including clear commitments of whole large (and small) nations, major institutional investor commitment, and much more.

Renewables are indeed "increasing very fast on a percentage basis", creating something like "the magic of compound interest": with the passage of each year, on a strong growth trajectory, the numbers not only move up, but move up exponentially faster. The current absolute numbers, presented in such a way as to imply stasis, are not wrong, of course, but they are misleading in terms of telling us anything useful about where we are going. I think you need to take another look at your own concern about "misleading the uneducated".

cmartenson wrote:
Between 2011 and 2013 China's installed wind capacity fully doubled from 50 Twhr of production to 100 Twhr in 2013....
  Converting from Twhr to barrels of oil equivalent or BOE (so we can understand and appreciate the above chart), we find that 100 Twhr = 61.3 million BOE. Note that 100 Twhr is the same thing as 100 billion kwhr (important because everything is usually quoted in kwhr and I'll do the same hereafter to keep everything consistent)
  With China's total energy demand running at 2,800 million BOE we find that wind power is (61.3) / (2,800) = 2.2% of the overall mix.  that explains the thin smear of orange at the top of the above chart.
  However, over the same period of time (2011 - 2013) coal use in China increased by 400 million tons per year which is equivalent to 83.5 million BOE, which converts to 136 billion kwhr. Note that 136 is larger than 100 (see bullet #1 above) which means that China grew its total coal consumption by an amount larger than its total installed wind capacity in 2013.

"400 million tons per year" is a very impressive and even scary number, until you consider the fact that annual coal consumption growth in China is down to under 3%, from about 9% in the 2000-2010 decade. That's a HUGE decline. Again, trajectory tells the important story, while the absolute (stasis-implying) numbers mislead us.

Regarding China's coal consumption, see here:

  http://cleantechnica.com/2014/08/26/chinas-coal-consumption-finally-decr...
  China's Coal Consumption Has Finally Decreased
  August 26th, 2014

Take a look:

In addition to illustrating China's flatlining coal consumption growth, this graph is also interesting insofar as it partially illustrates the "decoupling" that I mentioned; in this case, dramatic decoupling of GDP growth from coal consumption. This is GREAT news. And this has happened even BEFORE (or just as) renewables enter their huge growth era. Few things will give me more pleasure than watching development progressively (and eventually radically) decouple from fossil energy use.

cmartenson wrote:
By this math, the longer China keeps on this path the larger the gap between the installed coal and wind power bases.

The "math" that you refer to assumes that wind/renewables  development will simply STOP at current levels, or 100 Twhr. You're using numbers as though they represented static things, rather than dynamic processes. As you point out yourself, wind doubled between 2011 and 2013; i.e. wind power installation displays RADICAL dynamism, with no suggestion of a sudden freezing at 2013's 100 Twhr figure (your figure).

The reason that wind/renewables are growing as fast as they are (e.g. wind doubling in two years) is because there is in sum a compelling case for their development -- economic, environmental, and other. They are going to keep on doubling every 2-3 years for the indefinite future. That rate of growth will eventually decline, as the installed base goes from small to large to massive; that's a natural part of the process, too. But for now, for the next few decades, we're in for dramatic growth in this sector, for very good reasons.

Methinks that instead of "doing the math", you're presenting a few numbers as though they represented fixed things rather than dynamic processes.  Your "math" is like looking at a few individual frames of a motion picture.

cmartenson wrote:
This is where percentages can lead people astray, and it's an easy trap to fall into.  Hey look, the rate of coal use is falling, and wind's is exploding, wind must be winning!

Wind IS winning, as is solar, though it may take a couple decades for dramatic change of the pixel-width on the chart. That's cool. That's the way the world works. Saplings do not turn into 2-foot-thick trees in a year.

People can be lead astray in different ways. One way is by portraying current numbers as though they represented something monolithic and unchangeable.

cmartenson wrote:
How many more complete doublings would be required before wind could 100% replace coal?  How about a 50% replacement?

No one, anywhere, is talking about wind replacing coal 100%. So why bring it up? 50% replacement is somewhat closer to a conceivable reality, but is still a stretch.

