Don Stewart on January 8, 2022 at 6:37 pm said:
Tim Garrett, Steve Keen, and Grasselii Article
When I posted the link to the Preprint earlier, I thought people would read it if they are interested. But you do have to click through to the full article. So here is the link to the full article:
One conceptual highlight: “energy is required not just to sustain that which we believe available to be sold, but also the unspoken utility of that which has previously been produced. Civilization was not built in a day.” This is reminiscent of the Howard Odum argument that a college professor with chalk and a blackboard is a highly energy intensive occupation.
And here is the full conclusion:
“We have identified a nearly constant relationship between world historically cumulative inflation-adjusted economic production and current energy demands that has held for the past half-century, a period during which resource consumptive demands nearly tripled. Whatever its explanation, its persistence would appear to place substantial bounds on humanity’s future interactions with its environment. For one, it implies that present sustenance cannot be decoupled from past growth, implying a much greater role for inertia than has been broadly assumed, for example, in the integrated assessment models used to evaluate the coupling between humanity and climate (Nordhaus, 2017). Even if world GDP growth falls to zero from its recent levels close to 3% per year, long-term decadal-scale resource demands and waste production would continue. More worryingly, the result suggests that it is only by way of collapse of the previous growth that led to the wealth we enjoy today, effectively by shrinking Lotka’s wheel, will our resource demands and waste production decline. Eq. 1 offers no direct mathematical approach for such an event to occur, except perhaps through hyper-inflation, as this would lead to high values of the GDP deflator that in economic accounting yield values of the inflation-adjusted GDP much lower than the nominal GDP. Historically, hyper-inflation has been associated with periods of societal contraction (Zhang et al., 2007) suggesting a possible link to decay.
On the topic of climate policy, a constant value of w implies that economic production can be decoupled from carbon dioxide emissions, but only provided a rapid switch to renewables or nuclear energy. All newly added energy production would need to be emissions free, which based on recent consumption growth rates works out to about 1 Gigawatt per day. Alternatively, or concurrently, some means would need to be devised for decoupling W from E by increasing the value of w. Given the value of w has varied little while society has changed tremendously over the last 50 years, it is difficult to conceive how this would be managed. That said, adjusting w could be seen as new target for mitigating future climate damages.”
I felt it was a poor paper badly written and badly argued, to call it speculative at best is charitable in my view.
45 a factor of 7.9. The ratio y = Y /E, sometimes termed the energy productivity, has trended steadily upward. Defining growth
rates in quantity X as RX = (1/X)dX/dt = dlnX/dt, a least-squares fit to the data gives Ry = 1.00% per year. Meanwhile,
the ratio k = K/E grew at rate Rk = 1.96% per year, nearly twice as fast as y, or a doubling time of 35 years. The economy
appears to be becoming rapidly less energy-intensive, suggesting that technological innovation is enabling more to be done
with less (Sorrell, 2014).
The Sorrell Paper Quoted in para 45 is this one I think, which is actually in a more coherent structure.
Sorrel has published a lot on Jevons Paradox, at footnote 35 for the link above one finds Jevons’ Paradox revisited: The evidence for backfire from improved energy efficiency.
To think through the implications It is I think it is helpful to look at embedded energy in Primary secondary and final consumption products.
Don Stewart on January 11, 2022 at 8:53 am said:
The apparent difference between your assessment of the probability that humans can select managed DeGrowth and Art Berman’s opinion may turn on the phrase “Dissipative Structure”. A hurricane is a dissipative structure with no common sense…it just follows certain physical laws rather blindly. Should we characterize humans as belonging to the same class as hurricanes?
