Wednesday, February 10, 2016

The Physics Of Energy & The Economy


局域共振型声子晶体中的缺陷态研究 - 物理学报

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by 侯丽娜 - ‎2014 - ‎Cited by 5 - ‎Related articles
本文以二维固体局域共振声子晶体为例, 对次波长区域缺陷态的实现机理及其特点进行了探讨. ... 在其带隙附近的色散关系可由共振单元间的长程相互作用来理解.

[PDF]一种计算半导体力常数的简单途径 - 物理学报

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by LIN ZI-JING - ‎2005
Mar 9, 1988 - 我们将此力常数解析表达式用于计算Si, GaAS 及SiH, 的声子模, 并通过与实验及其 ... 原因是这种振动模牵涉到被紧束缚方法所忽略了的长程力.

声子谱--中国百科网

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声学波声子对光的散射称布里渊散射,光学波声子对光的散射称拉曼散射。 ... 由于晶体中原子间的长程库仑力作用及其与价电子的祸合:离子系统势函数依赖于电子 ...

长程面等离子元极化声子_例句_句子_短句_翻译_句子翻译_ ...

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爱词霸英语句库为广大英语学习爱好者提供长程面等离子元极化声子的例句、长程面等离子元极化声子的 ... 宇宙界的各种现象由两种长 程力, 即引力和电磁力所支配.

【转帖】强烈推荐使用phonopy计算声子谱- 第一原理- 小木虫- 学术科研第一站

emuch.net/html/200912/1710612.html
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Dec 4, 2009 - Phonopy简介Phonopy是一个由python实现的的晶体声子分析程序。 ... 但是对于绝缘体,有长程力,需要建立更大的胞,收敛性较差,所以计算量才 ...

[DOC]DOC檔

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by 簡介 - ‎Related articles
圖一:費米子間藉由激發玻色子即聲子而產生的等效交互作用費曼圖,實箭頭是費 .... 的短程作用力通常是排斥力而同時因玻色子的媒介而產生的作用力是長程吸引力, ...

5-8画 - 固体物理学 - 郑州轻工业学院

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电子分布函数 Electron distribution function. 电负性 Electronegativity. 电磁声子Electromagnetic phonon. 功函数 Work function. 长程力 Long-range force. 立方晶系 ...

量子声学_百度百科

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通常把金属中的点阵振动称为热声子,而量子声学着重讨论外加声波(声子)与物质 ... 串以无质量的弹簧来代表它们之间的相互作用的长程电磁力;当声波波长短到与 ...

强相互作用- 维基百科,自由的百科全书

https://zh.wikipedia.org/zh/强相互作用
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强相互作用也將夸克基本粒子結合成為質子及中子等強子,這也是組成大部份物質的粒子。而且一般 ... 強相互作用不像引力和電磁相互作用那樣是長程力而是短程力。

声电相互作用,acoustic-electric interaction,音标,读音,翻译 ...

www.dictall.com › 词典
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运用Hirsch的自旋极化铁磁理论并计入电-声子相互作用,讨论了金属氢 ... 电磁相互作用 带电物体或具有磁矩物体之间的相互作用,是一种长程力,力程为无穷。
Submitted by Tyler Durden on 02/10/2016 19:00 -0500