It is not necessary for wind to replace 100% or 50% of coal. It IS necessary for renewables in sum (including but hardly limited to wind) to progressively, incrementally reduce coal requirements. Over a period of decades, it will go to double digits. Wind, solar, hydro, geothermal, tidal, and nuclear will grow, and fossil fuels will decline. Also, natural gas will grow a great deal for the next century or so, at least on the Eurasian continent, which has plenty of it.

cmartenson wrote:
How do we propose to deal with the intermittency issue?  It's good to have hospitals powered up even on days when the wind is not blowing.

Fossil fuels are still plentiful, Chris, and will continue to be used for many decades. Baseload can also be supplied by nuclear, natural gas, and hydro. Developments in battery and other technology will also be coming down the pike. Intermittency is hardly the deal-killer as it has been portrayed. It will in any case be solved.

cmartenson wrote:
It turns out the answer to these questions are all very much non-simple, non-easy sorts of answers.  This is a far more complex field than you've presented.

The big picture, in the abstract, is not that complicated. Individual aspects of it, and the actual working-out of all the specifics, over time, does get complicated. But we don't have to concern ourselves with all that, because we (you, Chris, and me, Alan, and most of the people reading these words) are not involved in the actual working-out. The people who ARE involved are in government, academia, industry, and other places, and they are quite capable of working it all out. There are no insurmountable technical or policy problems. Indeed, even if technological development were to suddenly grind to a halt, (that being a laughable proposition, but let's just imagine it for a moment), even existing technology is sufficient. Renewable energy technologies have sufficient economy and practicality; massive build-out over decades will be no more difficult than other things humans have done many times over the last century or so (like building the interstate highway system, or like building New York City, or like building Dubai). Renewables will be effective in progressively, incrementally reducing fossil fuel requirements, over decades. There is almost no way it can be stopped, short of nuclear holocaust. Even with no technical advances, renewables are capable of replacing most (though not all) of the fossil requirement, and that's good enough.

cmartenson wrote:
Finally, there is not a century of natural gas, you have that 'fact' badly wrong.  There's ~11 years of proved reserves in the US at current rates of consumption, but every single thing that we'd use gas for instead of coal would, of course, accelerate our consumption peeling decades off of the amount left.

Who said anything about the U.S.? When I said that natural gas was "plentiful" I was responding to your question about CHINA. Eurasia is swimming in natural gas, and plenty of parties will be happy to sell to China.

Further, I was talking about energy for GROWTH, which takes much more energy than maintenance. The U.S. is a mature nation and economy with vast established infrastructure. I agree with the people who critique "endless growth", when it comes to the already-developed countries. We in the OECD do NOT need to grow endlessly, or at least not fast. We need to grow a little bit to maintain and upgrade, as needed, but nothing like a developing country.

Developing countries need to grow, fast, and they need a huge amount of energy for that growth. That's why it is a good thing that there is so much natural gas in Eurasia. Along with renewables and nuclear, it will provide fuel for the needed growth in China (which still needs goodly growth, for a while) and India (for a good long while) and the rest of the continent. Along with fossil fuels, it will provide bridging fuel for the multi-decade transition to renewables in Eurasia, and to a lesser extent elsewhere. I'm talking about from now through approximately the end of this century.

Although the U.S. has much less natural gas, it still has quite a bit -- enough to play an important role in OUR transition to renewables. Keep in mind that the U.S. has a much lower growth requirement than nations in Eurasia. We've already done our bigtime growth and it need not (and ought not) be repeated. We don't need Eurasia's multi-quadrillions of cubic feet. In fact, there is so much waste built-in to our culture that we could contract our energy requirements drastically while still improving the actual quality of life here.

cmartenson wrote:
Which brings us finally to why I strongly dislike dreamy renewable rah-rah stories; they undersell the enormity of the challenge and serve to put the fence-sitters back to sleep because it plays into their native desire to not be bothered in the first place.

OK. So, now that we are all activated by knowledge of the enormity of the challenge, what are we to do? Seriously. What do you propose that we (anyone) do? Write articles disparaging the fabulous progress that has already been made, and the trajectory that very clearly tells us where things are going?

I for one am beginning to dislike the steamy anti-renewable nah-nah stories. They undersell the enormity of the efforts -- successful efforts -- that humans are now making to change course and build a different kind of world. The people who are on the forefront of this change are admirable, and I daresay more admirable than the nattering nay-sayers at the sidelines -- as I used to be, a few years ago.

cmartenson wrote:
Look, if we want to replace thousands of million of BOE with renewables, and you want to promote that view, do us all a favor and just run the math.  How many wind turbines?  How much solar?  how long would that take?  How much energy would it require?  Anything else is just hand waving.

