Collapse: The Coronavirus is not a Cause, it is a Trigger

Is the epidemic going to cause civilization to collapse? It may happen for good reasons

This is a version of the article that I published on the English version of "Al Arabiya" On March 26, 2020. It is not the same text I published there -- but I kept the wonderful illustration by Steven Castelluccia. It perfectly conveys the concept of "Seneca Cliff"

Do you remember the story of the straw that broke the camel’s back? It is an illustration of how overloaded systems are sensitive to small perturbations. Could the COVID-19 epidemic be the straw that breaks the back of the world’s economy?

Like an overloaded camel, the world’s economy is strained by at least two tremendous burdens: one is the increasing costs of production of mineral resources (don’t be fooled by the current low prices of oil: prices are one thing, costs are another). Then, there is pollution, including climate change, also weighing on the economy. These two factors define the condition called “overshoot,” occurring when an economic system is consuming more resources than nature can replace. Sooner or later, an economy in overshoot has to come to terms with reality. It means that it can’t continue to grow: it must decline.

These considerations can be quantified. It was done for the first time in 1972 with the famous report The Limits to Growth sponsored by the Club of Rome. Widely disbelieved at the time, today we recognize that the model used for the study had correctly identified the trends of the world’s economy. The results of the study showed that the double burden of resource depletion and pollution would bring economic growth first to a halt and then cause it to collapse, probably at some moment during the first decades of the 21st century. Even with very optimistic assumptions on the availability of natural resources and of new technologies the calculations show that the collapse could at best be postponed, but not avoided. Many later studies confirmed these results: collapse turns out to be a typical feature of systems in overshoot, a phenomenon called sometimes the “Seneca Cliff” from a sentence of the ancient Roman philosopher Lucius Annaeus Seneca.

The base case scenario calculated in the 1972 version of "The Limits to Growth" 

The coronavirus, in itself, is a minor perturbation, but the system is poised for collapse and the epidemics may trigger it. We already saw how the world’s economy is fragile: it nearly collapsed in 2008 under the relatively small perturbation of the crash of the subprime mortgage market. At that time, it was possible to contain the damage but, today, the fragility of the system has not improved and the coronavirus may be a stronger perturbation. The collapse of entire sectors of the economy, such as the tourism industry (more than 10% of the world’s gross product), is already ongoing and it may be impossible to stop it from spreading to other sectors.

So, what exactly is it going to happen to us? Since we started with mentioning a camel, we may also mention a famous statement by Shaykh Rāshid that we can summarize as, "My father rode a camel, I drive a Mercedes, my son will ride a camel." Might that sentence have been truly prophetic?

Indeed, the coming crisis might turn out to be so bad to push us back to the Middle Ages. But it is also true that all major epidemics in history have seen a robust rebound after the collapse. Consider that, in the mid-14th century, the “black death” killed perhaps 40% of the population of Europe but, a century later, Europeans were discovering America and starting their attempt of conquering the world. It may be that the black death was instrumental in this rebound: the temporary reduction of the European population had freed the resources necessary for a new leap forward.

Could we see a similar rebound of our society in the future? Why not? After all, the coronavirus could be doing us a favor by forcing us to abandon the obsolete and polluting fossil fuels we use today. The current low market prices are the result of the contraction of the demand and are likely to be the straw that breaks the back of the oil industry. That will leave space for new and more efficient technologies. Today, solar energy has become so cheap that it is possible to think of a society fully based on renewable energy. It won’t be easy, but recent studies show that it can be done.

That doesn’t mean that the near term collapse can be avoided. The transition to a new energy infrastructure will require enormous investments, impossible to find in a moment of economic contraction we expect for the near future. But, in the long run, the transition is unavoidable and there is hope for a "Seneca rebound" toward a new society based on clean and renewable energy, no more plagued by the threats of depletion and climate change. It will take time, but we can heal the poor camel’s back.