 
Submitted by Gail Tverberg via Our Finite World blog,
I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who understand how an economy operates. The combination leads to an awfully lot of false beliefs about the energy needs of an economy.
The primary issue at hand is that, as a dissipative system, every economy has its own energy needs, just as every forest has its own energy needs (in terms of sunlight) and every plant and animal has its own energy needs, in one form or another. A hurricane is another dissipative system. It needs the energy it gets from warm ocean water. If it moves across land, it will soon weaken and die.
There is a fairly narrow range of acceptable energy levels–an animal without enough food weakens and is more likely to be eaten by a predator or to succumb to a disease. A plant without enough sunlight is likely to weaken and die.
In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.
How should we expect an economy to behave over time? The pattern of energy dissipated over the life cycle of a dissipative system will vary, depending on the particular system. In the examples I gave, the pattern seems to somewhat follow what Ugo Bardi calls a Seneca Cliff.
Figure 1. Seneca Cliff by Ugo Bardi
Figure 1. Seneca Cliff by Ugo Bardi
The Seneca Cliff pattern is so-named because long ago, Lucius Seneca wrote:
It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.
The Standard Wrong Belief about the Physics of Energy and the Economy
There is a standard wrong belief about the physics of energy and the economy; it is the belief we can somehow train the economy to get along without much energy.
In this wrong view, the only physics that is truly relevant is the thermodynamics of oil fields and other types of energy deposits. All of these fields deplete if exploited over time. Furthermore, we know that there are a finite number of these fields. Thus, based on the Second Law of Thermodynamics, the amount of free energy we will have available in the future will tend to be less than today. This tendency will especially be true after the date when “peak oil” production is reached.
According to this wrong view of energy and the economy, all we need to do is design an economy that uses less energy. We can supposedly do this by increasing efficiency, and by changing the nature of the economy to use a greater proportion of services. If we also add renewables (even if they are expensive) the economy should be able to get along fine with very much less energy.
These wrong views are amazingly widespread. They seem to underlie the widespread hope that the world can reduce its fossil fuel use by 80% between now and 2050 without badly disturbing the economy. The book 2052: A Forecast for the Next 40 Years by Jorgen Randers seems to reflect these views. Even the “Stabilized World Model” presented in the 1972 book The Limits to Growth by Meadow et al. seems to be based on naive assumptions about how much reduction in energy consumption is possible without causing the economy to collapse.
The Economy as a Dissipative System
If an economy is a dissipative system, it needs sufficient energy flows. Otherwise, it will collapse in a way that is analogous to animals succumbing to a disease or forests succumbing to forest fires.
The primary source of energy flows to the economy seems to come through the leveraging of human labor with supplemental energy products of various types, such as animal labor, fossil fuels, and electricity. For example, a man with a machine (which is made using energy products and operates using energy products) can make more widgets than a man without a machine. A woman operating a computer in a lighted room can make more calculations than a woman who inscribes numbers with a stick on a clay tablet and adds them up in her head, working outside as weather permits.
As long as the quantity of supplemental energy supplies keeps rising rapidly enough, human labor can become increasingly productive. This increased productivity can feed through to higher wages. Because of these growing wages, tax payments can be higher. Consumers can also have ever more funds available to buy goods and services from businesses. Thus, an economy can continue to grow.
Besides inadequate supplemental energy, the other downside risk to continued economic growth is the possibility that diminishing returns will start making the economy less efficient. These are some examples of how this can happen:
  • Deeper wells or desalination are needed for water because aquifers deplete and population grows.
  • More productivity is needed from each acre of arable land because of growing population (and thus, falling arable land per person).
  • Larger mines are required as ores of high mineral concentration are exhausted and we are forced to exploit less productive mines.
  • More pollution control devices or higher-cost workarounds (such as “renewables”) are needed as pollution increases.
  • Fossil fuels from cheap-to-extract locations are exhausted, so extraction must come from more difficult-to-extract locations.
In theory, even these diminishing returns issues can be overcome, if the leveraging of human labor with supplemental energy is growing quickly enough.
Theoretically, technology might also increase economic growth. The catch with technology is that it is very closely related to energy consumption. Without energy consumption, it is not possible to have metals. Most of today’s technology depends (directly or indirectly) on the use of metals. If technology makes a particular type of product cheaper to make, there is also a good chance that more products of that type will be sold. Thus, in the end, growth in technology tends to allow more energy to be consumed.
Why Economic Collapses Occur
Collapses of economies seem to come from a variety of causes. One of these is inadequate wages of low-ranking workers (those who are not highly educated or of managerial rank). This tends to happen because if there are not enough energy flows to go around, it tends to be the wages of the “bottom-ranking” employees that get squeezed. In some cases, not enough jobs are available; in others, wages are too low. This could be thought of as inadequate return on human labor–a different kind of low Energy Return on Energy Invested (EROEI) than is currently analyzed in most of today’s academic studies.
Another area vulnerable to inadequate energy flows is the price level of commodities. If energy flows are inadequate, prices of commodities will tend to fall below the cost of producing these commodities. This can lead to a cutoff of commodity production. If this happens, debt related to commodity production will also tend to default. Defaulting debt can be a huge problem, because of the adverse impact on financial institutions.
Another way that inadequate energy flows can manifest themselves is through the falling profitability of companies, such as the falling revenue that banks are now experiencing. Still another way that inadequate energy flows can manifest themselves is through falling tax revenue. Governments of commodity exporters are particularly vulnerable when commodity prices are low. Ultimately, these inadequate energy flows can lead to bankrupt companies and collapsing governments.
The closest situation that the US has experienced to collapse is the Depression of the 1930s. The Great Recession of 2007-2009 would represent a slight case of inadequate energy flows–one that could be corrected by a large dose of Quantitative Easing (QE)(leading to the lower cost of borrowing), plus debt stimulus by China. These helped bring oil prices back up again, after they fell in mid-2008.
Figure 1. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Figure 2. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Clearly, we are now again beginning to experience the effects of inadequate energy flows. This is worrying, because many economies have collapsed in the past when this situation occurred.
How Energy Flows of an Economy are Regulated
In an economy, the financial system is the regulator of the energy flows of the system. If the price of a product is low, it dictates that a small share of energy flows will be directed toward that product. If it is high, it indicates that a larger share of energy flows will be directed toward that product. Wages follow a similar pattern, with low wages indicating low flows of energy, and high wages indicating higher flows of energy. Energy flows in fact “pay for” all aspects of the system, including more advanced technology and the changes to the system (more education, less time in the workforce) that make advanced technology possible.
One confusing aspect to today’s economy is the use of a “pay you later” approach to paying for energy flows. If the energy flows are inadequate using what we would think of as the natural flows of the system, debt is often used to increase energy flows. Debt has the effect of directing future energy flows in a particular direction, such as paying for a factory, a house, or a car. These flows will be available when the product is already part of the system, and thus are easier to accommodate in the system.
The use of increasing debt allows total “demand” for products of many kinds to be higher, because it directs both future flows and current flows of energy toward a product. Since factories, houses and cars are made using commodities, the use of an increasing amount of debt tends to raise commodity prices. With higher commodity prices, more of the resources of the economy are directed toward producing energy products. This allows for increasing energy consumption. This increased energy consumption tends to help flows of energy to many areas of the economy at the same time: wages, taxes, business profitability, and funds for interest and dividend payments.
The need for debt greatly increases when an economy begins using fossil fuels, because the use of fossil fuels allows a step-up in lifestyle. There is no way that this step-up in lifestyle can be paid for in advance, because the benefits of the new system are so much better than what was available without fossil fuels. For example, a farmer raising crops using only a hoe for a tool will never be able to save up sufficient funds (energy flows) needed to pay for a tractor. While it may seem bizarre that banks loan money into existence, this approach is in fact essential, if adequate energy flows are to be available to compensate for the better lifestyle that the use of fossil fuels makes possible.
Debt needs are low when the cost (really energy cost) of producing energy products is low. Much more debt is needed when the cost of energy extraction is high. The reason more debt is needed is because fossil fuels and other types of energy products tend to leverage human labor, making human labor more productive, as mentioned previously. In order to maintain this leveraging, an adequate quantity of energy products (measured in British Thermal Units or Barrels of Oil Equivalent or some similar unit) is needed.
As the required price for energy-products rises, it takes ever-more debt to finance a similar amount of energy product, plus the higher cost of homes, cars, factories, and roads using the higher-cost energy. In fact, with higher energy costs, capital goods of all kinds will tend to be more expensive. This is a major reason why the ratio of debt to GDP tends to rise as the cost of producing energy products rises. At this point, in the United States it takes approximately $3 of additional debt to increase GDP by $1 (author’s calculation).
Figure 1. Inflation adjusted Brent oil prices (in 2014$, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all inclusive; the other excludes Financial Business debt. Both are based on data from FRED -Federal Reserve of St. Louis.
Figure 3. Inflation adjusted Brent oil prices (in $2014, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all-inclusive; the other excludes Financial Business debt. Both are based on data from FRED-Federal Reserve of St. Louis.
Clearly one of the risk factors to an economy using fossil fuels is that debt levels will become unacceptably high.
A second risk is that debt will stop rising fast enough to keep commodity prices at an acceptably high level. The recent slowdown in the growth of debt (Figure 3) no doubt contributes to current low commodity prices.
A third risk to the system is that the rate of economic growth will slow over time because even with the large amount of debt added to the system, the leveraging of human labor with supplemental energy will not be sufficient to maintain economic growth in the face of diminishing returns. In fact, it is clearly evident that US economic growth has trended downward over time (Figure 4).
Figure 3. US annual growth rates (using "real" or inflation adjusted data from the Bureau of Economic Analysis). 
Figure 4. US annual growth rates (using “real” or inflation adjusted data from the Bureau of Economic Analysis).
A fourth risk is that the whole system will become unsustainable. When new debt is issued, there is no real matching with future energy flow. For example, will the wages of those taking on debt to pay for college be sufficiently high that the debtors can afford to have families and buy homes? If not, their lack of adequate income will be one of the factors that make it difficult for the prices of commodities to stay high enough to encourage extraction.
One of the issues in today’s economy is that promises of future energy flows extend far beyond what is formally called debt. These promises include shareholder dividends and payments under government programs such as Social Security and Medicare. Reneging on promises such as these is likely to be unpopular with citizens. Stock prices are likely to drop, and private pensions will become unpayable. Governments may be overthrown by disappointed citizens.

