In the first of a two part series Murray Grimwood, aka commentator Power Down Kiwi, outlines how important energy is to everything we do & its limitations

In the first of a two part series Murray Grimwood, aka commentator Power Down Kiwi, outlines how important energy is to everything we do & its limitations

By Murray Grimwood*

We don’t do anything without using energy. Don’t eat; you die. Don’t fill the tank, your car dies. Don’t feed ‘the economy’ with energy, your economy dies (or becomes virtual). Which suggests that dollars are underwritten by petajoules, not the other way around. In this first part, we’ll examine energy to date. Part two will look ahead at future options.


We started with no energy-surplus at all – hunter-gathering, hand-to-mouth. We got better – storing surpluses for times of shortage. We got even better using fire (via solar-derived energy, stored in trees) which alleviated some of our digestion-demanded energy. Eventually we organized agriculture and our social structures so we had bigger energy surpluses, releasing some folk to specialise in non-energy activities – art, writing, education, leadership. Most of our energy – surpluses included - was in the form of food which fuelled human and animal labour.

Human ‘productivity’ depends on how much energy is spent producing stuff versus how much is spent consuming it. Hence, moves toward ‘productivity’ always involve less pay (less ability to consume) for the labourer - the ultimate expression of which is slavery. The dominance of male over female also had its origin in the times when human muscle-power meant the difference between surplus and death, indeed it can be argued that access to excess energy has enabled equalities of all kinds.

Solar-derived energy underwriting human/animal work was largely the case until fossil-fuels became harnessed around 200 years ago, kicking-off the Industrial Revolution. At the time, most of its one billion inhabitants thought of the planet as being infinite. They burrowed into this underground bonanza as fast as they could, going for the best-stuff first, little caring that it was just a one-off store of ancient solar energy.

A rapid evolution of technologies applied the new, compact, powerful energies to everything from clothing to agriculture to transport. Coal/steam turned to oil/internal-combustion. Both drove electricity. Within a century, we were using fossil fuels efficiently enough to power flight. Within two, human labour was contributing less than 1% of all work done (and a goodly percentage of that labour was fossil-fuel-fed).  William Jevons was the first to notice a trend induced by technology – one which is of no use to us at all. Now known as the Jevons Paradox, he noted that efficiencies led to more consumption, not less.

But technology is always impotent without energy in the tank and the laws of physics – more pertinently the Laws of Thermodynamics, always applied. We’ve never got away from cooling-fins, compressors or radiators, never beaten the Laws. It will always take energy to do work, it will always take work to accomplish anything physical.

Energy return on energy invested

As stated, we tapped into the best, first. This is an important point, overlooked by almost every commentator. We went for the closest, the shallowest, the most useful, the most compact fossil energy, first. The best anthracite coal was burnt before any of us was born. The supply of the light-sweet-crude oil we prefer, plateaued a decade ago. Coming on stream are fractured-rock sources, tar-sand derived sources, deep offshore sources; ever-worsening as we go.

If the trend is overlooked by most commentators, the problem it presents is overlooked universally. The problem is that it takes energy to obtain energy. As the obtaining process gets harder to do (fracking, shifting mountains to get at coal, turning tar-sand gloop into what you expect at the pump) you’re going to have to sacrifice more of what you get, to get it. In other words, your available energy – and thus your available work – becomes an ever-lesser proportion of the quantity of every ‘next’ source.

The ration of useful energy available, versus the energy it took to obtain it, is termed EROEI – Energy return on Energy Invested. In Nature, this ratio is everything; no life-form can survive if its ratio is negative. If a wolf chases a rabbit, the eating of the rabbit has to return more energy that the chase expended – or the wolf dies. EROEI is why trees shed leaves and bears hibernate – to survive the winter period of low solar energy. It explains why the wolf chases the fattest rabbit, it explains post-battle cannibalism. It also explains why we don’t sequester the CO2 we leave behind us on the highway – to collate the CO2 and pump it underground, we’d have to divert a significant chunk of the energy we use.

It is generally reckoned that we started into fossil energy at an EROEI of around 100:1, currently we’re dropping into the ‘teens.  At 1:1, no energy will ever be extracted, no matter what the price. (This seems hard for some folk to grasp – one commentator even suggesting you could ‘exchange cheaper energy for more expensive’. All I can say is that if you paid for an education which left you thinking like that, I’d ask for my money back. In full jerry-cans).

Peak oil

At some predictable point, the growing of our rate-of-extraction of fossil energy had to cease – this is true for all finite resources. The first to contemplate this formally was Hubbert – here critiqued with hindsight.

