Welcome to the age of diminishing returns

Friday, July 26, 2013

Peak oil? What peak oil?


Graph courtesy of Jean Laherrere (units are barrels per capita per year)







Sunday, July 21, 2013

The decline of an empire




Guest post by Alexander Ac



Given that City of Detroit has now officially filed for bankruptcy, it is worth to look at the bigger picture. Is the fate of once mighty city just a short pause on the way to further prosperity? Or is it rather a symptom of something bigger and more widespread regarding the future of a post-industrial society?

Without exaggeration, Detroit was once a symbol of “American Dream”, characterized by the highest per capita income in the entire country, growing population, industrialization, mass production, growing wealth, etc. The population reached almost 2 million people.

Now, Detroit is more the symbol of “American Nightmare”, with a declining population* increasing poverty and criminality, declining property value, declining public services, etc. Now the population is bellow 700 thousands people.

The period after the WW2 was characterized by an explosive growth of population and energy consumption, tremendous increases in productivity brought by cheap energy, globalization of trade, technological innovation, especially in fields of computers and communication, increasing quality of healthcare, and hopefully collective growth of population happiness.

The same period can by also characterized by several fundamental trends, which probably explain a lot. Let’s look at the following graph:



Fig. 1: Graph shows evolution of primary energy consumption per capita in Btu (blue line) and the ratio of total debt to nominal GDP (red line in %) from 1950 to 2011. Vertical dashed lines show approximate thresholds of different growth/decline phases of USA. (Source: EIA, St. Louis Fed).


Expansion phase (1950-1979)

This period can be broadly characterized by a rapid population growth, rapid total energy consumption per capita growth (2% p.a.), infrastructure construction, and relatively stable debt/GDP ratio (0.3% p.a.). We could talk about the “expansion phase”, from which most of the population benefited in terms of increasing quality of life. Increasing safety, better access to health care, better education and freedom of almost everything were a given facts of life. Even the environmental conditions might have improved in some or even most locations. And global warming was not of a serious concern at that time.

Slow decline phase (1979-2009)

This characterization of 30 years following the peak in per capita energy consumption might be surprising to many, but should not be really. Many of the great achievements of science and technology started to be slowly overrun by resource depletion. This trend was largely undetected, since increased level of debt masked the real price of the energy. We decided to pay less for prosperity (better call it consumption) today, in exchange for more tomorrow, assuming that happy days of cheap energy would return at some moment in the future. Human naivety is endless, as we can easily observe. But during the phase of exponential growth in the debt to GDP (almost 5% p.a.) and slowly declining per capita energy consumption (0.5% p.a.), many of the previously positive trends turned negative. Here is a list of just some of them:

  • Growth in the income inequality between rich and poor
  • Declining fertility growth rates
  • Growth of the financial sector as the share of GDP
  • Outsourcing of the energy intensive industrial jobs to foreign countries
  • Increasingly negative trade balance
  • Declining quality of education
  • Increasing healthcare costs
  • Declining added value of further debt
  • Increasing oil dependency upon Middle East countries
  • Ageing infrastructure (what you build during 10 dollars/barrel era is difficult to maintain or even expand with 100 dollars/barrel era)

Fast decline phase (2009-???)

These and others long-term negative trends ended up with a financial crisis in 2008-9, which turned out to be global. Debt to GDP ratio peaked in the US, and its decline started off what we might call “fast decline” phase. Close to zero Fed Funds Rate or “quantitative easing” policies are not going to change fundamental evolution of the US economy. There is no new “industrial revolution” behind the corner, no matter what “shale oil” or “shale gas” money loosing/climate catastrophe ignoring propaganda wants you to convince.  We have plundered the cheap resources and now we have to face the consequences. If we are collectively wise enough, which is not happening yet, we might have a small change of avoiding WW3 in coming years and decades. Unfortunately, history seems to predict a different outcome.

* Keep in mind that under a global decline scenario people have nowhere to migrate, unlike in the case of local decline, such as for Detroit.

Monday, July 15, 2013

The punctuated collapse of the Roman Empire

I defined as the "Seneca Cliff" the tendency of some systems to collapse after having peaked. Here I start from some considerations about whether the collapse could be smooth or an uneven process that we could define as "punctuated." I am taking the Roman Empire as an example and showing that it did decline much faster than it grew. But the decline was surely far from smooth.