Examples of Past Collapses of Economies

Example of the Partial Collapse of the Former Soviet Union
One recent example of a partial collapse was that of the Former Soviet Union (FSU) in December 1991. I call this a partial collapse, because it “only” involved the collapse of the central government that held together the various republics. The governments of the individual republics remained in place, and many of the services they provided, such as public transportation, continued. The amount of manufacturing performed by the FSU dropped precipitously, as did oil extraction. Prior to the collapse, the FSU had serious financial problems. Shortly before its collapse, the world’s leading industrial nations agreed to lend the Soviet Union $1 billion and defer repayment on $3.6 billion more in debt.
A major issue that underlay this collapse was a fall in oil prices to the $30 per barrel range in the 1986 to 2004 period. The Soviet Union was a major oil exporter. The low price had an adverse impact on the economy, a situation similar to that of today.
Figure 4. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015. 
Figure 5. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.
Russia continued to pump oil even after the price dropped in 1986. In fact, it raised oil production, to compensate for the low price (energy flow it received per barrel). This is similar to the situation today, and what we would expect if oil exporters are very dependent on these energy flows, no matter how small. Oil production didn’t fall below the 1986 level until 1989, most likely from inadequate funds for reinvestment. Oil production rose again, once prices rose.
Figure 6 shows that the FSU’s consumption of energy products started falling precipitously in 1991, the year of the collapse–very much a Seneca Cliff type of decline.
Figure 5. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.
Figure 6. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.
In fact, consumption of all fuels, even nuclear and hydroelectric, fell simultaneously. This is what we would expect if the FSU’s problems were caused by the low prices it was receiving as an oil exporter. With low oil prices, there could be few good-paying jobs. Lack of good-paying jobs–in other words, inadequate return on human labor–is what cuts demand for energy products of all kinds.
A drop in population took place as well, but it didn’t begin until 1996. The decrease in population continued until 2007. Between 1995 and 2007, population dropped by a total of 1.6%, or a little over 0.1% per year. Before the partial collapse, population was rising about 0.9% per year, so the collapse seems to have reduced the population growth rate by about 1.0% per year. Part of the drop in population was caused by excessive alcohol consumption by some men who had lost their jobs (their sources of energy flows) after the fall of the central government.
When commodity prices fall below the cost of oil production, it is as if the economy is cold because of low energy flows. Prof. Francois Roddier describes the point at which collapse sets in as the point of self-organized criticality. According to Roddier (personal correspondence):
Beyond the critical point, wealth condenses into two phases that can be compared to a gas phase and a liquid phase. A small number of rich people form the equivalent of a gas phase, whereas a large number of poor people form what corresponds to a liquid phase. Like gas molecules, rich people monopolize most of the energy and have the freedom to move. Embedded in their liquid phase, poor people have lost access to both energy and freedom. Between the two, the so-called middle class collapses.
I would wonder whether the ones who die would be equivalent to the solid state. They can no longer move at all.
Analysis of Earlier Collapses
A number of studies have been performed analyzing earlier collapses. Turchin and Nefedov in Secular Cycles analyze eight pre-fossil fuel collapses in detail. Figure 7 shows my interpretation of the pattern they found.
Figure 7. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.
Figure 7. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov inSecular Cycles.
Again, the pattern is that of a Seneca Cliff. Some of the issues leading to collapse include the following:
  1. Rising population relative to farmland. Either farmland was divided up into smaller plots, so each farmer produced less, or new workers received “service” type jobs, at much reduced wages. The result was falling earnings of many non-elite workers.
  2. Spiking food and energy prices. Prices were high at times due to lack of supply, but held down by low wages of workers.
  3. Rising need for government to solve problems (for example, fight war to get more land; install irrigation system so get more food from existing land). Led to a need for increased taxes, which impoverished workers could not afford.
  4. Increased number of nobles and high-level administrators. Result was increased disparity of wages.
  5. Increased debt, as more people could not afford necessities.
Eventually, the workers who were weakened by low wages and high taxes tended to succumb to epidemics. Some died in wars. Again, we have a situation of low energy flows, and the lower wage workers not getting enough of these flows. Many died–in some cases as many as 95%. These situations were much more extreme than those of the FSU. On the favorable side, the fact that there were few occupations back in pre-industrial days meant that those who did survive could sometimes resettle with other nearby communities and continue to practice their occupations.
Joseph Tainter in The Collapse of Complex Societies talks about the need for increasing complexity, as diminishing returns set in. This would seem to correspond to the need for increased government services and an increased role for businesses. Also included in increased complexity would be increased hierarchical structure. All of these changes would leave a smaller share of the energy flows for the low-ranking workers–a problem mentioned previously.
Dr. Tainter also makes the point that to maintain complexity, “Sustainability may require greater consumption of resources, not less.”
A Few Insights as to the Nature of the Physics Problem
The Second Law of Thermodynamics seems to work in a single direction. It talks about the natural tendency of any “closed” system to degenerate into a more disordered system. With this view, the implication is that the universe will ultimately end in a heat-death, in which everything is at the same temperature.
Dissipative systems work in the other direction; they create order where no order previously existed. Economies get ever-more complex, as businesses grow larger and more hierarchical in form, governments provide more services, and the number of different jobs filled by members of the economy proliferate. How do we explain this additional order?
According to Ulanowicz, the traditional focus of thermodynamics has been on states, rather than on the process of getting from one state to another. What is needed is a theory that is more focused on processes, rather than states. He writes,
.  .  . the prevailing view of the second law is an oversimplified version of its true nature. Simply put, entropy is not entirely about disorder. Away from equilibrium, there is an obverse and largely unappreciated side to the second law that, in certain circumstances, mandates the creation of order.
We are observing the mandated creation of order. For example, the human body takes heat energy and transforms it to mechanical energy. There is a dualism to the entropy system that many have not stopped to appreciate. Instead of a trend toward heat death always being the overarching goal, systems have a two-way nature to them. Dissipative systems are able to grow until they reach a point called self-organized criticality or the “critical point”; then they shrink from inadequate energy flows.
In forests, this point of self-organized criticality comes when the growth of the tall trees starts blocking out the light to the shorter plants. As mentioned earlier, at that point the forest starts becoming more susceptible to forest fires. Ulanowicz shows that for ecosystems with more than 12 elements, there is quite a narrow “window of viability.”
Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow "window of viability" of such ecosystems. From 
Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow “window of viability” of such ecosystems. From Ulanowicz
If we look at world per capita energy consumption, it seems to indicate a very narrow “window of viability” as well.
Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.
Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.
When we look at what happened in the world economy alongside the history of world energy consumption, we can see a pattern. Back prior to 1973, when oil was less than $30 per barrel, oil consumption and the economy grew rapidly. A lot of infrastructure (interstate highways, electric transmission lines, and pipelines) was added in this timeframe. The 1973-1974 price shock and related recession briefly brought energy consumption down.
It wasn’t until the restructuring of the economy in the late 1970s and early 1980s that energy consumption really came down. There were many changes made: cars became smaller and more fuel efficient; electricity production was changed from oil to other approaches, often nuclear; regulation of utilities was changed toward greater competition, thus discouraging building infrastructure unless it was absolutely essential.
The drop in energy consumption after 1991 reflects the fall of the Former Soviet Union. The huge ramp-up in energy consumption after 2001 represents the effect of adding China (with all of its jobs and coal consumption) to the World Trade Organization. With this change, energy needs became permanently higher, if China was to have enough jobs for its people. Each small dip seems to represent a recession. Recently energy consumption seems to be down again. If we consider low consumption along with low commodity prices, it makes for a worrying situation. Are we approaching a major recession, or worse?
If we think of the world economy relative to its critical point, the world economy has been near this point since 1981, but various things have pulled us out.
One thing that has helped the economy is the extremely high interest rate (18%) implemented in 1981. This high interest rate pushed down fossil fuel usage at that time. It also gave interest rates a very long way to fall. Falling interest rates have a very favorable impact on the economy. They encourage greater lending and tend to raise the selling prices of stocks. The economy has received a favorable boost from falling interest rates for almost the entire period between 1981 and the present.
Other factors were important as well. The fall of the Soviet Union in 1991 bought the rest of the world a little time (and saved oil extraction for later); the addition of China to the World Trade Organization in 2001 added a great deal of cheap coal to the energy mix, helping to bring down energy costs. These low energy costs, plus all of the debt China was able to add, allowed energy consumption and the world economy to grow again–temporarily pulling the world away from the critical point.
In 2008, oil prices dropped very low. It was only with QE that interest rates could be brought very low, and commodity prices bounced back up to adequate levels. Now we are again faced with low prices. It looks as if we are again at the critical point, and thus the edge of collapse.
Once a dissipative structure is past its critical point, Roddier says that what is likely to bring it down is an avalanche of bifurcations. In the case of an economy, these might be debt defaults.
In a dissipative structure, both communication and stored information are important. Stored information, which is very close to technology, becomes very important when food is hard to find or energy is high cost to extract. When energy is low-cost to extract, practically anyone can find and make use of energy, so technology is less important.
Communication in an economy is done in various ways, including through the use of money and debt. Few people understand the extent to which debt can give false signals about future availability of energy flows. Thus, it is possible for an economy to build up to a very large size, with few realizing that this approach to building an economy is very similar to a Ponzi Scheme. It can continue only as long as energy costs are extremely low, or debt is being rapidly added.
In theory, EROEI calculations (comparing energy produced by a device or energy product to fossil fuel energy consumed increasing this product) should communicate the “value” of a particular energy product. Unfortunately, this calculation is based the common misunderstanding of the nature of the physics problem that I mentioned at the beginning of the article. (This is also true for similar analyses, such as Lifecycle Analyses.) These calculations would communicate valuable information, if our problem were “running out” of fossil fuels, and if the way to mitigate this problem were to use fossil fuels as sparingly as possible. If our problem is rising debt levels, EROEI and similar calculations do nothing to show us how to mitigate the problem.
If the economy collapses, it will collapse down to a lower sustainable level. Much of the world’s infrastructure was built when oil could be extracted for $20 per barrel. That time is long gone. So, it looks like the world will need to collapse back to a level before fossil fuels–perhaps much before fossil fuels.
If it is any consolation, Prof. Roddier says that once new economies begin to form again, the survivors after collapse will tend to be more co-operative. In fact, he offers this graphic.
Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, "The Thermodynamics of Evolution."
Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, “The Thermodynamics of Evolution.”