The squeeze comes on when you are about half-way through the volumetric resource, exacerbated by the reducing quality of what remains (reducing EROEI, in other words). This debate got muddied a decade ago – light sweet crude hit a plateau as predicted, but suddenly ‘oil’ seemed to include tar-sands, shale, bio, coal-to. These inclusions all keep kicking the volumetric can down the road, but due to their reducing EROEI, the required resource volume is increasing exponentially. Energy studiers have called it the Red Queen phenomenon – we’re running ever-harder to stay on the same spot.

Oil discoveries peaked globally in 1964 and given that you cannot extract what you have not discovered; the trend is pretty obvious. According to Rystad, less than 7 billion barrels of conventional oil equivalent was discovered in 2017, the lowest since the 1940's and enough to replace just 11% of global oil and gas production last year. If you want to go deeper into the topic look at this.

(source: ASPO)

Peak everything else

Putting variables (like efficiencies and triage) aside, peak energy-supply means peak work do-able. But it gets worse than that – to extract other minerals involves shifting ever-more ‘overburden’ per ton recovered, using fossil energy of ever-lowering EROEI to do so; a compounding whammy. The same goes for what we’ve built – a never-bigger collection of infrastructure, all of which represents expended fossil energy. That collection is all ageing, a process which requires more and more energy be directed at maintenance or replacement, as time passes. Energy which is being increasingly contested.

It would appear that we’ve arrived at the inevitable stage where the energy required to develop the next energy extraction, ‘costs’ more than society can ‘afford’. Above a certain inflation-adjusted level – around US$80 to US$90/barrel it seems – ‘economies’ go into ‘recession’. Even though they’re counting only one side of the ledger, racking up arguably unrepayable forward bets (debts). Money aside, technology (fracking, water-injection, horizontal drilling) is not keeping pace with demand any more.

Yet we are still building, selling and – for now – buying, technologies reliant on the plateauing energy-source. For every EV sold, more than 50 fossil-powered vehicles leave the sales-yards. We have to ask how many of those will become stranded assets before their design life is over. As well as the tractors, diggers, planes, boats – all being turned out for sale with fossil-fuel-requiring power-plants.

Accounting for energy


(source: Our Finite World).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          What if we unhitch GDP from energy-use? Perhaps the prior question should be: Is GDP a useful measure? GDP doesn’t recognize deferred maintenance, which is exactly what happens when ageing infrastructure meets dwindling energy-availability and is one of only two explanations for any recent de-coupling (the other being ‘virtual’ trading, including upping the ‘value’ of existing energy-imbedded items). A recent treatise even cites our own PM in this regard.

Growth-rates, numbers and implications

I have kept away from minutiae figures here, deliberately. When exponential growth curves are concerned, the ‘doubling’ phenomenon renders all observation pointless – it’ll happen soon even if it isn’t happening now. And when two exponential trends cross – as with EROEI trending down and finite-resource extraction trending up – soon just happens sooner. If your societal and infrastructural constructs depend on continued net energy availability, you’d better have your Plan B infrastructure in place before Plan A runs its course. Arguing about a decade or two, is worse than pointless. That infers that we have to go with ‘known technology’ (in a nice turn of phrase Heinberg calls the alternative: ‘Waiting for the Magic Elixir’). Statistically, depending on the yet-to-be-invented/proven is a game of Russian roulette; it’s just a matter of time and the problem will be never-bigger when it happens. Our Parliamentarians have no excuse for not having matters in hand.

The logical questions (covered in Part 2) are: Can we continue doing what we’re doing, in daily-effort terms? And: If not, what is our best course of action, over what time-frame?

*Murray Grimwood's other recent articles for can be seen herehere & here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Word-search 'Nuclear' - zero matches.......

Why would there be? It's the most expensive and the most dangerous form of generation - it had its heyday in the 1960's and failed to dominate. How much will the Fukushima disaster cost once its all said & done? $100 billion? $1 trillion?

Thorium nuclear is interesting but still fails the economics test against renewable solutions - solar, wind, geothermal & hydro + storage.

The whole point of the article is that it's not sufficient to just generate energy - it has to be affordable enough that the surplus can be used to create wealth. Just spending $1000 to find $1000 of oil is net zero gain and leads to flat productivity.

The most dangerous form of generation is actually coal, at least in terms of death per unit of energy - numbers below from one of many pages returned from a simple Google search.

Major incidents like Fukushima stick in the mind, a bit like aviation disasters, but they account for comparatively few deaths.