A lot of climate scientists have become pretty despondent on the subject, as evidenced by the current movie Don’t Look Up. However, there is an opposing viewpoint. Here is a book jacket blurb about a textbook written by a distinguished British scientist:
“Dance to the Tune of Life: Biological Relativity 1st Edition
by Denis Noble
In this thought-provoking book, Denis Noble formulates the theory of biological relativity, emphasising that living organisms operate at multiple levels of complexity and must therefore be analysed from a multi-scale, relativistic perspective. Noble explains that all biological processes operate by means of molecular, cellular and organismal networks. The interactive nature of these fundamental processes is at the core of biological relativity and, as such, challenges simplified molecular reductionism. Noble shows that such an integrative view emerges as the necessary consequence of the rigorous application of mathematics to biology. Drawing on his pioneering work in the mathematical physics of biology, he shows that what emerges is a deeply humane picture of the role of the organism in CONSTRAINING ITS CHEMISTRY, including its genes,TO SERVE THE ORGANISM AS A WHOLE, especially in the interaction with its social environment. This humanistic, holistic approach challenges the common gene-centred view held by many in modern biology and culture. ”
If we adopt Noble’s viewpoint, we can be more optiimistic about human prospects than reductionist approaches such as the Maximum Power Principle, or statements that human purpose is to turn energy into children, or that humans are merely Dissipative Structures, or that we have only Selfish Genes. I guess each of us have to look at the evidence we see to decide whether society as a whole is behaving reductionistically or with the sort of relativistic perspective that Noble’s model presents. One of Rachel Donald’s interviewees told her that the more years an Economist spends in school, the more reductionist they become (I think it was Steve Keen).
You may remember the children who were subjected to the Oreo Cookie experiment. The children were left in a room alone with a cookie. They were told that if they waited 10 minutes without eating the cookie, they would get 2 cookies instead of 1. The hidden camera captures the intense process as the kids struggle with themselves. Some ate the 1 cookie and some waited and got 2. Later life follow up showed that the patient children were more successful in life. Perhaps God recollected that amusing experiment and decided to play it out with humanity as a group.
When discovering the structure of DNA, Francis Crick famously announced to his drinking companions in a Cambridge tavern that he had discovered the ‘secret of life’. The director of
his Institute, Max Perutz, was rather more careful than Crick when he
said that DNA was the ‘score of life’. That is more correct since a musical
score does nothing until it is played. DNA does nothing until activated
to do so. pp.35 “Dance to the Tune of Life: Biological Relativity 1st Edition
by Denis Noble
Regarding Garrets work and the paper in review with Steve Keen, I think it is reductive and also submits to a FInite type of analysis which does not seem to accommodate the dynamics in potentials available regarding the rate of flow of energy into and through a system and the responsiveness of the system to feedback.
The idea of a Musical Score, as opposed to a fixed recipe in Denis Noble book, is I think a good conceptual comparison of two approaches to the same set of Data , of course there are many potentials between the two categories of approach.
Douthwaite The Ecology of Money (Schumacher Briefing, 4) https://az.1lib.to/book/896040/105bf6
Chapter 4: One Country, Four Currencies
“Now we’ve surveyed the various types of money system, we come to the exciting bit – specifying
the integrated multi-currency system of the future. We have seen that three groups (commercial
institutions, governments and users) can create money. Very little can be said in favour of
allowing the commercial creation of money to continue. Instead, money should be created by
non-profit-seeking organisations representing the people using it. In the case of a democratic
country, this would obviously include a national or regional government working on behalf of its
At least four types of money are needed. One is an international currency, playing the role taken
by gold before the collapse of the gold exchange standard. The second is a national or regional
(sub-national) currency that would relate to the international currency in some way. Thirdly, we
would need a plethora of currencies which, like LETS, the WIR and the commodity-based
currencies, could be created at will by their users to mobilise resources left untapped by national
or regional systems. Many of these user currencies would confine their activities to particular
geographic areas, but some would link non-spatially-based communities of interest. And fourth,
as our current money’s store of value function can so easily conflict with its use as a means of
exchange, special currencies are needed for people wishing to see their savings hold their value
while still keeping them in a fairly liquid form.”
Douthwaites briefing has a foreward by Beranrd Leitaer.
“Do I agree with all the ideas that are presented here? Even Douthwaite admits that he doesn’t
“expect everyone to agree with the conclusions he has reached”. For instance, although I agree
with him on the importance of linking monetary issues to energy sustainability, I question the
viability of the means he proposes. (Why not include his “Energy-Backed Currency Units”
(ebcu) as part of a basket of commodities and services backing the currency – rather than being
the exclusive backing of currency?”
Leitaers TERRA is easily sourced on line .
Back to Nobels biological Theme The work of Martin Nowak as demonstrated in David Malones excellent series why are we here speaks to the idea of a measure of some cooperation and some competition.
MN: Yeah, let us start the game. And we see, yes, these defectors, they are spreading, you know. So the colours that we are observing here are: red are defectors and blue are co-operators, and yellow and green are changing sides.