The answers to your questions will be worked out as part of an ongoing process. It cannot be planned precisely in advance, as you seem to be requesting. Such questions are like asking, in the year 1915: "how many internal-combustion engines will we need?", and "how many billions of barrels of oil will be required?".  These would have been silly questions, at that  time, would you not agree? Such questions are like asking, of a newborn: "how many meals do you think he will eat?", "how many calories will he require?". The answer is: he will require as much as he requires. It will be worked out, over years, in the process of his development in this world. We can make some approximate guesses, but even those are not especially useful. It will be worked out, as a process.

Renewables have proven themselves to be highly cost-effective and economical, given realistic (i.e. accounting for all "externalities") methods of assessment. The reasons for continuing development/build-out of renewables at accelerating rates are compelling. PRECISELY how many wind turbines, or solar panels, or whatever, will be needed or built will depend on many factors that cannot be predicted. Who cares, really? The point is that renewables are coming on like gangbusters, for very good reasons, and that we need a whole hell of a lot of them to replace declining and dirty fossil fuels, and there is nothing standing in the way of their rapid deployment, and there are very powerful governmental and commercial forces encouraging their rapid deployment. Bottom line, there is nothing short of all-out nuclear war, or an asteroid hitting the earth, that will stop them until they've become a predominant portion of the energy resource mix.

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Renewable energy: Return on investment not economically vialble

I don't have Chris's vast knowledge on this subject. I'm a full time chiropractor for 30+ years, and that takes most of my time. I do have a B.S. in Geology, and I do as much reading, listening to interviews, and corresponding by email with some of the people who have been interviewed, or cited on this web site [and others] as possible. Like Chris I was steeped in the scientific method, and hopes and dreams of a renewable energy driven world don't match factual reality.

I can tell you no large-scale entity I know of has found renewable energy to be cost effective in terms of EROI...energy return on energy invested. Google tried to go all green and had to cut their losses, which were tens of millions if not hundreds of millions. http://www.reuters.com/article/2011/11/23/google-idUSN1E7AL1X520111123

I congratulate them for trying.

EROI is the main them for this website http://srsroccoreport.com/eroi-factor/  and it's author. I recommend it.

As for solar, solar panels require silver. There isn't enough above ground silver [out of the hands of silver investors] available to make enough solar panels to generate more than a few percent of the world's electricity needs. I've seen the math on this but it isn't at my fingertips. Suffice it to say if the silver mined, minus what is already consumed by industry and investors, was put into photovoltaics, we couldn't produce much more that is currently being produced. Why? There is no excess silver to put into solar panels unless the price goes up massively, inducing some investor selling.

A cost-effective substitute for silver in solar panels? I'm all ears.

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Ishmael

Time2help. Thank you for bringing up Ishmael!  Hands down it is the most important book I have ever read.  It opened my eyes when I was in my early 20's. The only problem was it didn't offer a way forward aside from returning to hunter gatherer living and try as I might I couldn't convince anyone else that was a viable option. :)  I grumpily went back to sleep and proceeded with "normal" life for a few years, but I was primed to receive the information I learned a few years later about peak oil and the trajectory of modern life which has led me to make a lot of changes in the way I live.  Without that early awakening, I think I would still be among the unworried masses. 

Is Daniel Quinn still around?  If so he would make a very profound guest for a future podcast here!  I have the upmost respect for the man.

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Daniel Quinn

Here is his contact information.  I'd second him as a great potential guest.

http://www.ishmael.org/Vision/Contact_us/form.cfm

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Addendum: philosophical issues

I wrote:
 

Quote:
What counts for the future is trajectory, not current absolute numbers. Current absolute numbers are the RESULT; trajectory is as though (is a reflection of) CAUSE. Current absolute numbers tell us where we are now; trajectory tells us how we got to where we are, and where we are going.
 Current absolute numbers, shorn of the critical context of trajectory, imply stasis, or unchangeability; they emphasize the STATE of things currently, rather than the PROCESS that is morphing the current state into some different future state. If we insist on stripping-away context from our numbers, we will get a distorted, and usually quite negative, impression of reality and the direction (or even existence!) of change.

This reminded me of underlying philosophical issues.

State vs. process; BEING vs. BECOMING.