Energy Source Mortality Rate (deaths/trillionkWhr)
Coal – global average 100,000 (41% global electricity)
Coal – China 170,000 (75% China’s electricity)
Coal – U.S. 10,000 (32% U.S. electricity)
Oil 36,000 (33% of energy, 8% of electricity)
Natural Gas 4,000 (22% global electricity)
Biofuel/Biomass 24,000 (21% global energy)
Solar (rooftop) 440 (< 1% global electricity)
Wind 150 (2% global electricity)
Hydro – global average 1,400 (16% global electricity)
Hydro – U.S. 5 (6% U.S. electricity)
Nuclear – global average 90 (11% global electricity w/Chern&Fukush)
Nuclear – U.S. 0.1 (19% U.S. electricity)

Coal more dangerous, yeah nah. Only if you grossly understate the cancer yield from all the radioisotopes released into the environment. It's still not safe to eat wild mushrooms or game in the entire state of Bavaria because of Chernobyl.

I'm guessing those food safety levels in Bavaria are rather similar to the "meth house" levels we were using here in NZ... A rediculously low number that's just completely disconnected from actual health effects. Do the same restrictions apply in Poland or the other countries that are far closer to Chernobyl?

no they're not the same. Internally ingested radiation and hot particles are a different kettle of fish. Incidentally, I was the first to say the meth house contamination was a pile of rubbish.

No health hazard associated with consumption of usual quantities
One single meal with more heavily contaminated wild mushrooms can contain more caesium-137 than consumers of food from agricultural production would ingest within one year. However, consuming usual quantities of self-collected mushrooms does not necessarily imply negative health consequences due to the content of radioactivity. Nevertheless, the Deutsche Gesellschaft für Ernährung (German Food Association) recommends also for other reasons to limit consumption of wild mushrooms to 250 grams per week because these may accumulated toxic heavy metals such as lead, mercury and cadmium.


The consumption of 200 grams of mushrooms with 3,000 becquerel caesium-137 per kilogram results in an exposure of 0.008 millisievert.
This corresponds to the radiation exposure during a flight from Frankfurt to Gran Canaria.

For reference, a CT scan of your pelvis is ~ 10 millisievert, so 250kg of mushrooms roughly equals 1 cat scan, or to put it in other terms 10mSv (or 250kg of the most radioactive bavarian wild mushrooms) is equal to three years of normal everyday background radiation exposure.

So yeah, really does seem like hyper-paranoia factor like the meth testing numbers to me.

David - the new 100 word feature seems to have a problem with blockquotes, particularly with several in a post, and turning two smaller blockquotes into one large blockquote made it worse, all the text after teh first blockquote disappeared.. does it try to apply the 100 word limit inside the blockquote?

Well that's the problem - the conventional dosimetry models don't distinguish between external and internal radiation exposure and I dont believe them. When you consider at the inverse square law, how can a hot particle or Cs137 (which has extremely high specific activity). How can they not be irradiating and mutating surrounding cells. Just common sense. ICRP has vested interests

First conspiracy theory of the weekend.. and only halfway thru my first coffee.

Problem with conventional nuclear is a) the long term disposal of even what we have as waste from the plants we have is a huge problem. b) The costs to build new are horrendous and risky. c) The amount of uranium is actually quite limited.

This means we need to go to Thorium but too many vested interests are sabotaging that right now.

Fukushima, just consider increasing the number of plants to replace coal and oil that would be needed and then the inherent risk multiplier that goes with it.

I believe it’s true to say all power comes from the sun in one form or another. So we could cut out the minimum. It’s possible to get a net gain directly - see plants as a proof of concept. It’s just a question of manufacturing efficiency, something we get better at every day.

If you want to cut out the middle man be serious and build a Dyson Sphere. We would have more energy than what we know what to do with, and we'd laugh at our current civilisation.

It’s just a big solar panel and just a tad beyond our current engineering capability.

We already do have more solar energy than we know what to do with - our collection methods are simply underdeveloped & inefficient.

Somehow people equate cloudy days with zero energy output - just ask the plants if that's true.

Actually I think you are not allowing for expotential growth.

"why confine ourselves to the Earth, once in space? Let’s think big: surround the sun with solar panels. And while we’re at it, let’s again make them 100% efficient. Never-mind the fact that a 4 mm-thick structure surrounding the sun at the distance of Earth’s orbit would require one Earth’s worth of materials—and specialised materials at that. Doing so allows us to continue 2.3% annual energy growth for 1350 years from the present time."