Peak Diesel or no Peak Diesel? The Debate is Ongoing

In a recent post, Antonio Turiel proposed that the global peak of diesel fuel production was reached three years ago, in 2018. Turiel's idea is especially interesting since it takes into account the fact that what we call "oil" is actually a wide variety of liquids of different characteristics. The current boom of the extraction of tight oil (known also as "shale oil") in the United States has avoided, so far, the decline of the total volume of oil produced worldwide ("peak oil").

Shale oil has changed a lot of things in the oil industry, but it couldn't avoid the decline of conventional oil. That, in turn, had consequences: shale oil is light oil, not easily converted to the kind of fuel (diesel) which is the most important transportation fuel, nowadays. That seems to have forced the oil industry into converting more and more "heavy" oil into diesel fuel but, even so, diesel fuel is becoming gradually more scarce and more expensive, to the point that its production may have peaked in 2015. In addition, it has created a dearth of heavy oil, the fuel of choice for marine transportation. In short, the famed "peak oil" is arriving not all together, but piecemeal -- affecting some kinds of fuels faster than others.

Turiel's proposal has raised a considerable debate among the experts, with several of them challenging Turiel's interpretation. Turiel himself and Gail Tverberg (of the "our finite world" blog) discussed the validity of the data and their meaning. Below, I reproduce the exchange with their kind permission. As you will see, the matter is complex and at the present stage it is not possible to arrive at a definitive conclusion. In my personal opinion, I would say that it is understandable that many of us are afraid of being criticized for having called wolf too early, but that it is nevertheless worth reporting one's data and discuss them on the basis of what we know. Then, as attributed to John Maynard Keynes, "When I have new data, I modify my conclusions. What do you do, sir?"
________________________________________________________________
Gail Tverberg


Dear Ugo,

I don’t know if you have noticed, but data by type of refined fuel is available from various standard sources of energy data. EIA data has a lot of detail data for the US; BP has regional data for a number of breakdowns. There are no doubt other sources for oil consumption by country. I think of JODI as voluntary data; it is not really clear (to me) which countries are in or out, for which periods.

The information you are showing in your recent post seems to show a fairly different pattern from what BP shows (Dist. means Distillates).



According to BP, Middle distillates consist of jet, heating kerosenes, gas and diesel oils (including marine bunkers).

Within Medium Distillates, there is a further breakdown for recent years, showing a category called diesel/gasoil separately from jet/kerosene. It shows a fairly similar pattern.

It is the “fuel oil” category, which seems to be the heavy distillates, that shows the big downturn in consumption. This is consistent with what we see in the US. Refineries can make a lot more money if they crack heavy oil and refine it into lighter products than if they sell it in close to the unrefined state. In the US, much road construction has changed from asphalt to concrete. Concrete is a coal product in some parts of the world.



In the US, petroleum coke has also shown a big downturn.





With respect to what EIA calls distillate fuel oil (which I think of as diesel), in the US, there indeed were two big steps down.




The first downturn in consumption, in 1981 (when interest rates were raised), was when a lot of home heating and also electricity generation was switched from diesel to other energy products. The second downturn occurred in 2008, when even more homeowners switched away from using diesel for home heating. Also, on the industrial side, some new techniques were developed for drilling oil wells, using natural gas instead of diesel. Natural gas is usually produced in the same field, and is much cheaper for oil producers to use, rather than purchasing diesel. Note that the percentage downturn is far smaller in the "distillate fuel oil” chart than for the other two EIA charts I showed.

To me, it is very difficult to figure out exactly what is happening, with such similar names for different products. Also, there seems to be a lot of shifting of use around the globe. All of this makes the situation confusing.

You might want to backtrack a bit on what you said about diesel. The evidence doesn’t seem as strong, looking at other sources. Perhaps a different post, looking at some new data as well, would be in order. BP data can be downloaded from this link: https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html The tab you are interested in is Oil - Regional Consumption.

Best wishes,

Gail

___________________________________________________________________
Antonio Turiel


Dear Gail,

As for any other peak, some years must be spent to be completely sure that we have passed them. So any evidence so far must be taken, always, with a bit of caution, and in that sense I agree with your warning.