The idea of an impending collapse of our civilization is already bad enough in itself, but it has this little extra-twist that collapse may be given more speed by what I called the "Seneca Cliff," from the words of the Roman Philosopher who had noted first that, "Fortune is slow, but ruin is rapid". The concept of the Seneca Cliff seems to have gained some traction over the Web and many people have been discussing it. Recently, I found an interesting comment on this point by Jason Heppenstall on his blog "22 billion energy slaves". He summarizes the debate as:

"In the fast-collapse camp are the likes of Dmitry Orlov (who bases his assessment on his experience of seeing the USSR implode) and Ugo Bardi, who expects a ‘Seneca’s Cliff’ dropoff. James Kunstler, Michael Ruppert and any number of others can probably also be added to the fast-collapse camp.

By comparison, the likes of John Michael Greer reckon we are in for a drawn-out era of terminal decline punctuated by serious crises which, at the time, will seem rather severe to all involved but which will give way to plateaux of relative stability, albeit at a lower level of energy throughput."

Actually, the two camps may not be in such a radical disagreement with each other as they are described. The idea of the fast (or Seneca-like) collapse does not necessarily mean that collapse will be continuous or smooth. The model that describes the Seneca effect does give that kind of output, but models are - as usual - just approximations. The real world may follow the curve in a series of "bumps" that will give an impression of recovery to the people who will experience the painful descent period.

So, collapse may very well be "punctuated: a series of periods of temporary stability, separated by severe crashes. But it may still be much faster than the previous growth had been. I discussed this point already in my first post on the Seneca Effect, but let me return on this subject and let me consider one of the best known cases of societal collapse: that of the Roman Empire.

First of all: some qualitative considerations. Rome's foundation goes back to 753 BC; the end of the Western Empire is usually taken as 476 AD, with the dethroning of the last Western Emperor, Romulus Augustus. Now, in between these two dates, a time span of more than 1200 years, the Empire peaked. When was that?

The answer depends on which parameter we are considering but it seems clear that, whatever choice we make, the peak was not midway - it was much later. The Empire was still strong and powerful during the 2nd century AD and we might take the age of Emperor Trajan as the peak (he died in 117 AD) as "peak empire." We may also note that up to the time of Emperor Marcus Aurelius (who died in 180 AD), the empire didn't show evident signs of weakness, so we could take the peak as occurring in mid or late 2nd century AD. In the end, the exact date doesn't matter: the Empire took around 900 years to go from the foundation of Rome to the 2nd century peak. Then, it took just 400 years - probably less than that - for the Empire to wither and disappear. An asymmetric, Seneca-like collapse, indeed.

We also have some quantitative data on the Empire's cycle. For instance, look at this image from Wikipedia.





It shows the size of the Roman military over the Empire's span of existence. WIth all the uncertainties involved, also this image shows a typical "Seneca" shape for both the Western and the Eastern parts of the Empire. Decline is faster than growth, indeed.

There are other indicators that we can consider about the collapse of the Roman Empire. In many cases, we don't have sufficient data to say much, but in some, we can say that collapse was, indeed, abrupt. For instance, you can give a look to a well known image taken from Joseph Tainter's book "The Collapse of Complex Societies"



The figure shows the content of silver in the Roman "denarius" which by the 3rd century AD, had become pure copper. Note how the decline starts slow, but then goes on faster and faster. Seneca himself would have understood this phenomenon very well.


So, the Roman Empire seems to have been hit by a "Seneca collapse" and that tells us that the occurrence of this kind of rapid decline may be commonplace for the entities we call "civilizations" or "empires".

It is also true, however, that the Roman collapse was far from being smooth. It went through periods of apparent stability, interrupted by periods of extremely fast descent. The chroniclers of the time described these periods of crisis, but none of them seem to have connected the dots: they never saw that each crisis was linked to the preceding one and leading to the next one. Punctuated collapse seemed to be invisible to the ancient Romans, just as it is for us, today.




Sunday, July 7, 2013

The shale gas revolution: is it already over?

link to data


The production of natural gas in the US has not been increasing for about two years. Fitted with a Gaussian function, it shows a peak in the second half of 2012 and, from then on, a tendency to decline. Decoupled in its various components, the data show that shale gas production is still increasing, but not fast enough to compensate for the decline of conventional gas production.