The 3 roots (or fundamentals) are land, energy and labour.

Interesting article but It's a shame it's limited to only one type of energy. Sure fossil fuel energy has been the main energy for the last 2 centuries but there are cleaner and easier to harness energies available like solar, wind, tidal etc which are still in their infancy. In time we will be able to extract these energies much more efficiently to replace fossil fuel.

..."here are cleaner and easier to harness ..."

LOL .... So the reason we arent is that we want to do it the hard way?

The reason we use fossil fuels is
- lower cost
- they pack a punch way higher vs diffuse sunlight / intermitent wind / rusty tidal
- ease of use/portability/storage/
- they fit our EXISTING infrastructure

Everything else sits on the back of fossil fuels ... we are soaked and totally dependent on them.

h&e Did you not read my comment in full or do you not believe in human progress?

"...which are still in their infancy. In time we will be able to extract these energies much more efficiently to replace fossil fuel."

H&E and PDK cannot believe in a non Malthusian dynamic.
To do so would ruin their arguments.

Good old Nymad. Really adding your insight to the discussion again
First move - attack the messenger ...
2nd step. Hmmmm.. all out of moves

It's true though, isn't it?
In order to think the way you do, you must be strictly Malthusian...
And I'm saying that's where the fatal flaw in your arguments can always be traced back to.

Nymad - read my Malthus quote in the first article again. Then again slowly.

Malthus is actually the fatal flaw in your argument, not mine. Your argument (I presume you're arguing that unlimited progress is possible?) requires a flat Earth, or a re-write of the Laws of Physics. Although I guess we can argue that the former requires the latter......

Malthus considered the world exactly as you and H&E do - a finite environment without technical innovation. He argued that evenually capital (resource) would be spread too thinly over the population base, limiting longevity or productivity.
Hence why I have always directed you to Kremer.

Again. I don't argue for an infinite planet or resource. I argue for a near infinite scope for technological innovation. This is where you go wrong.
Your insistence on always going back to "1+1<>3" misses the point everytime.
As I say. Understand the economics and you will understand the reason why, despite your blogger beliefs, no economist believes resources are infinite.

technical innovation? how exactly with exponential growth to content with does technical innovation make the world flat?

No economist believes? really? yet in their actual models this is exactly what most believe (except maybe Steve Keen but even that is outside of his minsky model)

Point me to a model that relies on infinite resources.
Do go into the detail, because I will be quite interested in seeing exactly how you understand the models.

That's where we difer - as I point out, technology can only be applied to real stuff, and the Laws of Physics apply. So it's not 'near infinite', it's 'a path of diminishing returns'.

That's why a Productivity Commission. The returns of the WW2-1970 span are simply not with us anymore. And aren't coming back.The physical restraints are taking effect. Get used to it - you're living through the time where technlogy - as applied to energy (both harnessing and use) is getting near it's limit.

There is no growth without growth in energy use. What part of that cant you understand?

To counter YOU need to explain (again ... sigh) why we need such a build up in Debt growth if this rule has been broken ? (remember - Debt is just a proxy for actual resources...)

Firstly. Debt is a proxy for productivity.
Productivity can be increasing in decreasing resource per capita.
Productivity is related to resource access, but it is not a proxy for.

Energy use and GDP growth are endogenous.
As in it is almost impossible to disentangle the two. The only ones who seem to be able to do so are your blogger friends by using spurious correlations and questionable methods.
In case you don't understand this - it means that statistically there exists a reverse causality between the two which cannot be disentangled easily.

Secondly. Of course there is growth without an increase in energy usage.
That's my whole point. You and PDK are stuck in this notion that technological advancement is non existent. The often quoted Jevon's Paradox is proof of this - the more efficient we become (woah! growth without and increase in resource use) implicates greater resource usage due to oversupply.

No, debt is an iou for future work, or energy. Second almost invariably in the physical world an increase in human productivity is achieved by swapping in another form of energy that is more NET effective. So the energy source can be more expensive as long as the gain outweighs the cost to use.

If you look at the entire growth of GDP there has always been a corresponding growth in energy use. There is absolutely no evidence this has actually changed. Except maybe the claim over the last decade, but really when the growth has been in over-valuing assets as a fiddle for GDP I have to question that one.

And future work isn't productivity?

"Second almost invariably in the physical world an increase in human productivity is achieved by swapping in another form of energy that is more NET effective."
So. Ahh. Computers....That sort of throws a spanner in the works of that argument.