So yellow is now a new defector: it was a co-operator before. And green is a new co-operator: it was a defector before. We see the pattern is spreading. A kind of symmetry is being maintained here because they are deterministic of the rules, and the initial symmetry is never broken. But the amazing thing is these co-operators, they are persistent. They just refuse to get wiped out and they survive in those clusters. And if you watch very carefully, you see the clusters, they are actually growing until they collide with other clusters, and then they’re shrinking, and then they grow.
David: But they never go out of business.
MN: But they never get out of business. And the amazing thing is the average abundance of co-operators in this pattern is very close to 12log 2-8.
David: What does that mean?
Ard: It’s close to constant.
MN: It converges to a constant which is approximately 31%, and this is a mathematical curiosity.
Ard: Natural selection would say the co-operators would get wiped out, because they are paying a cost to help their competitors. And yet it’s not happening. So why?
My own focus is actually looking at energy supply problems and what looks like a pretty shoddy effort to address future world energy demands. Screwing up the energy needs of the world economy will kill many more people than even a deliberately sketchy vaccine. If there is some sort of population control agenda i think the delivery mechanism will be through increasing energy poverty. Monitoring CO2 footprints is very close to rationing energy to bear survival levels, as the energy crunch seems to be playing out with most popular critical thinking pointed at the vaccines, my own instincts are suspecting that the vaccines are serving a usefull distraction from what amount to genocidal energy policy built around the global warming religion.
https://notthegrubstreetjournal.com/2022/01/10/peak-prometheus-noting-to-see-here-dont-look-up-bruce-charlton-distracted-obiedience-its-got-electrolytes/. I have been doing a fair bit of research on the energy markets as I am convinced they are the best idicator of policy constraints for monetary and fiscal policy. Obviously that feeds back into the real estate market quite apart from the more well known dynamics.
I have been getting my head further around The Energy Market and how it effects the money supply
I think the priority variables are
1. Electricity Base Load production, Coal and Natural Gas, and LPG products?
2. Crude Oil Production and Refinery capacities, Volumes of production are more important than the price per barrel
3. Swing Production from Shale or Capped and ready to go existing discoveries, Very important to who has upper hand
on Marginal pricing on swing production, Texas Rail Road, OPEC, US Shale production?
4. Gas Production and Coal production are probably equal with 3 or interchangeable with 3.
5. Venezuelan and Iranian supply disruption through Sanctions is a political bottleneck to an otherwise trivial supply problem
in the Oil Market.
6. Geo-Political and Green New Deal political economy choices vis Gas Pipe Lines are again self inflicted pwn goals?
7. Money Velocity and Money Supply related to energy use growth are being severely impacted by levels of COnsumer, Corporate and Sovereign debt.
The problems in Political Economy as it stands presently and the question of future Political Economy based upon future Energy realities are I think helpfully separated which is something Prof. David MacKay is very successful with, in his presentation of the question.
The Problems are only weakly related with respect to future solutions and breaking the process into 3 parts is useful rather than lumping them all together. It is clear that the existing Form of Market economy and political economy is not able to solve the problem at stage 3 ( I.E Post 2050 post-Oil Economy)
Stage 1 requires a reform of the existing paradigm which involves facing up to the broken debt-based money system. Pension provision, the sovereign debt crisis and Public debt crisis are all addressable and will see improvements even within the deteriorating Cost of energy inputs as a share of output. We could call this stage lets fix what we know is not working.
Stage 2 covers the Post Financialised ( Big Bang Experiment) period to the oil running out in 2050.
This requires a much more long-term investment horizon and complicating the energy mix by overstating the ”Climate Change question** seems to be counterproductive, again I like the way Prof David Mackay dealt with the question including stating the necessities of **Clean Coal and Nuclear”. In this stage, we will be implementing ideas previously barred due to the denial inherent in clinging to a failing system.
Stage 3 Post 2050, This part is much easier than Stage 2 and stage 1, in my opinion, the myth-busting and levelling out inherent in solving the political problems at stage 1 and the challenge to vested interests in stage 2 are by far and away the largest obstacles to getting down to Brass tacks in my opinion.
rogerglewison March 8, 2018 at 8:05 am said:
Two helpful annual reports from Lazards on Levelised cost of electricity. Very informative.
Click to access levelized-cost-of-energy-v100.pdf
Click to access lazards-levelized-cost-of-storage-analysis-10.pdf
Also this is a very interesting Wikipedia article on OTEC ( Ocean Thermal Energy Conversion.