Regarding data, I prefer to use JODI because JODI data is better grounded than EIA data - EIA data contains a lot of "inference", typically spawning from six months in the US up to a couple of years in other countries. JODI data, on the contrary, tend to be more timely (and when there are significant time lags these are reported). Notice also that EIA, IEA and BP use JODI data as one of their sources.

Another significant difference is that in your first graph you represent consumption, while I always represent production. The difference is significant, as I am mainly interested in the refinery throughput because this is the problem I want to characterize (the difficulties to increase the output). The use of stored stuff explains the difference between both.

Some readers have pointed out that the slowdown and even decrease in diesel production, if real, could be a consequence of a lowering demand. This is the same situation as for peak oil: you can always argue that there is not enough demand for that oil, and it is true in any instance: the problem is one of affordability, as you have explained many times.

Regards,


Antonio

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Gail Tverberg
Hello Antonio,

I think that there is a real difference between the kind of data a person wants to look at when that person is examining the indications for an individual country or a subdivision within a country and the information a person wants to look at for world level indications.

When a person is looking at detail level data, then I agree that there is very often a big difference between production and consumption. Looking at data such as JODI data, along with other indications, can be helpful for putting together the true indications for that small grouping. A person has to be pretty aware of particular patterns for individual countries or other smaller groupings. I know, for example, that Texas shale oil data seems to be reported much more slowly than North Dakota shale oil data. Some countries are notorious for trying to exaggerate their production. This is why OPEC shows two sets of numbers, in its monthly reports: “from secondary sources” and “as reported by the producer.” The “from secondary sources” numbers are generally viewed as the more accurate ones.

When a person is looking at small segments of data, corresponding more or less to how the data is reported, then it is fairly easy to see major mistakes. For example, does it look like the "diesel” (or some other grouping) accidentally got reported as “fuel oil,” for some period of time? Does it look like some categories are simply missing, or the amounts have been misinterpreted? If I am looking at detail data, then I can look for mistakes. By the time aggregations occur, the big problems, like missing whole sets of data from some small countries, will be difficult to see. If I am looking at aggregate data, especially on a world basis, I really want someone to have looked at the data in detail, and to have figured out what pieces were missing. They have no doubt made some estimates of the missing pieces, but if I am making estimates of trends, making estimates of the missing pieces is absolutely essential.

I personally have no experience working with JODI, but I have worked with an awfully lot of other data sets (in the insurance world previously, and now in the energy world). I am very much aware of the fact that the initial coding is likely to have a lot of flaws, especially if it is voluntary, and doesn’t have to balance to published financial data.

There is indeed some difference between production and consumption, but when we get to a world basis, they mostly offset. For the purpose of determining trends, what we want is well-massaged data–data that is as free from errors and omissions as possible. I would be willing to believe EIA, IEA, or BP data for this purpose. I would much prefer using well-massaged consumption data to look at trends, rather than a summation of individually reported data of questionable validity.

I have at least a little background on what is happening. I know that there is a fair amount of flexibility in the distribution of finished oil products that can be obtained from a barrel of oil. In general, it is possible to “crack” long hydrocarbons to make shorter (and thus lighter) hydrocarbons; it is close to impossible to go from short chains to longer chains. I was involved in discussions in 2008, when oil companies wanted to increase the refining of what had been products such as asphalt and petroleum coke, because, with high oil prices, oil companies could make a much larger profit from refining heavy oil into higher-price products such as diesel and gasoline. Concrete could be substituted for the asphalt. The US has a natural advantage in cracking long molecules because it has an abundant supply of low-cost natural gas. That keeps the cost below what a similar process would cost in Europe. Heavy oil, such as that from the oil sands, also tends to sell at a substantially lower price than light sweet oil, making the process profitable in the US under a range of price scenarios.

When I see two different trends, one in the JODI data and a different one in the BP data, I am inclined to believe the BP indications.