It is nothing less than the transition of reality models,  from the (absolute, static) Newtonian/Cartesian one to the (relative, dynamic) Einsteinian one.

The item below illustrates. The second paragraph is beautiful; I could not have said it nearly as well:

"We still perceive and understand things on the basis of absolute, permanent and enduring entities [fixed, static stuff --alan2102] within a set spatio-temporal context. The reason for this is not hard to find. The Newtonian world is far easier to grasp and implement than the Einsteinian and it readily conforms to our ordinary rational and logical analysis of things. Moreover, our ordinary perception easily adapts to such analysis. The Einsteinian world, on the other hand, seems too abstract, relative and dynamic for the average mind to cope with it." [Exactly. Lots of people have a hard time with it. I am having a hard time with it myself.  I long for the good old days of Newtonian/Cartesian fixed reality. indecision  --alan2102]

SNIPPETS:

Quote:

 http://ccbs.ntu.edu.tw/FULLTEXT/JR-JOCP/inada3.htm
 The Challenge of Buddho-Taoist Metaphysics of Experience
 Kenneth K. Inada
 Journal of Chinese Philosophy 21 (1994)  P.24-47

"Plato argued cogently for the absolute nature of things, i.e., the nature of being over becoming. His arguments were quite persuasive. to say the least, since anyone is enthralled by the characteristics of permanence and absolutism in contrast to impermanence and relativism. So from the outset, a metaphysics based on the concept of being became the guide to all empirical, rational and logical understanding; at the same time, the concept of becoming or change was relegated to a secondary position because of its relative and dependent nature. Thus the bifurcation of nature, being and becoming or, more precisely, being over becoming, began early in the Western tradition and has continued to the present without arousing serious questions concerning its function and value. Along the way, thinkers were given free reign to concentrate on the permanent and enduring entities with which the empirico-rational modes of perception could function effectively. The results have been dramatic, especially in the scientific and related fields."

"Einsteinian physics opened the doors to a truly dynamic world but, ironically, the public was ill-prepared to accept and accommodate it. Indeed, our ordinary perception of things, both in the microscopic and macroscopic realms, is still anchored in a Newtonian world. We still perceive and understand things on the basis of absolute, permanent and enduring entities within a set spatio-temporal context. The reason for this is not hard to find. The Newtonian world is far easier to grasp and implement than the Einsteinian and it readily conforms to our ordinary rational and logical analysis of things. Moreover, our ordinary perception easily adapts to such analysis. The Einsteinian world, on the other hand, seems too abstract, relative and dynamic for the average mind to cope with it. Simply put, it does not blend with ordinary perception of things despite its universal appeal and acceptance by the scientific community. We are, in short, burdened by a historical lag in that a mode of perception steeped in substance-orientation refuses to completely harmonize with and adapt to the constantly changing conditions (process) which is the stuff of nature."

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Philosophy

Thanks for the philosophy lesson, but this is way off topic of the points Chris was making in his article.

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Thought experiments vs roadmaps

(...)

OK. So, now that we are all activated by knowledge of the enormity of the challenge, what are we to do? Seriously. What do you propose that we (anyone) do? Write articles disparaging the fabulous progress that has already been made, and the trajectory that very clearly tells us where things are going?

I for one am beginning to dislike the steamy anti-renewable nah-nah stories. They undersell the enormity of the efforts -- successful efforts -- that humans are now making to change course and build a different kind of world. The people who are on the forefront of this change are admirable, and I daresay more admirable than the nattering nay-sayers at the sidelines -- as I used to be, a few years ago.

The answers to your questions will be worked out as part of an ongoing process. It cannot be planned precisely in advance, as you seem to be requesting. Such questions are like asking, in the year 1915: "how many internal-combustion engines will we need?", and "how many billions of barrels of oil will be required?".  These would have been silly questions, at that  time, would you not agree? Such questions are like asking, of a newborn: "how many meals do you think he will eat?", "how many calories will he require?". The answer is: he will require as much as he requires. It will be worked out, over years, in the process of his development in this world. We can make some approximate guesses, but even those are not especially useful. It will be worked out, as a process.

(...)

Look Alan, it's really simple..it's just math...if you don't want to engage in math, that's fine, but everything else is just hand waving.  All you done is provide a bunch of thought experiment-type of 'information' and confused it with a legitimate roadmap.