"If you look at the entire growth of GDP there has always been a corresponding growth in energy use. "
Yes. Steven. Because like I said, the two are cointegrated. Highly cointegrated. They are endogenous - you can't disentangle the two.
Also, GDP - what does that measure. Is it perhaps highly influenced by population growth?

I know you are an expert at reading blogs, Steven, but sometimes you need a little more sense than that.

"Firstly. Debt is a proxy for productivity."

So productivity is failing then given the debt growth?
Which must mean your tech is failing to outrun diminishing returns.

No. If debt is growing, it must mean productivity is (expected to be) increasing.

So no productivity growth issues then?

That would explain why our natural resources arent feeling any pressure.

You sure, Nymad?

Could your debt not just take longer to repay at a static work-rate? As long as you didn't take on ever-more in the process, of course.

Or even longer at a lower?

And even longer if interest-rates went permanently negative?

So PDK, H&G's and myself (to name but 3) follow the math, physical laws of the universe and science, and you follow what exactly?

Not much you simply "believe" there is an unknown alternative some unknown discipline that is not maths, science or engineering will hand to you on a plate at a price you can afford.

I think its called magic, good luck with that one.

Magic, like discovering fossil fuel can be used to produce energy a few centuries ago.

I think the difference between you, PDK, H&G and Nymad and I is that you don't believe in what doesn't yet exist whereas we have faith that man's resourcefulness and the infinity of the universe will yield all the energy needed in the future.

...:" you don't believe in what doesn't yet exist..."

This is called wish science.
Not the most robust economic model.

so they are not easier then?

They are anything but ïn their infancy .... its been 20 years now with pitiful impact .... & we are now out of time to wait

Meanwhile China looks back to coal...

as Saudi goes cold on solar

Yvil - I for one, don't 'believe in human progress'. I see a progress to date, but I see it being underwritten by things which have very real limits.

Ronald Wright's readable wee 'A Short History of Progress' might do for you. He coins the phrase 'Progress Trap'. Worth some thought.

And 'extract these energies much more efficiently' doesn't make much sense. Fossil fuels gave us a compact, one-off kick in the butt. We squandered them, in hindsight. The replacements are a long way short of being as convenient. Read my next piece on energy, for more.

I should add I also dont subsribe to the Human Progress myth.
We are as bound by the laws of physics as we always were.

Well we are in agreeance then, please see my comment above starting with "Magic" posted a few minutes ago at 15:15

I definitely believe in human progress, I'd far rather live now in a warm cosy house with electricity than 200 years ago when I could die from a cold
I also believe that there is so much mankind doesn't know yet and to me, believing we are limited by the laws of physics is like believing the earth is flat or that man cannot fly or that we cannot see an image of something on the other side of the world

Err, there is no doubt we are limited by the laws of physics. We might not have a complete understanding of the laws of physics, but we are certainly constrained by them. F=ma is not an approximation, it is a physical reality. There may be forces we haven't detected yet, but that is getting less and less likely as time goes on and our knowledge expands.

The progress is purely improved leverage of energy sources at his disposal ... something we appear to be stalling on - which is exactly the whole point.

Man cant fly - he can just use fossil fuel to propel a carrier ... and you can only see a digital replication of something on the other side of the world - its only pretend.

This is a good article to bring the progress narrative back to earth ...

Fun article Murray, all the concepts were lucidly explained. I'm definitely looking forward to the next one.

This who article assumes that converting stored energy in fossil fuels to heat will continue to be our main form of using energy in future. The moment electricity and its applications were discovered, a new prospect was opened up for the future of human beings. We already have methods to convert solar and energy from moving forces into electricity. I understand that currently a large portion of work that is needed (i.e. energy spent) to enable such energies being harvested is fueled by fossil fuels, but this percentage is likely to change. It is possible that the energy harvested directly from the sun, wind, running waters, geo thermal etc. has a reasonable positive EROEI even if we are not yet there.

Sort of correct. The thing is the EROEI of renewables like wind is good enough for many things, but not globalisation on the scale we have now. Example mass air freight and cargo ships are very likely to never work (affordably) without fossil fuels. Here the word affordability is key, as we saw in 2008 when oil got to $150US a barrel the world went into recession and has never (so far) recovered.

If we create space borne solar panel arrays we can generate much more power than we currently use. The reason we don't currently do this is the return is too low to compete with fossil fuels being extracted out of the earth. But once the fossil fuels become more expensive, we transition to space borne solar and can gain much lower cost energy long-term.