We know that if there are survivors, new economies will be likely. We don’t know precisely what they will be like, except that they will be limited to using resources that are available at that time.
I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who understand how an economy operates. The combination leads to an awfully lot of false beliefs about the energy needs of an economy.
The primary issue at hand is that, as a dissipative system, every economy has its own energy needs, just as every forest has its own energy needs (in terms of sunlight) and every plant and animal has its own energy needs, in one form or another. A hurricane is another dissipative system. It needs the energy it gets from warm ocean water. If it moves across land, it will soon weaken and die.
There is a fairly narrow range of acceptable energy levels–an animal without enough food weakens and is more likely to be eaten by a predator or to succumb to a disease. A plant without enough sunlight is likely to weaken and die.
In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.
How should we expect an economy to behave over time? The pattern of energy dissipated over the life cycle of a dissipative system will vary, depending on the particular system. In the examples I gave, the pattern seems to somewhat follow what Ugo Bardi calls a Seneca Cliff.
Figure 1. Seneca Cliff by Ugo Bardi
Figure 1. Seneca Cliff by Ugo Bardi
The Seneca Cliff pattern is so-named because long ago, Lucius Seneca wrote:
It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.
The Standard Wrong Belief about the Physics of Energy and the Economy
There is a standard wrong belief about the physics of energy and the economy; it is the belief we can somehow train the economy to get along without much energy.
In this wrong view, the only physics that is truly relevant is the thermodynamics of oil fields and other types of energy deposits. All of these fields deplete if exploited over time. Furthermore, we know that there are a finite number of these fields. Thus, based on the Second Law of Thermodynamics, the amount of free energy we will have available in the future will tend to be less than today. This tendency will especially be true after the date when “peak oil” production is reached.
According to this wrong view of energy and the economy, all we need to do is design an economy that uses less energy. We can supposedly do this by increasing efficiency, and by changing the nature of the economy to use a greater proportion of services. If we also add renewables (even if they are expensive) the economy should be able to get along fine with very much less energy.
These wrong views are amazingly widespread. They seem to underlie the widespread hope that the world can reduce its fossil fuel use by 80% between now and 2050 without badly disturbing the economy. The book 2052: A Forecast for the Next 40 Years by Jorgen Randers seems to reflect these views. Even the “Stabilized World Model” presented in the 1972 bookThe Limits to Growth by Meadow et al. seems to be based on naive assumptions about how much reduction in energy consumption is possible without causing the economy to collapse.
The Economy as a Dissipative System
If an economy is a dissipative system, it needs sufficient energy flows. Otherwise, it will collapse in a way that is analogous to animals succumbing to a disease or forests succumbing to forest fires.
The primary source of energy flows to the economy seems to come through the leveraging of human labor with supplemental energy products of various types, such as animal labor, fossil fuels, and electricity. For example, a man with a machine (which is made using energy products and operates using energy products) can make more widgets than a man without a machine. A woman operating a computer in a lighted room can make more calculations than a woman who inscribes numbers with a stick on a clay tablet and adds them up in her head, working outside as weather permits.
As long as the quantity of supplemental energy supplies keeps rising rapidly enough, human labor can become increasingly productive. This increased productivity can feed through to higher wages. Because of these growing wages, tax payments can be higher. Consumers can also have ever more funds available to buy goods and services from businesses. Thus, an economy can continue to grow.
Besides inadequate supplemental energy, the other downside risk to continued economic growth is the possibility that diminishing returns will start making the economy less efficient. These are some examples of how this can happen:
  • Deeper wells or desalination are needed for water because aquifers deplete and population grows.
  • More productivity is needed from each acre of arable land because of growing population (and thus, falling arable land per person).
  • Larger mines are required as ores of high mineral concentration are exhausted and we are forced to exploit less productive mines.
  • More pollution control devices or higher-cost workarounds (such as “renewables”) are needed as pollution increases.
  • Fossil fuels from cheap-to-extract locations are exhausted, so extraction must come from more difficult-to-extract locations.
In theory, even these diminishing returns issues can be overcome, if the leveraging of human labor with supplemental energy is growing quickly enough.
Theoretically, technology might also increase economic growth. The catch with technology is that it is very closely related to energy consumption. Without energy consumption, it is not possible to have metals. Most of today’s technology depends (directly or indirectly) on the use of metals. If technology makes a particular type of product cheaper to make, there is also a good chance that more products of that type will be sold. Thus, in the end, growth in technology tends to allow more energy to be consumed.
Why Economic Collapses Occur
Collapses of economies seem to come from a variety of causes. One of these is inadequate wages of low-ranking workers (those who are not highly educated or of managerial rank). This tends to happen because if there are not enough energy flows to go around, it tends to be the wages of the “bottom-ranking” employees that get squeezed. In some cases, not enough jobs are available; in others, wages are too low. This could be thought of as inadequate return on human labor–a different kind of low Energy Return on Energy Invested (EROEI) than is currently analyzed in most of today’s academic studies.
Another area vulnerable to inadequate energy flows is the price level of commodities. If energy flows are inadequate, prices of commodities will tend to fall below the cost of producing these commodities. This can lead to a cutoff of commodity production. If this happens, debt related to commodity production will also tend to default. Defaulting debt can be a huge problem, because of the adverse impact on financial institutions.
Another way that inadequate energy flows can manifest themselves is through the falling profitability of companies, such as the falling revenue that banks are now experiencing. Still another way that inadequate energy flows can manifest themselves is through falling tax revenue. Governments of commodity exporters are particularly vulnerable when commodity prices are low. Ultimately, these inadequate energy flows can lead to bankrupt companies and collapsing governments.
The closest situation that the US has experienced to collapse is the Depression of the 1930s. The Great Recession of 2007-2009 would represent a slight case of inadequate energy flows–one that could be corrected by a large dose of Quantitative Easing (QE)(leading to the lower cost of borrowing), plus debt stimulus by China. These helped bring oil prices back up again, after they fell in mid-2008.
Figure 1. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Figure 2. World Oil Supply (production including biofuels, natural gas liquids) and Brent monthly average spot prices, based on EIA data.
Clearly, we are now again beginning to experience the effects of inadequate energy flows. This is worrying, because many economies have collapsed in the past when this situation occurred.
How Energy Flows of an Economy are Regulated
In an economy, the financial system is the regulator of the energy flows of the system. If the price of a product is low, it dictates that a small share of energy flows will be directed toward that product. If it is high, it indicates that a larger share of energy flows will be directed toward that product. Wages follow a similar pattern, with low wages indicating low flows of energy, and high wages indicating higher flows of energy. Energy flows in fact “pay for” all aspects of the system, including more advanced technology and the changes to the system (more education, less time in the workforce) that make advanced technology possible.
One confusing aspect to today’s economy is the use of a “pay you later” approach to paying for energy flows. If the energy flows are inadequate using what we would think of as the natural flows of the system, debt is often used to increase energy flows. Debt has the effect of directing future energy flows in a particular direction, such as paying for a factory, a house, or a car. These flows will be available when the product is already part of the system, and thus are easier to accommodate in the system.
The use of increasing debt allows total “demand” for products of many kinds to be higher, because it directs both future flows and current flows of energy toward a product. Since factories, houses and cars are made using commodities, the use of an increasing amount of debt tends to raise commodity prices. With higher commodity prices, more of the resources of the economy are directed toward producing energy products. This allows for increasing energy consumption. This increased energy consumption tends to help flows of energy to many areas of the economy at the same time: wages, taxes, business profitability, and funds for interest and dividend payments.
The need for debt greatly increases when an economy begins using fossil fuels, because the use of fossil fuels allows a step-up in lifestyle. There is no way that this step-up in lifestyle can be paid for in advance, because the benefits of the new system are so much better than what was available without fossil fuels. For example, a farmer raising crops using only a hoe for a tool will never be able to save up sufficient funds (energy flows) needed to pay for a tractor. While it may seem bizarre that banks loan money into existence, this approach is in fact essential, if adequate energy flows are to be available to compensate for the better lifestyle that the use of fossil fuels makes possible.
Debt needs are low when the cost (really energy cost) of producing energy products is low. Much more debt is needed when the cost of energy extraction is high. The reason more debt is needed is because fossil fuels and other types of energy products tend to leverage human labor, making human labor more productive, as mentioned previously. In order to maintain this leveraging, an adequate quantity of energy products (measured in British Thermal Units or Barrels of Oil Equivalent or some similar unit) is needed.
As the required price for energy-products rises, it takes ever-more debt to finance a similar amount of energy product, plus the higher cost of homes, cars, factories, and roads using the higher-cost energy. In fact, with higher energy costs, capital goods of all kinds will tend to be more expensive. This is a major reason why the ratio of debt to GDP tends to rise as the cost of producing energy products rises. At this point, in the United States it takes approximately $3 of additional debt to increase GDP by $1 (author’s calculation).
Figure 1. Inflation adjusted Brent oil prices (in 2014$, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all inclusive; the other excludes Financial Business debt. Both are based on data from FRED -Federal Reserve of St. Louis.
Figure 3. Inflation adjusted Brent oil prices (in $2014, primarily from BP Statistical Review of World Energy) shown beside two measures of debt for the US economy. One measure of debt is all-inclusive; the other excludes Financial Business debt. Both are based on data from FRED-Federal Reserve of St. Louis.
Clearly one of the risk factors to an economy using fossil fuels is that debt levels will become unacceptably high.
A second risk is that debt will stop rising fast enough to keep commodity prices at an acceptably high level. The recent slowdown in the growth of debt (Figure 3) no doubt contributes to current low commodity prices.
A third risk to the system is that the rate of economic growth will slow over time because even with the large amount of debt added to the system, the leveraging of human labor with supplemental energy will not be sufficient to maintain economic growth in the face of diminishing returns. In fact, it is clearly evident that US economic growth has trended downward over time (Figure 4).
Figure 3. US annual growth rates (using "real" or inflation adjusted data from the Bureau of Economic Analysis).
Figure 4. US annual growth rates (using “real” or inflation adjusted data from the Bureau of Economic Analysis).
A fourth risk is that the whole system will become unsustainable. When new debt is issued, there is no real matching with future energy flow. For example, will the wages of those taking on debt to pay for college be sufficiently high that the debtors can afford to have families and buy homes? If not, their lack of adequate income will be one of the factors that make it difficult for the prices of commodities to stay high enough to encourage extraction.
One of the issues in today’s economy is that promises of future energy flows extend far beyond what is formally called debt. These promises include shareholder dividends and payments under government programs such as Social Security and Medicare. Reneging on promises such as these is likely to be unpopular with citizens. Stock prices are likely to drop, and private pensions will become unpayable. Governments may be overthrown by disappointed citizens.