Noting "trajectories" and the impossibility of predicting all future changes is merely sidestepping the issues.  Meanwhile real people will have to put up real money and expend real effort to try and bring you your techno-utopia.

And no, it's not helpful to naysay stuff, but that's not what we're dong here.  We're simply noting things like time, scale and cost.  These are are not issues that can be happy-thought away.

Here's a piece that came out just today in the MYTimes that pretty well captures everything I wanted to say here, so I'll just post it instead:

A Climate Hawk Separates Energy Thought Experiments from Road Maps

Jan 27, 2015

David Roberts, the progressive environmental blogger who coined the phrase “climate hawk,” has done the environmental community a great service with a Grist post stressing the difference between a vision of a climate-safe energy future and a strategy for making that vision a reality.

One of his core lines is:

[M]ost decarbonization scenarios are thought experiments, not practical roadmaps. But when they are reported to the public, that distinction is often lost.

Marking the difference is essential unless you want to give the public a false sense that it’ll be easy to satisfy the world’s energy needs without overheating the planet.

This is particularly true given the “super wicked” nature of this issue, which is complicated by competing societal concerns, embedded special interests, huge gaps between human energy needs and clean-energy menus and other impediments to swift change.

The piece, titled “We can solve climate change, but it won’t be cheap or easy,” is important in many ways. One is that he’s created an opening for constructive crosstalk between camps that too often seem to be at each others’ throats — progressive environmentalists and people associated with the innovation-focused Breakthrough Institute, founded by the “Death of Environmentalism” authors Michael Shellenberger and Ted Nordhaus.

He centers the piece on a recent paper — “A critical review of global decarbonization scenarios: what do they tell us about feasibility?” — by four authors including Jesse D. Jenkins, an energy policy analystlong associated with Breakthrough who’s currently pursuing his doctorate at the Massachusetts Institute of Technology. I’m glad Roberts sees value in varied approaches to energy and climate progress. (For the record, I’ve participated in Breakthrough meetings and hung out with Grist staff.)

But the prime value lies in Roberts’s simple reminder, amid floods of glossy optimistic rhetoric, that taking the climate-warming carbon out of a growing global energy menu is a challenge requiring far more than better messaging or political tactics. My guess is he’d agree with my notion that energy progress will only come with an odd combination of “urgency and patience.”

The piece starts with Roberts’s critique of those, including Paul Krugman of The Times and Joe Romm of the Center for American Progress, who embraced a finding in last year’s Intergovernmental Panel on Climate Change report that even a very aggressive global push to cut carbon dioxide emissions would trim a barely perceptible 0.06 percentage points per year from global economic growth.

As with all such analyses, fine print matters and just one panel caveat such enthusiasts didn’t mention was this:

Under the absence or limited availability of technologies, mitigation costs can increase substantially depending on the technology considered.

One of the technologies the scenarios took as necessary was rapid global adoption of systems that capture and store carbon dioxide from power plants — none of which have been tested at anything remotely close to a scale the atmosphere would notice. (See “Scaling up carbon dioxide capture and storage: From megatons to gigatons,” a 2009 paper by Howard J. Herzog at the Massachusetts Institute of Technology, for just one of many sobering takes on what’s needed.)

On Twitter and in a Grist comment, I cheered Roberts on. I’ve long said (and I’ve often been punished for saying) such thought experiments are valuable ways to delineate how something might get done, but that’s just a starting point. It’s up to citizens, communities and experts on energy and innovation policy, human behavior and politics to dig in on how it might get done.

Here are three more examples showing the tough realities hidden by breezy bullet points.

In 2011, I posted two pieces on California’s ambitious plan to cut greenhouse gas emissions 80 percent by 2050.

Is it a road map or thought experiment?

See what you think after reading what Nate Lewis, a solar energy researcher at the California Institute of Technology, said in one of the posts:

California could get roughly halfway to that goal in a perfect world – one without impediments such as higher costs, nimby fights and resistance from consumers and industries wedded to fossil fuels.

But even in that perfect world, Lewis says, citing the reviewed literature, fundamental leaps in basic energy sciences would be required to get all the way – and the nation and world are not investing at anywhere the level that would be required in the related sciences and in development and demonstration of promising technologies.