Just by way of explanation by Profession I am a Chartered Surveyor and Valuer. I began my Career at Shell UK Limited where I was involved in the Tax Assesment of the St Fergus Gas Terminal in Peterhead, To Tax large oil industry plant and machinery open market valuations of Property Value based taxes like Property Rates do not exist and to calculate a property value for taxation purposes a Valuation Technique called the contractors principle of Valuation is employed.
The Contractors Principle of Valuation is a residual method of valuation which adds up all the input costs and then applies a discount rate to generate an annual economic rent ( Net Present Value )
which can then be used to calculate the rating assessment. At shell I did hundreds of these types of Valuations and the Largest such valuation was for the St Fergus Gas Terminal.
Concepts such as Embodied energy also feed nicely back into measures of Levelized costs of electricity. Pulling these concepts of energy value as opposed to financial value into the equations should hopefully result in seeing what the problem we are trying to solve is? DO we want to save Society or the financial system as it currently operates?
Discount rates based upon the cost of Capital are pretty subjective as you will know Tim but it seems to me that EROIE measures Levelised costs of Electricity production and so forth and a residual valuation approach can yield a good method by which to assess the Economic potential for future prosperity based upon access to energy.
Energy and Capital are very different things.
The best description of this dichotomy I have encountered is this from Carol Quigley in Tragedy and Hope,
”Thus, clearly, money and goods are not the same thing but are, on the contrary,
exactly opposite things. Most confusion in economic thinking arises from a failure to
recognize this fact. Goods are wealth which you have, while money is a claim on wealth which you do not have. Thus goods are an asset; money is a debt. If goods are wealth; money is not wealth, or negative wealth, or even anti-wealth. They always behave in opposite ways, just as they usually move in opposite directions. If the value of one goes up, the value of the other goes down, and in the same proportion.”
Quigley Tragedy and hope.
Energy and Money are different.
More broadly, economists are concerned that if oil prices stay high this year, they could slow the already fragile global economic recovery. As a general rule of thumb, every $10 increase in the price of a barrel of oil reduces the growth of the gross domestic product by half a percentage point within two years.
According to the OECD Economics Department and the International Monetary Fund Research Department, a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second years of higher prices.
Oil prices still matter to the health of the world economy. Higher oil prices since
1999 – partly the result of OPEC supply-management policies – contributed to the
global economic downturn in 2000-2001 and are dampening the current cyclical
upturn: world GDP growth may have been at least half a percentage point higher in
the last two or three years had prices remained at mid-2001 levels. Fears of OPEC
supply cuts, political tensions in Venezuela and tight stocks have driven up
international crude oil and product prices even further in recent weeks.
By March 2004, crude prices were well over $10 per barrel higher than three years before.
Current market conditions are more unstable than normal, in part because of
geopolitical uncertainties and because tight product markets – notably for gasoline
in the United States – are reinforcing upward pressures on crude prices. Higher
prices are contributing to stubbornly high levels of unemployment and exacerbating
budget-deficit problems in many OECD and other oil-importing countries.
The vulnerability of oil-importing countries to higher oil prices varies markedly
depending on the degree to which they are net importers and the oil intensity of
According to the results of a quantitative exercise carried out by the
IEA in collaboration with the OECD Economics Department and with the assistance
of the International Monetary Fund Research Department, a sustained $10 per
barrel increase in oil prices from $25 to $35 would result in the OECD as a whole
losing 0.4% of GDP in the first and second years of higher prices. Inflation would
rise by half a percentage point and unemployment would also increase. The OECD
imported more than half its oil needs in 2003 at a cost of over $260 billion – 20%
more than in 2001.
Euro-zone countries, which are highly dependent on oil imports,
would suffer most in the short term, their GDP dropping by 0.5% and inflation rising
by 0.5% in 2004. The United States would suffer the least, with GDP falling by 0.3%,
largely because indigenous production meets a bigger share of its oil needs.
Japan’s GDP would fall 0.4%, with its relatively low oil intensity compensating to
some extent for its almost total dependence on imported oil. In all OECD regions,
these losses start to diminish in the following three years as global trade in non-oil
goods and services recovers. This analysis assumes constant exchange rates.
