[Pops]

This guy, Surplus Energy Economics has been blogging since 2012 or so. His thing is basically falling EROEI is leading to diminishing economic returns, which in their turn are being masked by increasing debt. The idea has been hashed out here endlessly so the reason to recommend this guy is that he talks about it just a little differently. He doesn't spout PO jargon or is not as EOTW-y as much as most, he seems more of an economist —albeit one whose eyes, ears and mouth aren't covered by the magic hand.

$this->bbcode_second_pass_quote('', '.').. there are three trends to be considered, each of which is absolutely critical, and each of which is gathering momentum. The aim here is to explore these trends, and share and discuss the interpretations of them made possible by surplus energy economics.

The first such trend is the growing inevitability of a second financial crisis (GFC II), which will dwarf the 2008 global financial crisis (GFC), whilst differing radically from it in nature.

The second is the progressive undermining of political incumbencies and systems, a process resulting from the widening divergence between policy assumption and economic reality.

The third is the clear danger that the current, gradual deterioration in global prosperity could accelerate into something far more damaging, disruptive and dangerous.

[AdamB]

$this->bbcode_second_pass_quote('Pops', 'T')his guy, Surplus Energy Economics has been blogging since 2012 or so. His thing is basically falling EROEI is leading to diminishing economic returns, which in their turn are being masked by increasing debt. The idea has been hashed out here endlessly so the reason to recommend this guy is that he talks about it just a little differently. He doesn't spout PO jargon or is not as EOTW-y as much as most, he seems more of an economist —albeit one whose eyes, ears and mouth aren't covered by the magic hand.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', 'T')his guy, Surplus Energy Economics has been blogging since 2012 or so.
$this->bbcode_second_pass_quote('', '.').. there are three trends to be considered....
The third is the clear danger that the current, gradual deterioration in global prosperity could accelerate into something far more damaging, disruptive and dangerous.

[Pops]

$this->bbcode_second_pass_quote('AdamB', 'O')nce again, some pretty basic geologic ignorance trips up the economists.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '
')Doesn't take a geologist or an economist to grasp that cost to produce new oil is double the cost of existing production. Even new mid-east oil is no longer cheap, $45 now vs $10 in the recent past and pennies back in the day.

[AdamB]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('AdamB', 'O')nce again, some pretty basic geologic ignorance trips up the economists.

[AdamB]

$this->bbcode_second_pass_quote('Plantagenet', '
')In fact, the higher the price of oil goes the better it is for the planet.
We have to stop using all fossil fuels as soon as possible or the planet is going to become too hot to trot.

[Plantagenet]

$this->bbcode_second_pass_quote('AdamB', '')$this->bbcode_second_pass_quote('Plantagenet', '
')In fact, the higher the price of oil goes the better it is for the planet.

[Outcast_Searcher]

This is interesting.

When I first saw the title of this thread, I thought it was going to be talking about the thing I've noticed -- that with green energy like wind and solar, there are erratic bursts of "surplus" energy at times (given the lack of batteries or other sources to store it, and how "dumb" the grid is, at least thus far.

I thought that might be an interesting thing to talk about, vs. the same old "peak oil" and "no growth" dogma, despite all the evidence of ongoing global and US GDP growth, almost every quarter, year after year (aside from the obvious exceptions, like the great recession and the big crunch in spring 2020 from the pandemic).

I thought about this, because I've been noticing discussions re controversy re things like Bitcoin, and how much energy it takes to mine it, and how mining is largely being done when electricity is DIRT CHEAP, like when there is a big burst of "excess" electricity from renewables, which causes the rates to get very low.

For one thing, economic incentives will make measuring and utilizing such energy more and more compelling over time. Mining BTC is just an obvious low hanging fruit for early usage, since it involves LOTS of compute cycles using LOTS of power, and the cost of that power is THE major economic variable, at least with current technology for that purpose.

Oh, and once large batteries and lots of electric storage become more common, then deciding when and how to sell or use one's spare power could very much become "a thing", which things like smart AI agents could perhaps greatly help optimize, 24x7.

I think we're living in very interesting times where on the one hand, lots of bad things are happening causing all kinds of societal stresses and pressures that make things harder, but OTOH, technology could well be used to help make dealing with MANY things much more efficient -- IF society is smart enough to look at things the right way, and prioritize efforts in the right directions.

And of course, things like the perception of needs and priorities, profit incentives, greed, stupidity, short term thinking, etc. will make an intense brew of very different potential outcomes. Pretty much same as it ever was since, say, the industrial revolution, but a lot more intense now with how much AI will be becoming very much "a thing", when coupled with the internet.