Looking beyond California to the nation, Lewis cited a National Academy of Sciences report he co-authored with 40 experts in energy technology on a path to getting more than half of the country’s electricity from renewable sources by mid-century:

“Everybody agreed that if we were going to get more than half of our electricity in our country from renewables by 2050 we were going to have to do things that we simply don’t know how to do today at all and fundamentally change the way we use, generate and consume energy [relevant section here]. That’s completely in agreement with the California report.

And it’s different than people who would tell you that we have all the technology we need and we just need the political will and let’s be done with it. That’s not what any technically knowledgeable panel concludes.”

It's just simply not true that renewables that generate electricity have done anything more than prove that when the sun is shining and the wind is blowing they can play a role.

Could they do more?  Yes, but not without a HUGE, gigantic, enormous amount of effort and cost.  And basic research and development.

This is why being realistic and honest is essential...anything that people can use to ignore the issue they will.  Your writings come off to me as cheerleading for the various thought experiments that have been run, but are not helpful towards developing the necessary mindset to begin to develop a reasonable  and workable roadmap.

I propose we begin with honest math, a realistic assessment of the enormity of the challenge, and then sell exactly what needs to be done.

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Reply to DC; EROI

DisappearingCulture wrote:
  I can tell you no large-scale entity I know of has found renewable energy to be cost effective in terms of EROI...energy return on energy invested.

Hi, DC!

Before EROI,  a note on silver: yes, exploding PV production will eventually drive up the price of silver, and the high prices of silver will persuade many to sell. But that is only the intermediate-term fix. The high prices of silver will stimulate the already-active (and partially successful) search for silver replacements. Actual industrial/volume instantiation of such replacements will itself be a drawn-out process, running into years and decades. But it will happen. Keep in mind that it has been the low price of silver that kept the lid on development of replacements. Why bother replacing it when it is so cheap?

And now, EROI: glad you brought it up! It is one of the most exciting aspects of renewables.

One of the great things about renewables is the way in which EROI for them is already high, and climbing, and will continue to climb, while the EROI of fossil fuels (which was high a long time ago) is on the wane and headed for the crapper (and that is not even counting the massive negative externalities that FFs generate!).

Most of the EROI-related anti-renewables arguments are based on badly dated information, like from the 90s and early 00s. Jay Hanson used to be fond of quoting this stuff, and it had me fooled for a long time. But things have changed since then. A LOT. For me, the conversion took about 8 years, as I was forced by compelling new info to let go of all my old anti-renewables arguments, one at a time.

Hats off to poster "SecularAnimist" on realclimate.org's forum for providing me with many excellent current resources, (better than the ones I had accumulated before), including some of the items below.

Here is SecularAnimist's take in a few words:
 "In short, the plummeting cost and skyrocketing efficiency of both wind and solar technologies have proved the peak oil theorists like Richard Heinberg wrong. The energy returned over the operating lifetime of today's solar panels and wind turbines is vastly greater than the energy invested in producing them. Moreover, unlike fossil fuels whose EROI necessarily gets worse over time, as the lowest-cost, highest-quality supplies are exhausted, the EROI of wind and solar gets better over time because the energy sources themselves are both free and inexhaustible, so the EROI is purely a function of the rapidly improving technology."

Further, as Chris Dudley points out below, renewables EROI  also leaps upward over time because the initial energy investment does not have to be repeated; it takes only modest maintenance energy to keep the show running; e.g.: "for the silicon used in Spain, the energy invested in purification stays invested as minor future energy expenditures are put into recycling. Over time, the initial investment divides and energy return similar to infinity."

This is similar to the point I made initially (my first post in this thread) about how the build-out of physical economy and infrastructure is largely a one-off thing: after you've done it once, you don't have to re-do it except in tiny increments over centuries. The initial investment is large, but it pays off essentially forever. (Well, not quite, but you get the idea.) That is most certainly NOT true of fossil fuel development. Fossil fuels are themselves a one-off thing but in the opposite way: once they're gone, they're gone forever, and the cost of extracting them ascends progressively, causing EROI to fall progressively. Renewables, fortunately, reverse this.

Renewables EROI skepticism is often based on the same kinds of static absolute current numbers-based thinking that I critiqued above. If we resolutely look at only our static snap-shots, ignoring the dynamic movie-like nature of things -- the way in which things develop over time (like for example NOT having to re-create energy infrastructure from scratch, or NOT having to re-purify silicon from scratch) -- then the EROI of renewables might look poor. But why would we want to do that? Reality-based analysis is better.