A Different Diesel Problem

I think that Europe may have a different diesel problem than the one you are thinking about. Europe has tended to use diesel to power its private passenger automobiles as well as its trucks. This is an awfully lot of “demand” to put on one segment of refined products from a barrel of oil. The US and many other countries have spread out demand, with private passenger automobiles using gasoline, instead of diesel. This allows for demand to match up better with what comes out of a barrel of crude oil. According to BP data, in 2017, Europe consumed 7.7% of the world’s gasoline supply and 24.4% of the world’s supply of a subcategory it calls diesel/gasoil. (These are subcategories for recent years that I don’t show on the chart above.) I suspect that there is no oil, anywhere, that could be refined to provide the overly heavy diesel mix that Europe requires. No one in Europe stopped to think, “If cars and trucks both run on diesel, we will need to import an awfully lot of diesel from the world market. We are asking for problems. If the world has barely enough to go around, our demand will raise world diesel prices.”

At this point, there is no sense in adding a whole lot of refining capability for heavy oil in Europe; Europe lacks the cheap natural gas to process it. The same BP report mentioned previously also shows data on Europe’s refining capacity and its refinery throughput. Refining capacity and throughput both seem to be falling, as available North Sea oil falls.


Best wishes,

Gail Tverberg


_________________________________________________________________
Antonio Turiel

Dear Gail,

Sorry for my late response - I'm presently attending an important conference in Rome, and the previous days I was very busy preparing my presentation.

Regarding your comments, if I understand correctly your point, you prefer EIA, AIE and BP data as they have better quality, apart from the fact that they integrate diverse sources of data. The key point is that they apply a better quality control and the result is, let's say, better.

This is a reasonable point, but something that I anyway call into question: are those data really better? As a matter of fact, both EIA and IEA suffer political pressures to make up their data, and this kind of thing is much worse than having an error: it is a bias. Random errors (unexpected data failures, data flow interruptions, occasional double accounting, etc) do not really change the trend, just increase data volatility, something that can be compensated by for instance averaging (e.g., the sliding window of 12 months we apply). But biases can change trends, and that's is quite crucial.

Your point is that maybe what is called diesel has changed along JODI series, something that I am not absolutely aware of, and in fact such a "sudden removal" of diesel from that category should result in an increase the other middle distillates, the "Other fuel oil" category, which is not the case. Besides, removal as such typically shows up as steps in the graph, something that is not observed either. So such hypothesis seems to me very unlikely.

Coping with noisy data with unknown uncertainties is something physicists are used to do, because this is our bread and butter (data from the real world are always noisy and uncertain).

So let me tell you what I propose to solve this issue:

I'm a specialist in a technique called "Triple Collocation" that allows an intrinsic characterization of errors and biases of three sets of different measurements of the same physical quantity. Therefore, abusing of your kindness, if you could provide me different data series of data of what you could name "diesel" or "medium distillates" or whatever you feel more confident of (or even better, all of them!), from different data providers you trust the most (EIA, IEA, BP, whatever) and I will include the data from JODI and make all possible triples (if we have EIA, IEA, BP and JODI we have 4 possible triplets), I can estimate the calibration factors, biases and standard deviations of the random errors for each triplet, then compare the 4 possibilities to see if the results are consistent.

This exercise could be very informative for all us and provide a better insight about where we actually are right now.


Regards,

Antonio

Peak Oil, 20 Years Later: Failed Prediction or Useful Insight?

20 years ago, Colin Campbell and Jean Laherrere published an article on "Scientific American" that was to start the second cycle of interest on oil depletion (the first had been started by Hubbert in the 1950s). Their prediction turned out to be too pessimistic, at least in terms of the supply of combustible liquids, still growing today. Yet, it was a valuable warning of things to come, unfortunately ignored by decision-makers worldwide. 