Erm, without the worlds longest and strongest extension lead how exactly are you getting power from space borne solar panels to the ground where it is useful?

Perhaps stick to things that are feasible?

There is a theory around beaming it back. Same goes for solar panels on the moon. But you don’t need to go that far, plenty of room for panels on the earth, just need to get the price down and the price of storage. And there has been a lot of progress on this over last 20 years.

Couldn't agree more. But I do like picking holes in these lala-land ideas that people come up with.

The advantage of space borne solar is that it does not require the storage problem to be solved and it is essentially limitless in its expansion potential.

No, you've replaced the storage problem with a transmission problem.

Edit: and you actually haven't solved the storage problem either. What happens when the solar array is in the shadow of the earth?

As someone has pointed out below, electromagnetic radiation travels through space - the transmission issue is solved "just fine".

We should not place the solar array in the shadow of the earth. For instance you can see the moon at night and only occasionally does the moon get eclipsed.

The problems are it costs an awful lot to get the thing installed and to engineer the thing well enough to ensure it will survive.

Right, so somehow you are using solar panels to convert electromagnetic radiation to electricity, then back to another form of electromagnetic radiation (Radio? microwave? Xray? what?).. then beaming it down to earth. Apart from the obvious huge inefficiency of this approach (which I guess doesn't matter in the physical sense if you have unlimited free energy to start with, but the economics of getting thousands of sq kms of solar panels into orbit might matter to whoever you expect to pay for it)

1) how do we beam multi megawatts of electromagnetic energy to earth. What are the transmitter and receiver? Can you point to an example thats worked over a measly 10km for even 10kW (at the receiver end) power?

2) If the solar array never goes into the earth shadow, then its not geosynchronous.. so the receiver station that you are beaming down to keeps moving out of range of the solar array.. so the same problem, just at the other end of the system.

Sorry, solar panels in space are great for things that are in space and connected by wires to the solar panels, but solar panels in space aren't going to work for things on the ground.

The Japanese Space Services has a project in place for space borne solar by the 2040s, with microwave transmission to earth.

Interesting, ambitious. Might even be feasible and economic in 50years or so.

Oil is expected to run out in 2060 - 2080, if these windows match up we can be optimistic about the future.

So right now it arrives to us here "beamed" for free so zero cost to install and zero cost to maintain and 0% risk of failure.

The numbers I have seen suggest we can cover a substantial part of the world's surface affordably so I just cant see the point of this idea.

In terms of storage need we are going to have to get more intelligent and pragmatic in how we generate, store and use energy. We seem to assume we can just do what we want in any way we want rather than working within what the earth can provide which was how it was pre-industrial revolution. This does not mean we go back to living like we did in the 18th Century not if we are savvy about it, which we are not being at the moment.

The point of the argument is to smash strange Malthusian prognostications that we are inevitably limited to some arbitrary energy factor bounded by the confines of the planet. If people start down that route they tend to wind up debating how much of the population needs to be culled.

The more practical point of the technology is there are several competing uses for limited terrestrial land area on which we could position solar collectors, but space is literally infinite. Though in terms of solar energy space is limited to the volume inside an Astronomical Unit from the Sun, so not infinite just really really big.

How do you think energy gets from the sun to the earth? Do you think there is a super massive extension cable? Do you lay awake at night worrying that someone might unplug the planet?

Electromagnetic radiation travels through space just fine.. but every solar panel I've ever seen has been connected to something with a couple of wires. How are you going to get your wires from the ground to orbit and keep them connected, or what are you going to replace them with?

I've always believed that the dominant technologies come about as a result of the easiest energy source on hand and are thus by this factor naturally inefficient because they don't have to be till the easy stuff runs low. Having said that, energy is boundless, it never disappears it just changes form. Human kind is... reletively speaking... still dragging its knuckles in terms if realising how much easily accessible energy is right infront if us. The trouble is we always have to monetise it and then it gets expensive and nothing why not commit to free energy instead?


Once again, thank you for an excellent read. All information that gets you thinking critically is wonderfully valuable in an age where so many little things can distract your attention. Your efforts are greatly appreciated.


Murray, debt is a claim on the future, the 25.5 trillion of debt in the USA is nothing more than borrowing off the future assuming it will be bigger than today.
The reason we have this resource problem is because we borrow money created by banks that we have to pay back with real effort and resources. The more debt the more you need to promise the future. The problem is in the banking industry, they create debt as money and we work out tails off to pay the interest and the capital back, at which time the mortgage is extinguished. The work often entails using resources poorly and valuing them in very short term timeframes.
If you can buy real things with paper money then are there no limits, as long as someone accepts that paper as good as gold you can print and consume limited resources EROEI is meaningless when you can use paper wealth to do the numbers, paper created as debt with a claim on the future.