-------------------------------------------------------------

RESOURCES:

... and I should point out that even some of these are rooted in the static view; e.g. the very first item, which looks at a snap-shot type of EROI, not accounting for the (dramatic) advantages that accrue to renewables installation over years and decades. Anyway, here goes...

 http://www.sciencedirect.com/science/article/pii/S0301421512002133
 The energy return on energy investment (EROI) of photovoltaics:
 Methodology and comparisons with fossil fuel life cycles
 Marco Raugei, Pere Fullana-i-Palmer, Vasilis Fthenakis
 Energy Policy, Volume 45, June 2012
 Abstract:
  A high energy return on energy investment (EROI) of an energy production process is crucial to its long-term viability. The EROI of conventional thermal electricity from fossil fuels has been viewed as being much higher than those of renewable energy life-cycles, and specifically of photovoltaics (PVs). We show that this is largely a misconception fostered by the use of outdated data and, often, a lack of consistency among calculation methods. We hereby present a thorough review of the methodology, discuss methodological variations and present updated EROI values for a range of modern PV systems, in comparison to conventional fossil-fuel based electricity life-cycles.
 Highlights
  * We perform a review of the EROI methodology.
  * We provide new calculations for PV compared to oil- and coal-based energy systems.
  * If compared consistently, PV sits squarely in the same range of EROI as conventional fossil fuel life cycles.

----------------------

 http://www.sciencedirect.com/science/article/pii/S096014810900055X
 Meta-analysis of net energy return for wind power systems
 Ida Kubiszewski, Cutler J. Cleveland, Peter K. Endres
 Renewable Energy, Volume 35, Issue 1, January 2010
 Abstract:
 This analysis reviews and synthesizes the literature on the net energy return for electric power generation by wind turbines. Energy return on investment (EROI) is the ratio of energy delivered to energy costs. We examine 119 wind turbines from 50 different analyses, ranging in publication date from 1977 to 2007. We extend on previous work by including additional and more recent analyses, distinguishing between important assumptions about system boundaries and methodological approaches, and viewing the EROI as function of power rating. Our survey shows an average EROI for all studies (operational and conceptual) of 25.2 (n = 114; std. dev = 22.3). The average EROI for just the operational studies is 19.8 (n = 60; std. dev = 13.7). This places wind in a favorable position relative to fossil fuels, nuclear, and solar power generation technologies in terms of EROI.

----------------------

 http://emp.lbl.gov/sites/all/files/wind-energy-costs-2-2012_0.pdf
 [February 2012 report from the National Renewable Energy
 Laboratory:] "Recent declines in turbine prices & improved technology have reduced the estimated LCOE [levelized cost of energy] of wind; LCOE for projects being planned today in fixed resource areas is estimated to be at an all-time low ... the LCOE for 2012-2013 projects is estimated to be as much as ~24% and ~39% lower than the previous low in 2002-2003..."

----------------------

also:

 http://withouthotair.blogspot.com.au/2012/03/tedx-talk-people-power-area.html
 http://www.inference.phy.cam.ac.uk/withouthotair/sewthacontents.shtml
 [David McKay on renewable energy]

 http://www.seia.org/research-resources/solar-market-insight-2013-q3
 http://www.seia.org/news/new-report-us-solar-market-grows-41-has-record-year-2013
 [fabulous solar growth]

 http://rameznaam.com/2014/09/29/the-renewable-energy-revolution/
 The Renewable Energy Revolution
 Posted on September 29, 2014 by Ramez Naam    

 http://rameznaam.com/2014/10/05/solar-wind-plunging-below-fossil-fuel-prices/
 Solar and Wind Plunging Below Fossil Fuel Prices
 Posted on October 5, 2014 by Ramez Naam

 http://reneweconomy.com.au/2014/citigroup-says-the-age-of-renewables-has-begun-69852
 Citigroup says the `Age of Renewables' has begun
 By Giles Parkinson on 27 March 2014

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ALSO -- and this is really funny: the high (and growing, over time) EROI of renewables has attracted NEGATIVE attention amongst some of the climate-aware. Why? Because with an abundance of cheap, high-EROI energy, it will become possible to extract ever more fossil fuels (which would otherwise have been uneconomic), and burn them, thus increasing the CO2 burden. And why would we do that? Well, because LIQUIDS are still very attractive in many ways, not least the fact that there exists a vast installed base of liquid-requiring technology. If this position holds water (and I have not reached a conclusion on that), it would argue for slower development of renewables, in concert with replacement of existing liquid-burning devices, rather than fast development that might precipitate an orgy of fossil extraction and perception of super-abundance, to our detriment. It is an interesting idea. Needs to be thought-out and debated.