Examples of Past Collapses of Economies

Example of the Partial Collapse of the Former Soviet Union
One recent example of a partial collapse was that of the Former Soviet Union (FSU) in December 1991. I call this a partial collapse, because it “only” involved the collapse of the central government that held together the various republics. The governments of the individual republics remained in place, and many of the services they provided, such as public transportation, continued. The amount of manufacturing performed by the FSU dropped precipitously, as did oil extraction. Prior to the collapse, the FSU had serious financial problems. Shortly before its collapse, the world’s leading industrial nations agreed to lend the Soviet Union $1 billion and defer repayment on $3.6 billion more in debt.
A major issue that underlay this collapse was a fall in oil prices to the $30 per barrel range in the 1986 to 2004 period. The Soviet Union was a major oil exporter. The low price had an adverse impact on the economy, a situation similar to that of today.
Figure 4. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.
Figure 5. Oil production and price of the Former Soviet Union, based on BP Statistical Review of World Energy 2015.
Russia continued to pump oil even after the price dropped in 1986. In fact, it raised oil production, to compensate for the low price (energy flow it received per barrel). This is similar to the situation today, and what we would expect if oil exporters are very dependent on these energy flows, no matter how small. Oil production didn’t fall below the 1986 level until 1989, most likely from inadequate funds for reinvestment. Oil production rose again, once prices rose.
Figure 6 shows that the FSU’s consumption of energy products started falling precipitously in 1991, the year of the collapse–very much a Seneca Cliff type of decline.
Figure 5. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.
Figure 6. Former Soviet Union energy consumption by source, based on BP Statistical Review of World Energy Data 2015.
In fact, consumption of all fuels, even nuclear and hydroelectric, fell simultaneously. This is what we would expect if the FSU’s problems were caused by the low prices it was receiving as an oil exporter. With low oil prices, there could be few good-paying jobs. Lack of good-paying jobs–in other words, inadequate return on human labor–is what cuts demand for energy products of all kinds.
A drop in population took place as well, but it didn’t begin until 1996. The decrease in population continued until 2007. Between 1995 and 2007, population dropped by a total of 1.6%, or a little over 0.1% per year. Before the partial collapse, population was rising about 0.9% per year, so the collapse seems to have reduced the population growth rate by about 1.0% per year. Part of the drop in population was caused by excessive alcohol consumption by some men who had lost their jobs (their sources of energy flows) after the fall of the central government.
When commodity prices fall below the cost of oil production, it is as if the economy is cold because of low energy flows. Prof. Francois Roddier describes the point at which collapse sets in as the point of self-organized criticality. According to Roddier (personal correspondence):
Beyond the critical point, wealth condenses into two phases that can be compared to a gas phase and a liquid phase. A small number of rich people form the equivalent of a gas phase, whereas a large number of poor people form what corresponds to a liquid phase. Like gas molecules, rich people monopolize most of the energy and have the freedom to move. Embedded in their liquid phase, poor people have lost access to both energy and freedom. Between the two, the so-called middle class collapses.
I would wonder whether the ones who die would be equivalent to the solid state. They can no longer move at all.
Analysis of Earlier Collapses
A number of studies have been performed analyzing earlier collapses. Turchin and Nefedov inSecular Cycles analyze eight pre-fossil fuel collapses in detail. Figure 7 shows my interpretation of the pattern they found.
Figure 7. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.
Figure 7. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov inSecular Cycles.
Again, the pattern is that of a Seneca Cliff. Some of the issues leading to collapse include the following:
  1. Rising population relative to farmland. Either farmland was divided up into smaller plots, so each farmer produced less, or new workers received “service” type jobs, at much reduced wages. The result was falling earnings of many non-elite workers.
  2. Spiking food and energy prices. Prices were high at times due to lack of supply, but held down by low wages of workers.
  3. Rising need for government to solve problems (for example, fight war to get more land; install irrigation system so get more food from existing land). Led to a need for increased taxes, which impoverished workers could not afford.
  4. Increased number of nobles and high-level administrators. Result was increased disparity of wages.
  5. Increased debt, as more people could not afford necessities.
Eventually, the workers who were weakened by low wages and high taxes tended to succumb to epidemics. Some died in wars. Again, we have a situation of low energy flows, and the lower wage workers not getting enough of these flows. Many died–in some cases as many as 95%. These situations were much more extreme than those of the FSU. On the favorable side, the fact that there were few occupations back in pre-industrial days meant that those who did survive could sometimes resettle with other nearby communities and continue to practice their occupations.
Joseph Tainter in The Collapse of Complex Societies talks about the need for increasing complexity, as diminishing returns set in. This would seem to correspond to the need for increased government services and an increased role for businesses. Also included in increased complexity would be increased hierarchical structure. All of these changes would leave a smaller share of the energy flows for the low-ranking workers–a problem mentioned previously.
Dr. Tainter also makes the point that to maintain complexity, “Sustainability may require greater consumption of resources, not less.”
A Few Insights as to the Nature of the Physics Problem
The Second Law of Thermodynamics seems to work in a single direction. It talks about the natural tendency of any “closed” system to degenerate into a more disordered system. With this view, the implication is that the universe will ultimately end in a heat-death, in which everything is at the same temperature.
Dissipative systems work in the other direction; they create order where no order previously existed. Economies get ever-more complex, as businesses grow larger and more hierarchical in form, governments provide more services, and the number of different jobs filled by members of the economy proliferate. How do we explain this additional order?
According to Ulanowicz, the traditional focus of thermodynamics has been on states, rather than on the process of getting from one state to another. What is needed is a theory that is more focused on processes, rather than states. He writes,
.  .  . the prevailing view of the second law is an oversimplified version of its true nature. Simply put, entropy is not entirely about disorder. Away from equilibrium, there is an obverse and largely unappreciated side to the second law that, in certain circumstances, mandates the creation of order.
We are observing the mandated creation of order. For example, the human body takes heat energy and transforms it to mechanical energy. There is a dualism to the entropy system that many have not stopped to appreciate. Instead of a trend toward heat death always being the overarching goal, systems have a two-way nature to them. Dissipative systems are able to grow until they reach a point called self-organized criticality or the “critical point”; then they shrink from inadequate energy flows.
In forests, this point of self-organized criticality comes when the growth of the tall trees starts blocking out the light to the shorter plants. As mentioned earlier, at that point the forest starts becoming more susceptible to forest fires. Ulanowicz shows that for ecosystems with more than 12 elements, there is quite a narrow “window of viability.”
Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow "window of viability" of such ecosystems. From
Figure 8. Illustration of close clustering of ecosystems with more than 12 elements, indicating the narrow “window of viability” of such ecosystems. From Ulanowicz
If we look at world per capita energy consumption, it seems to indicate a very narrow “window of viability” as well.
Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.
Figure 9. World energy consumption per capita, based on BP Statistical Review of World Energy 2105 data. Year 2015 estimate and notes by G. Tverberg.
When we look at what happened in the world economy alongside the history of world energy consumption, we can see a pattern. Back prior to 1973, when oil was less than $30 per barrel, oil consumption and the economy grew rapidly. A lot of infrastructure (interstate highways, electric transmission lines, and pipelines) was added in this timeframe. The 1973-1974 price shock and related recession briefly brought energy consumption down.