Great article, i can already see the shift in talk towards EV cars, solar panels & batteries. Problem is the payback on these is not a 'done deal' yet.

It would be very interesting to follow what Norway is doing with their massive push to EV's. As of March EV's made up 37% of new car sales, they want that at 100% by 2025. They are doing this on the back of a very large oil production sector tho.

A couple of quick questions...

How do you disentangle the endogeneity of GDP and energy (and, in particular, fossil fuel exploration)? That's pretty essential to the unsubstantiated assertion that "Above a certain inflation-adjusted level – around US$80 to US$90/barrel it seems – ‘economies’ go into ‘recession’."
Also, how do you explain the decoupling of GDP and FF consumption growth in rich western nations over the past 15 years? Is this perhaps a lower reliance on such energy sources? - As also shown by your graph.

It is generally reckoned that we started into fossil energy at an EROEI of around 100:1, currently we’re dropping into the ‘teens. At 1:1, no energy will ever be extracted, no matter what the price.
It's interesting that you conflate these two issues, in the context of your article - EROEI and price. Why even mention price when talking of EROEI? Isn't that one of it's biggest failings? That it doesn't at all consider the economics of extraction - If you are going to use EROEI, your argument is only from a technically feasible perspective.
It's this very reason that true extraction will never reach a level of 1:1 for both physical and economic reasons. As I have mentioned previously - ironically you always fail to understand that efficient extraction in economics essentially follows the same extraction limitations/laws of the physical world. Logarithms; they are everywhere.

That's the nub of our problem.

GDP is flawed, in that it fails to count real-time depletion, degradation and such-like; calls them 'externalities', which they very much aren't. It's also part of a system - as AJ points out, which bets increasingly on future energy-availability. I included it because we have to discuss it to ditch it (or to make it reality-related).

And it's interesting to watch. I think the divergence (from energy-use) of recent times, is mostly accounted-for by lack of maintenance. From US bridges to Delta (Dunedin) power-poles, we're coasting on the decaying residue of 150 years of build-energy input. You can avoid painting your house for years, and still call it a house. But in reality, it's less of a house each year you procrastinate.

You'll notice I put things in single quotation marks when I don't agree with them.

Here's an in-depth piece from the old Oil Drum, the comments are worth reading too - they were a thoughtful crowd:

And a thoughtful caveat in there re feedstock rather than fuel: " because it does not make sense to extract oil, at least for a fuel, when it requires more energy for the extraction than is found in the oil extracted". But it still begs the question of what energy you use to get it out of the ground.

The problem with money, though, is debt, which is a bet. Bets, by definition, are not guaranteed to pay out. So I guess it's possible for an Oil major to put up a betting Capex case, get backing, pump oil, go broke and the oil is now available. How long the trust in that process continues, is the question of questions. I see Trump and Brexit as representing growing distrust, by a growing cohort of disenfranchised. I see the exponential upping of house and share 'values' as bets needing to be placed, but without the energy backing to be placed in real production. When the bettors realise their tickets are worthless, I doubt there's a logarithm which fits, as per 2007/8.

I'm going back to my own logarythm - hand-splitting next year's firewood :)

Money allows people to make many different bets. If you perceive that fossil fuel extraction is a bad bet and doomed to fail, maybe bet on something different. Now obviously some people will say that everything is also a bad bet. Everyone can have an opinion, okay.

To get from there to saying no-one should be allowed to place bets on anything, because someone thinks they know the answer with certainty - is an interesting call. All I can really say is do you want a bet on that?

BTW - the "coasting" phenomena you described is what you should also expect on renewable infrastructure, high capital costs followed by long term low cost energy.

Bets can be abused however when say Vested interests with political power un-level the playing field.

Rather than "bets" consider the term "return on investment" as far more accurate/useful. So invest in any existing or future energy source will return something the Q is are there any that return enough? and for ever.?

Removing the betting mechanism and entrusting everlasting power in to a structured set of interests does not become preferable, merely because current vested interests already exist. We would be replacing an incredibly powerful bunch of A-holes, with an even more powerful bunch of (albeit) different A-holes.

I reckon the Sun appears to have sufficient energy for our needs into the foreseeable future. It becomes a matter of tapping the output, which is difficult.

If I click on the "read more" tab of nymad's comment - it reduces the size of the comment.