The first cycle of interest in oil depletion was started by Marion King Hubbert in the 1950s. Although it provided successful predictions for the production of crude oil in the US, the interest in oil depletion waned in the 1980s. The same destiny of growth and decline awaited the second cycle, that went under the name of "peak oil movement" and that was generated in 1998 by a famous article published by Colin Campbell and Jean Laherrere on "Scientific American." 

Today, the second cycle is winding down and even mentioning the concept of "peak oil" is enough to be branded as a diehard catastrophist, unable to understand how the fracking revolution is leading us to a new age of prosperity under America's energy dominance. Yet, there are symptoms that the great peak could be finally arriving and - who knows? - a third cycle of interest in oil depletion could be starting. 

I published some considerations on this subject in an article that appeared on "Energy Research & Social Science" -- it is "open access" and you can find it at this link. After re-examining the story of the peak oil cycle, I conclude that there was no solid reason to reject the peak oil studies, as it was done starting in the mid 2000s. The reasons for the rejection were related more to the incompatibility of the peak oil concept with the (still) current economic views based on the idea that the depletion of natural resources is not -- and cannot be -- a constraint to economic growth. 

It will take time before some concepts percolate from biophysical economics into mainstream economics - if they ever will. In the meantime, humans continue to destroy the resources that make them live, running as fast as they can toward the Great Cliff. 

Here is an excerpt from my paper -- the conclusions

From "Peak Oil 20 Years Later" 

by Ugo Bardi

Energy Research & Social Science
Volume 48, February 2019, Pages 257-261


... Overall, we can say that, even though the role of non-conventional oil sources was not correctly evaluated and the date of the peak missed at the global level, the Hubbert theory produced correct predictions and, in general, a valuable warning of difficulties to come. So, there never were compelling reasons based on historical data to dismiss the peak oil idea as wrong or untenable. Nevertheless, this is what happened.


[..]

Peak Oil, Climate Change, and Limits to Growth – are related to each other and have in common the fact that the models on which they are based predict the unavoidable decline of the world’s economy or, at least, the impossibility for it to keep growing for a long time. This view easily leads to a “doomerish” vision of the future and the peak oil movement tended to regard peak oil as an apocalyptic watershed for humankind, an interpretation surely not based on anything that the model in itself could support. Perhaps in agreement with this millenaristic attitude, the peak oil movement mostly failed to generate a political proposal. This point is well described by Schneider-Matherson [10] who shows how the members of the movement tended to prepare for the event in individual terms, emphasizing local and personal resilience. In some cases, they adopted or proposed a survivalist strategy, including stocking food, guns, and ammunition in expectation of the imminent collapse. Needless to say, this attitude didn’t endear the movement to the mainstream decision makers.

We may therefore conclude that the peak oil predictions were considered incompatible with the commonly held views that see economic growth as always necessary and desirable and depletion/pollution as marginal phenomena that can be overcome by means of technological progress. That was the reason why the peak oil idea was abandoned, a victim of a “clash of absolutes” with the mainstream view of the economic system. In the clash, peak oil turned out to be the loser, not because it was “wrong” but mainly because it was a minority opinion. The future will bring new data and, with them, the concept of peak oil might regain popularity for a second time, just as it did for the first time with the 1998 work of Campbell and Lahérrere.

The Seneca Cliff as an Effect of Bureaucracy

The idea of the "Seneca Cliff" is that a certain entity, from a company to an empire, tends to fall rapidly when it is subjected to a dearth of resources and, at the same time, affected by pollution. More than once I noted that there are many forms of pollution; in the model, the term indicated any kind of phenomenon that tends to grow at the expenses of the capital stock of a society. Bureaucracy clearly satisfies the definition and an excess of it may be a major cause of collapse. Here, Miguel Martinez discusses the concept on the basis of his experience in Italy, a country that seems to be especially plagued by overbureaucracy. Martinez notes several interesting phenomena, including the fact that the decline in economic resources reinforces also the problems created by excessive bureaucracy generating a near complete standstill in everything that can be overcome only by acting illegally, which creates other problems as well. So, it seems that the only cure for over bureaucracy is the Seneca Collapse!