It wasn’t until the restructuring of the economy in the late 1970s and early 1980s that energy consumption really came down. There were many changes made: cars became smaller and more fuel efficient; electricity production was changed from oil to other approaches, often nuclear; regulation of utilities was changed toward greater competition, thus discouraging building infrastructure unless it was absolutely essential.
The drop in energy consumption after 1991 reflects the fall of the Former Soviet Union. The huge ramp-up in energy consumption after 2001 represents the effect of adding China (with all of its jobs and coal consumption) to the World Trade Organization. With this change, energy needs became permanently higher, if China was to have enough jobs for its people. Each small dip seems to represent a recession. Recently energy consumption seems to be down again. If we consider low consumption along with low commodity prices, it makes for a worrying situation. Are we approaching a major recession, or worse?
If we think of the world economy relative to its critical point, the world economy has been near this point since 1981, but various things have pulled us out.
One thing that has helped the economy is the extremely high interest rate (18%) implemented in 1981. This high interest rate pushed down fossil fuel usage at that time. It also gave interest rates a very long way to fall. Falling interest rates have a very favorable impact on the economy. They encourage greater lending and tend to raise the selling prices of stocks. The economy has received a favorable boost from falling interest rates for almost the entire period between 1981 and the present.
Other factors were important as well. The fall of the Soviet Union in 1991 bought the rest of the world a little time (and saved oil extraction for later); the addition of China to the World Trade Organization in 2001 added a great deal of cheap coal to the energy mix, helping to bring down energy costs. These low energy costs, plus all of the debt China was able to add, allowed energy consumption and the world economy to grow again–temporarily pulling the world away from the critical point.
In 2008, oil prices dropped very low. It was only with QE that interest rates could be brought very low, and commodity prices bounced back up to adequate levels. Now we are again faced with low prices. It looks as if we are again at the critical point, and thus the edge of collapse.
Once a dissipative structure is past its critical point, Roddier says that what is likely to bring it down is an avalanche of bifurcations. In the case of an economy, these might be debt defaults.
In a dissipative structure, both communication and stored information are important. Stored information, which is very close to technology, becomes very important when food is hard to find or energy is high cost to extract. When energy is low-cost to extract, practically anyone can find and make use of energy, so technology is less important.
Communication in an economy is done in various ways, including through the use of money and debt. Few people understand the extent to which debt can give false signals about future availability of energy flows. Thus, it is possible for an economy to build up to a very large size, with few realizing that this approach to building an economy is very similar to a Ponzi Scheme. It can continue only as long as energy costs are extremely low, or debt is being rapidly added.
In theory, EROEI calculations (comparing energy produced by a device or energy product to fossil fuel energy consumed increasing this product) should communicate the “value” of a particular energy product. Unfortunately, this calculation is based the common misunderstanding of the nature of the physics problem that I mentioned at the beginning of the article. (This is also true for similar analyses, such as Lifecycle Analyses.) These calculations would communicate valuable information, if our problem were “running out” of fossil fuels, and if the way to mitigate this problem were to use fossil fuels as sparingly as possible. If our problem is rising debt levels, EROEI and similar calculations do nothing to show us how to mitigate the problem.
If the economy collapses, it will collapse down to a lower sustainable level. Much of the world’s infrastructure was built when oil could be extracted for $20 per barrel. That time is long gone. So, it looks like the world will need to collapse back to a level before fossil fuels–perhaps much before fossil fuels.
If it is any consolation, Prof. Roddier says that once new economies begin to form again, the survivors after collapse will tend to be more co-operative. In fact, he offers this graphic.
Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, "The Thermodynamics of Evolution."
Figure 10. F. Roddier view of what happens on the two sides of the critical point. From upcoming translation of his book, “The Thermodynamics of Evolution.”
We know that if there are survivors, new economies will be likely. We don’t know precisely what they will be like, except that they will be limited to using resources that are available at that time.
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Wed, 02/10/2016 - 19:09 | 7168096gmak
gmak's picture
Basic flaw in the argument.... Loss of cheap oil does not mean that all that has been built before would disappear. It just means that progress becomes difficult. ie the standard of living essentially stops where it is.
Wed, 02/10/2016 - 19:16 | 7168112knukles
knukles's picture
Me Zorg.  Me want petrol for '67 Mustang.  You make petrol.   Or me kill gertbil.  Zorg know it special gerbil form Gere Collection.  Me no care.  Mustang good for picking up chicks at outdoor late nite rock quarry  Rock on. 
Nah... standard of livivng might take a hit, but I don't think it'll get That Bad
Wed, 02/10/2016 - 19:18 | 71681270b1knob
0b1knob's picture
Too long, didn't read.
When do I get MY free Obamaphone, that's what I want to know.
Wed, 02/10/2016 - 19:23 | 7168144Hitlery_4_Dictator
Hitlery_4_Dictator's picture
LOL
Wed, 02/10/2016 - 19:48 | 7168266DownWithYogaPants
DownWithYogaPants's picture
I have to parse her text like the words of an enemy because she is a glo-bull warmer.  Glo-bull warming is a transparent scam and power grab.  She purports it to be true which means she is susceptible to grevious dishonesty OR error.
Wed, 02/10/2016 - 19:34 | 7168200MalteseFalcon
MalteseFalcon's picture
Can't say I read much of this, because Tverberg's articles are typically overlong syllogisms and as such they are tiresome.
And I very much doubt Tverberg expected to see $30 a barrel oil and an oil glut in 2016.
One meme put forward that I viscerally disagree with is that the economic downturn (collapse?) has anything directly to do with oil. 
TPTB would like to say, "everything has gone to hell because the oil ran out.  Blame yourselves for using it all up!!"
This is utter nonsense.  The central planners running the show are incompetent, greedy and venial. 
Wed, 02/10/2016 - 19:35 | 7168201Ajax_USB_Port_R...
Ajax_USB_Port_Repair_Service_'s picture
The same day you cast your vote for Hillary in the Presidential Election.
Wed, 02/10/2016 - 20:40 | 7168512Magooo
Magooo's picture
Or maybe you are too stupid to understand it?
Wed, 02/10/2016 - 19:17 | 7168123balz
balz's picture
Actually, no. You have to take care of the current infrastructure, which takes a lot of energy. So the standard of living declines.
Wed, 02/10/2016 - 19:28 | 7168165NotApplicable
NotApplicable's picture
Entropy, bitchez.
Wed, 02/10/2016 - 19:41 | 7168232Vint Slugs
Vint Slugs's picture
More neo-Malthusian nonsense.  220 years of history has proved the Malthusian theory wrong.  Why should things change now?
Wed, 02/10/2016 - 19:51 | 7168283gdogus erectus
gdogus erectus's picture
Shortage of water? Wrong. Look up "Primary water". Out of energy? Pffft. Look up Tesla. Or deep abiotic oil. (Russia) Out of food? Monsanto is the answer? How about permaculture. Mother Earth provides abundance. It's the fucks at the top who try to make shortages and money from of everything.
Wed, 02/10/2016 - 20:32 | 7168459GUS100CORRINA
GUS100CORRINA's picture
GMAK ... I AGREE WITH YOU ... This argument is incredibly flawed. What a crock of crap. These guys get paid for publishing stuff like this for the rest of us to consume? Hmmm.....
Wed, 02/10/2016 - 19:21 | 7168129atthelake
atthelake's picture
Wood, solar, wind, water asap.
Wed, 02/10/2016 - 19:19 | 7168132NoWayJose
NoWayJose's picture
Another flaw is not accounting for the relative value of the dollar over time or the major changes caused by social media and entertainment. Add on factory relocation and productivity in creating products using improved engineering and robots. The standard of living will fall - but mainly because we can produce more products with fewer workers - basically meaning that there are too many people.
Wed, 02/10/2016 - 19:27 | 7168154Hitlery_4_Dictator
Hitlery_4_Dictator's picture
Population will decrease in step with the credit collapse. Less access to credit means less people. A sad fact.
Wed, 02/10/2016 - 19:52 | 7168286HalinCA
HalinCA's picture
Without access to artifical fertilizer ... most of humanity will die:


Wed, 02/10/2016 - 19:52 | 7168287commishbob
commishbob's picture
Disagree.
Less access to credit means that the educated and informed will reproduce less.
The uneducated/uninformed/Free Shit Army will continue producing like rabbits in heat. 
All part of the Plan. 
Wed, 02/10/2016 - 19:29 | 7168173Winston Churchill
Winston Churchill's picture
TPTB have a plan for that.See Georgia guidestones.
Wed, 02/10/2016 - 19:30 | 7168183Hitlery_4_Dictator
Hitlery_4_Dictator's picture
They did not build FEMA camps for nothing, also jade helm 15 and now 16 is also not just fun and games.
Wed, 02/10/2016 - 19:22 | 7168139gmak
gmak's picture
The other flaw relates to why economies fail.  It's no secret.  Whenever you have borrowed more from the future than can possibly be paid back by any reasonable or expected economic growth; At that point - the zero point on the margin - the collapse begins.
Wed, 02/10/2016 - 19:21 | 7168140e_goldstein
e_goldstein's picture
Or we could divert all the money being spent on spying on Americans/ killing brown people and invest in fusion research...
Lot less money for the O-MIC, lot more fun for humans.
Wed, 02/10/2016 - 19:25 | 7168152noone5
noone5's picture
What a giant waste of time writing this long article of nonsense.
Wed, 02/10/2016 - 19:29 | 7168177Yen Cross
Yen Cross's picture
  There's so much excess capacity in the system.  From financials to services, and into commodities, because central banks have encouraged wreckless spending for yield seekers.
 Lets talk about the real problem... Misalocation of capital, hidden inflation -- healthcare, student loan debt, wage stagnation, loss of productivity/manufacturing jobs, entitlements, ect... I could go on for hours on this topic.

Wed, 02/10/2016 - 19:50 | 7168273Pareto
Pareto's picture
YC.

Can we have permission to just replace this long winded pile of shit article with your"Lets talk about the real problem... Misalocation of capital, hidden inflation -- healthcare, student loan debt, wage stagnation, loss of productivity/manufacturing jobs, entitlements, ect... I could go on for hours on this topic."

Because as noone5 below points out - bless him, the only greater
giant waste of time writing this long article of nonsense.

was fucking reading it!!
Wed, 02/10/2016 - 19:39 | 7168223Chuckster
Chuckster's picture
I will agree with the last two sentences of the article.  I lived thru "peak oil"...."peak debt".....now I'm waiting for "peak toilet paper".   People been brainwashed for 50 years with the phrase "peak oil".  It's extremely hard to remove that thought from their mind.  "Saudi Arabians are our friends" is another learned phrase over a long period of time.  I think we are about to enter a strange new world.  It's going to be one hell of a reset.  I would like to think peoples morals will also get reset.  In the 1930s people all felt they were in it together and most tried to help each other when they could.  Can you see that happening now?  Attitudes have changed.  Think about roving armed gangs.  They will exist now.  Law enforcement may be gangs.
I just watched Mad Max Fury Road and they seemed to get along (energy wise) just fine. Ha!
The thought that keeps coming back into my mind is that when the collapse hits....the best one can do is band together with a group of neighbors.  A group will be mandatory for survival.  Most parts of the country (cities) will require groups.  There are a few exceptions where people can be self sustaining. 
To agree to everything in the article is to go back to Jimmy Carter days.  Drive 55mph max. because we are running out of oil...maybe tomorrow.  Al Gore who wants to make a $trillion off global warming.  Banks who want war.  Oby sure gave us hope.  The list is endless.
Wed, 02/10/2016 - 19:43 | 7168243homebody
homebody's picture
What a long way to say that a reduction of 80-90% of the population must take place to balance energy, food, water against consumption to sustain life over the long run.
Wed, 02/10/2016 - 19:49 | 7168270Chuckster
Chuckster's picture
Didn't the Germans have an answer to this awhile back?  There are countless energy sources becoming available.  Overproduction is currently a way larger problem.  Japan learned takes several decades to get the normal economy restored.  One would think the rest of the world would have been watching and learned.
Wed, 02/10/2016 - 19:53 | 7168291homebody
homebody's picture
If over population with regard for food, shelter, water could be addressed by new energy sources alone, all 9-10-11  billion of us could survive 
Wed, 02/10/2016 - 19:48 | 7168265skbull44
skbull44's picture
Infinite growth on a finite planet...what could possibly go wrong?
Wed, 02/10/2016 - 19:50 | 7168277Bunga Bunga
Bunga Bunga's picture
Just count Twitter tweets, free apps downloads and watching TV as GDP, boom!
Wed, 02/10/2016 - 19:51 | 7168282conraddobler
conraddobler's picture
It's actually a devastating article it pretty much says we're fooked.
He's mentioning in there IF there are survivors.  I realize it's long but trust me I have a wee bit of experience sorting the wheat from the chaff here he's basically saying that this could well on get completely out of hand.
Most of us tend to have normalcy biases built around our lives we've all grown up in a world that can't exist becasue well it isn't sustainable.
A lot of us including me think we know what that means but as per the article we really do not know what that means. 
It means in essence a mass conversion back to subsitence farming from what he's saying.
Now don't get me wrong I find it unfathomable to believe he said that but that's more or less what he's saying.
Think about it logically and I have for quite some time, the system is so complex and so interwoven that those who have are not going to be willing to stop off at some lower sustainable level that is higher for all.
Nope people will claw and fight tooth and nail to keep what they have and it'll push the sustainable set point down much farther than any of us now are imagining.
There is a reason the rich built all those bunkers.