But then when I click on the reply, I can read the entire comment.


"how do you explain the decoupling of GDP and FF consumption growth in rich western nations over the past 15 years? "

I would have thought Massive asset inflation would do it. (effectively a huge devaluation of your meaningless GDP tokens) and outsourcing of the dirty stuff...
then theres the fact that Oil consumption has never been higher so where is the relevance of looking at subsets of nations?.

".... the unsubstantiated assertion that "Above a certain inflation-adjusted level – around US$80 to US$90/barrel it seems – ‘economies’ go into ‘recession’."

this is clear from the IEA ...
"World GDP would be at least half of one percent lower – equivalent to $255 billion "– in the year following a $10 oil price increase. ..

then there is the trend since 07. Oil made it to $140 in 2007 but only was able to rebound to about $110 before collapsing again. Extrapolation of trends says we shouldn’t expect much more than about (3/4 of $110 or about) $85 tops before the price collapses again. Another point is that the price ultimately fell farther in 2016 (into the $20s) than it did in the 2009 collapse (into the $30s). So, if that trend continues the 2019/2020 collapse may see prices below $20/bbl.

and we seem to be looking at OPEC raising prices as they "decide" to reduce output of conventional oil. The Q is then is reduction voluntary? or is it peak oil biting them? (or a mix?)

Oil seems to be heading up towards that risk point,

If this continues we get to find out in the next 6~18months just what that upper limit is.

Interestingly on the ond hand there is a claim that Russia and Saudi are with holding oil production and on the other that they are quietly ramping up.

So clearly no one knows it seems....:/

yes agree. Its tricky to tell who is foxing
Russia in general seems to hold a lot of cards, so the western press is doing their best to discredit Putin.

Dont misinterpret impulse response functions.
The question was to prove that economies go into recession due to an oil price above $80-90.
The $10 you quote is a structural shock reaction in the model to a price shock at the mean (growth - stationary data) level in the economy.

Again. Dont rely on simple graph trends. You need robust statistical methods. Gail the actuary level analysis doesnt cut it.

If you chart the cost of energy % of GDP v GDP it seems at about 6% the US as an example goes into recession. Now its very likely that the USA is very in-efficient and other economies like the EU have a slightly higher number, maybe.

The problem with using GDP is what is real and what is smoke and mirrors ie I think its a poor indicator. So we could say taking GDP on its face the 6% figure equates to (say) $120US a barrel. When in fact we should be using some lesser number that equates to $80~90US a barrel

Id like to see some research in this area as its very much an unknown.

I am mystified by " technically feasible perspective." term. What is technically feasable is the upper limit of what could be done in science/engineering terms. The actual limit is less as affordability comes into play ie ppl stop doing the economic activity at there is no return/point in doing it.. So some oil will always remain in the ground as we cannot afford to "pay" for its extraction.

Again, terrible gail tversberg level analysis.
"The problem with GDP is what is real and what is smoke and mirrors"
But then you go on to use it as a basis for your impossible claim that at some arbitrarily derived number is associated with recession.
Again, the two are endogenous. You cannot allocate causality so simply. Even less so if you question the reliability of the numbers.

I guess in the blogger world being scientific isnt really necessary.

Nymad, economics is smoke and mirrors. And GDP id a flawed measure. To justify yourself we watch tyou tying yourself up in knots. Why? You got skin in the game?

What we are seeing is deferred maintenance - there are physical repercussions with that.

have a look at this chart starting in 1650.

We can see that until recently that has followed a 2.9% on average growth curve. The Q is then why are we not doing it now?

Have we truly dis-engaged? what evidence says no? well many ppl seems to be struggling, hardly evidence all is well.

What evidence says yes?

To do actual physical things takes energy. On the other hand to inflate the value of an asset takes no energy, where have asset values gone in the last decade?

Hence I really question what is going on regarding the claim that GDP and energy use have dis-connected.

This is the sort of analysis that makes me cringe.

There is a plethora of work in the literature noting the decoupling of the relationship. The graph above even shows it - the two growth rates converge. I.e gdp growth outpaces energy growth.

"Metrics on resource productivity currently used by governments suggest that some developed countries have increased the use of natural resources at a slower rate than economic growth (relative decoupling) or have even managed to use fewer resources over time (absolute decoupling). Using the material footprint (MF), a consumption-based indicator of resource use, we find the contrary: Achievements in decoupling in advanced economies are smaller than reported or even nonexistent"

(Its not by Gail the actuary if you are worried..)