Are we already seeing the end of the "shale gas revolution"? It is too early to say but, surely, these data agree with the viewpoint of those who had been seeing the whole story as a short lived financial bubble. (see, e.g., a recent series of statements by Arthur Berman)








Friday, July 5, 2013

Desertec: the raft and the liner


The "Great Eastern" transatlantic liner. Launched in 1858, it was by far the largest ship ever built and it remained so for almost half a century. But it was too big to be practical and it was a commercial disaster. The ambitious "Desertec" project, the idea of supplying Europe with renewable energy from North Africa, may be facing the same destiny.   (image source)



I have been following the "Desertec" story for a long time; the ambitious idea of building large scale solar plants in North Africa, to produce energy to be shipped to Europe.

Desertec always left me perplexed. With its huge plants and a price tag of some 400 b$, I always though that it was like trying to go from a raft to a transatlantic liner without ever having built anything in between. In short, a modern equivalent of the ill-fated "Great Eastern" transatlantic liner, built in mid 19th century and way too big for its times. So, I was not surprised to read, recently, that the project is in trouble (see also here).

Not that the basic idea of the Desertec project is wrong. Northern Africa receives plenty of sunlight and it has large, empty spaces that could be profitably used to harness this energy to produce electric power. But that wasn't enough to make such a large project economically sound. The first problem was the collapse of the prices of photovoltaic panels. That undercut the original idea of the project that was to rely on the use of solar concentrating power. Then, with such low prices, it made sense to build PV plants directly in Europe. Even for a lower solar irradiation, one would still avoid the huge costs of the infrastructure needed for bringing electric power from North Africa.

More than that, the Desertec project suffered from having been conceived with a sort of "Apollo mentality"; the idea that, if we could go to the Moon, then we can do anything (provided that we are willing to spend enough money). But the Apollo success has never been repeated, even though the ghost of the Saturn rocket was evoked many times for other purposes, from an economy based on hydrogen to fusion power. This kind of huge efforts with a remote payback were possible in the 1960s, but not any more today. With so few resources left, priority is given to projects that promise rapid returns. And surely Desertec is not one of them. We don't have that kind of money any more.

There would be only one way to save Desertec: build first a time machine and then build the plants in the 1960s. (or, perhaps, at the times of the "Great Eastern".)








Wednesday, July 3, 2013

The End of the Oil Drum



Rembrandt Koppelaar has announced today that the Oil Drum will cease to be an active site with the end of July 2013. After eight years of activity, TOD is closing down.

I would like first to thank all the members of the TOD group, of which I have been a member up from 2008 up to a few months ago. It has been an unforgettable experience of learning and of personal growth. The "peak" of the group, for me at least, was the Alcatraz meeting that we had in Italy in 2009 which led me to develop the "peak empire" idea.

Alas, as Seneca had said about all human things, there always comes a moment of decline which, often, is faster than growth. This seems to have been the destiny of the TOD group, which I had already left some months ago because it seemed to me that it wasn't any more the lively discussion group that it had known at the beginning. So, I was surprised to see that the site closes down, but really not so much.

Why these cycles? Hard to say; maybe human groups suffer of entropic effects, just as everything in the universe. But it is a fact of life that human associations start lively and die ossified. As Marcus Aurelius said in his "meditations" "Observe always that everything is the result of a change, and get used to thinking that there is nothing Nature loves so well as to change existing forms and to make new ones like them. "

So, if an ancient form is gone, we can work at making new ones.




Tuesday, July 2, 2013

Ugo Bardi on "Plundering the Planet" - Part IV



Quelle: www.kontext-tv.de


Control over metals, coal and oil key to all empires / Fall-back into agrarian society possible

The control of noble metals was a key to ancient and modern empires. Soldiers were paid with gold or silver coins, so they were able to extent the empire and conquer more mines to pay more soldiers. Modern empires like the British Empire were built on coal – which went down with the end of British coal resources. The Empire of our times is built on fossil fuels as well: controlling them means to dominate the world. However, shortages of oil, coal and metals combined with catastrophic climate change could lead to a collapse of modern civilization and bring us back to an agrarian society. However this scenario is avoidable according to Bardi, if we stop mining the earth and start mining our waste, closing the resource cycle.

Who

Ugo Bardi is a member of the Club of Rome and the author of "Extracted: how the quest for mineral resources is plundering the Planet" (Chelsea Green 2014)