Wed, 02/10/2016 - 20:23 | 7168423hongdo
hongdo's picture
I'll take you word for it that you read it all.  So you think it predicts the fall of the Roman empire redux?  I would think the Windup Girl world is more probable but who knows, an asteroid could hit, nuclear war could start, cold fusion could work, the horse could sing.
Wed, 02/10/2016 - 20:05 | 7168344GeoffreyT
GeoffreyT's picture
This 'fixed technology' bullshit - making speculative but declarative statements about limitations predicated on the assumption of little or no change in the technology underpinning economic activity - is the hallmark of dilettante (journalistic) understanding of economics and of production.
Oil is the only energy source? For someone who claims to grok physics, the author has no fucking idea about technological change.
It's as stupid as asserting, circa 1850, that it is impossible for man to cover ground as fast as a horse because man only has 2 legs.
I've seen stuff that's almost as bad - like fucktards who think that in order to build an AI that will surpass human-level cognition, it will have to be constructed along the same lines as a human brain.
To understand why that's retarded... ask yourself: what is the right answer to 'How can I move much faster than a horse?'
It is absolutely not "Grow two more legs, and a mane, and eat lots of grass."
The right answer is "Dig up some special dirt, melt it, cool it, and press or mold it it into a variety of shapes, and put those shapees together into a bigger shape that looks nothing like a horse. Then dig up some brown ooze, refine it, put it in a receptacle within the new non-horse-shaped thing. Then progressively-explode the refined brown ooze under pressure, and capture the released energy through an ingenious system of cams and shafts. Use less-refined brown ooze to make sure that shit doesn't stick together when it gets hot."
Funnily enough, that's almost the same answer for "How do I fly faster than a falcon, and farther than a migrating goose?".
Answer: "Dig up some different types of dirt, melt it, cool it, and make a tube out of it. Fill the tube with explosives refined from different ooze, and explode the refined ooze."

USE TECHNOLOGY. INNOVATE.

Humans are a now trechnological species, first and foremost. We understand quite a lot about the planet we live on, and a fair bit the universe in which the planet is situated. We understand quite a lot about the local (i.e., planetary, resource) constraints under which we operate, and we understand quite a bit less about broader physical (in the sense of 'to do with physics') constraints.
Even the most speculative forms of theoretical physics is quite 'conservative' in what it will accept: physics as we currently understand it, almost certainly assumes more constraints than will eventually prove to be the case.
With that said... the amount of energy that is floating around uncaptured by our current technology, is staggering.
I know this sounds New Age-y, and it annoys me that the internet abounds with the (citation-free) assertion that Feynman and Wheeler 'calculated' that there is sufficient energy in a seemingly-empty coffee cup, to boil the world's oceans; usually this reference is made on hippy-dippy sites plugging ZPE ('zero point energy') as something currently-accessible (which it's not).
However one thing in irrefutable: zero-point energy exists and is absolutely abundant. We cannot currently harness it, but doing so would not violate any of the known laws of physics - in other words it is not 'unharnessable'... which means that we will learn how to harness it.

In the same way, APM (atomically-precise manufacture) does not violate any known physical laws, and will, once implemented, reduce the energy requirements of manufacture by a factor of (roughly) ten thousand. So eventually it will be a thing, and the cost of manufactured goods will fall to near-zero.
Feynman gave a lecture on this in 1959 called "There's PLENTY of Room at the Bottom" - he forecast integrated circuits in that lecture, and guessed that you should be able to etch the contents of an Encyclopaedia on the head of a pin without serious technological challenge (and by using a 7-bit encoding, you could fit all of the book in the world in a cube a quarter-inch across).

We will have APM; we will have Strong AI (which will arise from something that is radically different from a human brain in both its structure and its function); we will have zero-point energy (not in a hippy-dippy way); we will go past the Singularity - and we will do all those things in my lifetime.
Literally the only caveat to this, is that the parasite political class might weaponise the technology first. This is why they have to be got rid of - non-violently if possible, but violently if necessary.

And OIL? Who the fuck cares? It's not going to matter a fucking iota within a generation; we will be dragging CO2 out of the atmosphere in order to recover the carbon to build shit with (by the by - that's why 'carbon emissions' would not be a problem even if it's true that human carbon emissions cause climate change: but it's not true anyhow).
Wed, 02/10/2016 - 20:18 | 7168396Chuckster
Chuckster's picture
GeoffreyT! WOW!
Wed, 02/10/2016 - 20:12 | 7168368are we there yet
are we there yet's picture
Peak oil and similar lines of thought have lost their credibility. Societies largest burden is its dygenic breeding incentives of people of low intellect and productive value. Think of the movie 'IDIOTOCRACY'
Wed, 02/10/2016 - 20:13 | 7168373cougar_w
cougar_w's picture
This whole shit show is about to blind-side a bunch of people. In fact about 5 billion people.
Wed, 02/10/2016 - 20:15 | 7168383SelfGov
SelfGov's picture
That's right. There are limits to what can be produced. That makes it immoral to have way more than you need.
Wed, 02/10/2016 - 20:16 | 7168385taketheredpill
taketheredpill's picture
Instead of Teslas the douchebags will have buggies pulled by thoroughbreds. 
Wed, 02/10/2016 - 20:17 | 7168391hongdo
hongdo's picture
Eh?  Did this article make any sense?  I stopped reading when energy, debt, labor, etc got all mashed up into unicorn poop.  Did I miss something amazing?
Wed, 02/10/2016 - 20:35 | 7168476Kirk2NCC1701
Kirk2NCC1701's picture
In the long run... The world (and its latest crop of humans) learns that Real Money is backed by Real Assets.
All good Ponzis come to an end.  Even the Fed-Ponzi.
Wed, 02/10/2016 - 20:42 | 7168519Magooo
Magooo's picture
Or in other words:

HOW HIGH OIL PRICES WILL PERMANENTLY CAP ECONOMIC GROWTH
For most of the last century, cheap oil powered global economic growth. But in the last decade, the price of oil production has quadrupled, and that shift will permanently shackle the growth potential of the world’s economies. http://www.bloomberg.com/news/articles/2012-09-23/how-high-oil-prices-will-permanently-cap-economic-growth

BUT OIL COMPANES NEED $100+ OIL
Steven Kopits from Douglas-Westwood said the productivity of new capital spending has fallen by a factor of five since 2000. “The vast majority of public oil and gas companies require oil prices of over $100 to achieve positive free cash flow under current capex and dividend programmes. Nearly half of the industry needs more than $120,” he saidhttp://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11024845/Oil-and-gas-company-debt-soars-to-danger-levels-to-cover-shortfall-in-cash.html