Vis: "If the TOD mindset that only recognizes fossil fuels as having viable EROEI were correct, we'd grind to a halt before releasing all available fossil carbon. We might avoid the truly crazy scenarios that Jim Hansen has explored. But, renewable energy makes those scenarios plausible."

The bottom line, in any case, is that EROI is not a problem in the sense that it is commonly invoked as a problem. Renewables have plenty of it.

Here's a couple of sample posts:

 http://www.realclimate.org/index.php/archives/2014/03/unforced-variations-mar-2014/comment-page-12
 Chris Dudley says:    
 16 Apr 2014 at 10:57 AM
 Jim (#613),
 I guess the Pacific Intertie turns out to be a good example to show you why our EROEI glory days are just beginning. So, lets take oil to start. Oil started out nice, go out and shoot a gopher and you end up with a gusher and a mansion in Beverly Hills. But too much of a good thing caused a market distortion through the formation of an international cartel, and now artificially high prices are introducing very energy intensive oil into the supply chain. By the time all the tar sand and oil shale is used up, we'll see an overall EROEI for oil around 3 or so. A finite resource can look good to start, but dependence and desperation can make it a dog in the end.
 The Pacific Intertie, on the other hand, supplies LA with renewable energy from Washington State. That supply is not finite. And, while it may be needful to repair a pylon from time to time, the initial energy investment in the Pacific Intertie divides a number similar to infinity. Similarly, for the silicon used in Spain, the energy invested in purification stays invested as minor future energy expenditures are put into recycling. Over time, the initial investment divides and energy return similar to infinity. Reconditioning a wind turbine takes little energy compared to making it initially, but over time, that is the only important energy investment because it is the only one that scales with ongoing return.
 Renewables thus far exceed the EROEI of any finite resource.
 Notice also that this is very very dangerous for climate. That EROEI similar to infinity that renewables possess makes cooking oil out of oil shale formations a completely reasonable thing to undertake. It is an energy transformation that would produce liquid fuels at a lower energy cost than, for example, the Navy's new fuel-from-seawater technology. If the TOD mindset that only recognizes fossil fuels as having viable EROEI were correct, we'd grind to a halt before releasing all available fossil carbon. We might avoid the truly crazy scenarios that Jim Hansen has explored. But, renewable energy makes those scenarios plausible.
 Now, you will notice that EROEI has become a slippery number in a new way now. You might want to put up a fence saying we'll only consider energy returned to the generation that made the initial investment. And, that might be a useful thing to do when considering the likelihood that an investment will be made. That consideration suggests that the utility of an EROEI calculation depends on context and perhaps various kinds of fences should be standardized to make calculations for different applications. Hall's contribution then would be exploring the territory over which fences might be erected rather than producing EROEI estimates that have practical utility.

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 http://www.realclimate.org/index.php/archives/2014/04/unforced-varaitions-apr-2014/comment-page-5
 Chris Dudley says:    
 27 Apr 2014 at 4:12 PM
 Tony (#212),
 Yes, I was looking at payback time for a modern low cost solar cell, First Solar-type* or the like. The balance of system energy investment is probably minimal in this kind of application which is just producing heat in a resistive load. Cells can be placed on a convenient slope and wired in series until you get enough DC voltage to get the current to the well bottom. Nothing fancy for inverters, mounts, transmission etc.
 For First Solar, just the cell, mounting, cabling and recycling leaving out the inverter has an energy payback time of about 0.65 years so the EROEI would be about 38. http://www.firstsolar.com/en/technologies-and-capabilities/pv-modules/fi....
 The article you read probably looked at silicon technology from a few years back. Things are changing rapidly in this area.
 You are correct that complete climate catastrophe comes within reach with the advent of high quality renewable power. Unless we regulate emissions around the world, we could unlock huge amounts of fossil carbon, far beyond our current resource estimates. In situ gasification of very narrow coal seams becomes easy, for example.
 *First Solar provides a convenient example because their numbers are checked by the National Renewable Energy Laboratory so you know they are not BS. It is possible they would refuse to let their panels be used for oil shale processing.

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