Not sure if this is worth talking about. And it may need to be under a different heading, re instead of energy economics, perhaps "making smart collective decisions with modern technology" or something.

Just for one example that might fit, Mobileye is saying it has a crowdsourcing (with drivers who sign up to be part of their network to provide such data to them, and be compensated for doing that) solution to automatically keep its HD maps updated for its coming robo-taxi business. And it's already planning to sell the data collected from that effort (not just road data but things like accidents, fires, downed power lines, big water leaks, really any kind of problem or emergency area government services might need/want to know about to dispatch government services, utilities, medical aid, etc.) to governments, etc. as another revenue stream. (How cool is that?)

Just thought I'd throw it out there in case anyone is interested in the idea.

[Pops]

$this->bbcode_second_pass_quote('AdamB', 'O')f course the nominal price of oil today is far more than yesteryear. The real price of oil, now, is similar to what it was from 1860 through about 1880.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '
')In 1880 oil was for lighting. The Model T didn't show up until 1908. Today oil is for pretty much everything.

[AdamB]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('AdamB', 'O')f course the nominal price of oil today is far more than yesteryear. The real price of oil, now, is similar to what it was from 1860 through about 1880.

[Pops]

$this->bbcode_second_pass_quote('AdamB', 'I')'m still waiting for someone to tell me what the price and chemical properties of this mysterious "conventional" oil is. Interestingly, no one has been able to yet.

[Plantagenet]

$this->bbcode_second_pass_quote('Pops', '
')Back to the surplus energy blog. I thought it was interesting because it draws a straight line from increasingly complex and expensive energy production to falling net GDP and increasing debt.

[mousepad]

$this->bbcode_second_pass_quote('Plantagenet', '
')This is actually good news because it suggests the US and other countries can lower their energy use without sacrificing GDP.

[Plantagenet]

$this->bbcode_second_pass_quote('mousepad', '')$this->bbcode_second_pass_quote('Plantagenet', '
')This is actually good news because it suggests the US and other countries can lower their energy use without sacrificing GDP.

[aadbrd]

I scanned through some of the blog posts and didn't find any real new ideas. Mostly the usual Peter Schiff debt bomb schtick which Armageddon parrots in the stock thread. Not that there really HAS to be any new ideas to describe where we are or where we're headed, mind you, but if I'm going to start reading a blog it would have to contain ideas that I haven't already considered. I'm not sure any such blogs exist. It seems everything's already been said already and we're just sort of seeing how things actually play out, given already-known factors.

[Pops]

The reason the site rang my bell is that like most people I knew that government debt was growing but I kind of considered it a budget problem, product of a dysfunctional government. Borrowing and inflation are better than either hyperinflation or deflation so whatever.

But here is the thing, I'm thinking now that the debt habit isn't the problem.

It finally dawned on me that without the borrowing, not only would GDP not have grown but subtracting out the borrowing, it would have been shrinking the last 50 years.

See? We've been on the precipice of deflation and depression since the '70s, constantly.



Look at the grey line in the chart, that is inflation adjusted GDP growth. Looks nice, growing steadily.
But consider, it includes all the goodies paid for by deficit spending and borrowing in general every year since the 1970s.

Now look at the yellow line, that is GDP growth minus the growth in debt.

Takeaway? Without constant fluffing the economy would be shrinking.

Diminishing Returns is the word. The question is why did we all of a sudden come up against a wall in the 1970s? Depending on who you ask you'll get the stock partisan answer—welfare, medicare, etc.

My thought is that the price of oil tippled after the US peak, about $130B/yr in a couple of years, right off the top—the entire US GDP at the time was only a trillion dollars. Right then is when Brenton Woods collapsed because .gov could either start pumping out the money or watch the economy dry up.

And why have we continued to prop up GDP since? I don't know any more than anyone else, but of course my knee-jerk is more expensive energy. Like I said before, $20/bbl average for 90 years up to the '70s—outside wartime— and at that time GDP growth was 5-15% pa.
Then $40 post US conventional peak, now $60 average after global conventional peak— and we're lucky to make 2% growth PA even with trillions of borrowing. Doesn't sound like much money but multiply it by 100mm/bbls/day x 365 days and it is a big number.

I find Martin's spiel familiar too. But it is more than just debt-bomb. It's about how cheap energy, like really cheap, fueled all that growth and without it we are going to have a hard time even treading water.


https://www.ceicdata.com/en/indicator/u ... onsumption
https://sites.google.com/site/globaloil ... production

[jedrider]

$this->bbcode_second_pass_quote('Pops', 'A')nd why have we continued to prop up GDP since?

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Pops', '
')It finally dawned on me that without the borrowing, not only would GDP not have grown but subtracting out the borrowing, it would have been shrinking the last 50 years.