The adverse economic impact of higher oil prices on oil-importing developing
countries is generally even more severe than for OECD countries. This is because
their economies are more dependent on imported oil and more energy-intensive,
and because energy is used less efficiently. On average, oil-importing developing
countries use more than twice as much oil to produce a unit of economic output as
do OECD countries.
Developing countries are also less able to weather the financial
turmoil wrought by higher oil-import costs. India spent $15 billion, equivalent to 3%
of its GDP, on oil imports in 2003. This is 16% higher than its 2001 oil-import bill. It
is estimated that the loss of GDP averages 0.8% in Asia and 1.6% in very poor
highly indebted countries in the year following a $10 oil-price increase. The loss of
GDP in the Sub-Saharan African countries would be more than 3%.
World GDP would be at least half of one percent lower – equivalent to $255 billion
– in the year following a $10 oil price increase. This is because the economic
stimulus provided by higher oil-export earnings in OPEC and other exporting
countries would be more than outweighed by the depressive effect of higher prices
on economic activity in the importing countries. The transfer of income from oil
importers to oil exporters in the year following the price increase would alone
amount to roughly $150 billion.
A loss of business and consumer confidence,inappropriate policy responses and higher gas prices would amplify these economic effects in the medium term. For as long as oil prices remain high and unstable, the economic prosperity of oil-importing countries – especially the poorest developing countries – will remain at risk.
The impact of higher oil prices on economic growth in OPEC countries would
depend on a variety of factors, particularly how the windfall revenues are spent. In
the long term, however, OPEC oil revenues and GDP are likely to be lower, as
higher prices would not compensate fully for lower production. In the IEA’s recent
World Energy Investment Outlook, cumulative OPEC revenues are $400 billion lower
over the period 2001-2030 under a Restricted Middle East Investment Scenario, in
which policies to limit the growth in production in that region lead to on average
20% higher prices, compared to the Reference Scenario.
17. (C) The relationship between DOE, State and the MOPMR
is long-standing and very solid. However, the Saudis have
been frustrated with recently-announced U.S. programs and
public statements designed to accelerate research into
alternative fuels. Mufti countered by emphasizing that
consumers won’t be weaned off of oil unless other options are
price competitive, and appraising that USG policy won’t alter
market fundamentals. The technocrats who run Saudi Aramco
understand there is room for biofuels and other alternatives
in a growing U.S. and world energy portfolio. Nonetheless,
the political leadership within MOPMR kicks back against the
USG saying so in too public a fashion.
18. (U) DAS Hegburg has cleared this message.
Peak Oil Demand or Peak Oil Supply?
Either peak oil scenario presents grave challenges for the Gulf region and
OPEC, whose countries rely on oil sales for as much as 90 percent of their
Al-Sabban, who also serves as the chief economic adviser to Saudi Oil
Minister Ali Naimi, said an oil demand peak would be “very serious” for
Saudi has about 264 billion barrels of crude reserves and currently
produces about 8 million barrels per day out of its overall output
capacity of around 12 million barrels per day.
The kingdom, widely seen as the de facto leader of the 12-member OPEC, has
embraced an ambitious expenditure program aimed not only at further
developing its oil base but also expanding and diversifying its economic
Its expansionary policies came even as other nations were tightening purse
strings in response to the world’s worst financial crisis in over six
decades. The outlays included billions of dollars for a new research
university that opened last year, as well as major ventures such as the
construction of new economic cities and other infrastructure.
Oil’s pre-recession price boom also helped pad Saudi Arabia’s foreign
reserves, now in excess of $400 billion, and have helped the government
weather the worst of the global crisis.
In this conversation with H. Douglas Lightfoot you will learn:
In this conversation with H. Douglas Lightfoot you will learn:
- Why energy efficiency is a two-edged sword
- Why tree-planting is not a silver bullet
- Why it’s so hard to store large amounts of electricity
- What are some of the lesser known forms of renewable energy
- The difference between volcanic and household geothermal energy
- Why some wind-power projects are being mothballed
- Who really killed the electric car
- What using ethanol will do to your gas mileage
- And why we can’t simply legislate less energy use
President Trumps Remarks to the New York Economics Club Yesterday. A look back to his pre-election Speech at the same venue. “It’s The Money Power Stupid, The Gnomes of Zurich, it was ever thus! “Ceterum censeo Carthaginem esse delendam, nihil sub sole novum”. #4Pamphleteers @GrubStreetJorno @Survation @wiki_ballot @financialeyes @DavidGolemXIV #MAGA