Bureaucracy and the Seneca Cliff

by Miguel Martinez




Ugo Bardi's blog is always a great mental stimulant. His Seneca Curve made me think of another parallel curve. Imagine two lines: the first has to do directly with resources. The other has to do with the rules which govern the resources and how they are used.Rules, laws, regulations, contracts, terms, provisions, standards, obligations, whatever...

Whoever issues them, the ultimate enforcement comes from some entity related to the state; and enforcement can be quite painful, implying the end of a career, severe financial damage, heavy expenses for lawyers, gaol or at least the stress of years of worrying about all of this, whatever the outcome.

Let's start with the line of resources. Basically meaning the relationship among available resources, extraction costs and waste.

Not being a mathematician, I tend to seek practical examples nearby, so the first thing that comes to mind is what they call the Piana, an open marshy area, hosting many species of migrant birds, a few miles to the northwest of the centre of Florence, where no tourist has ever set foot.

But Florence has to put the waste produced by 370.000 Florentines and at least 10 million tourists every year somewhere.

Then the airport isn't big enough to fit yet more tourists.

And the main highway in Italy needs to be expanded, to fit more cars.

So they are now going to put a huge incinerator, an enormous new airport and new lanes for the highway in the Piana.

After that, the city will only have itself to eat up.

But I am no expert on environmental issues. I just want to speak here of the resources available to state institutions.

At least in Italy, the state has definitely gone beyond the peak, and is starting to climb down the dark side of the Seneca curve.

Critics of neoliberalism rightly point out the enormous amount of waste and corruption, and how much is spent to nourish private interests of various kinds. Very well, but still, all that money is no longer there.

When resources diminish, cuts start bottom up.

First, a regularly paid employee in some minor museum retires, and is replaced by somebody who only works there three days a week. Then an unpaid student comes there once a week to “get practice”, and finally the museum is closed.

This bottom up aspect resembles what is happening with climate change, where bottom means places on the ecological borderline, such as Darfur some years ago, and Syria recently (see this prophetic 2010 article in Le Monde Diplomatique.

These are the first places where we feel the symptoms of a changing world. Each one so small, yet they are everywhere.

Since resources continue to be poured in at higher levels - big events, big airports, big missiles, big football stadiums - business often seems to be going on as usual.

Thomas Homer-Dixon devoted a fascinating chapter of The Upside of Down to what archaeologists discovered about Roman aqueducts in Provence. A little more lime gathers year after year, because there is a little less cleaning. Then a farmer somewhere takes advantage of the fact that there are a little less controls, and drills a small hole into the aqueduct. And finally, decades later, the whole systems collapses.

Probably most people who deal with these issues come from fields like biology or meteorology. So perhaps they don't think so much about the impact of institutions and rules on these matters.

Rules were designed for times of increasing resources. And now they clash with new problems arising from diminishing resources. And turn what could have been an elegant glide downward into a painful bum crash.

I claim a limited but very intense expertise.

I live in the Oltrarno district of Florence, where the last living human community of the old city has to deal every day with gentrification, pollution, traffic, high prices and invasion by millions of tourists.

Bringing together traditional residents and craftsmen and new immigrants from countries as different as Senegal and the UK, we have turned the last garden area still available to children and families into a community managed Commons.

Commons are one possible solution to diminishing resources – another is when institutions sell off their assets to private investors. A third solution, of course, is always to sit and complain about selloffs without attempting self-management.

A local community managing its own resources for free of course means that things work better and also cost less for the institutions. We recently saved the Municipality many thousands of euros, by tracking down and closing off a leak in the water system they would never have discovered without us.

However, as public recognition of commoning is something quite new in Italy, we find ourselves having to negotiate our place.

Every day, we have to do with administration, rules and regulations, on the lowest level. Which is exactly where the first and most significant changes take place, when we start down the wrong side of the Seneca cliff.

The countless small issues we come across are like a drop of water in which one can see the whole world, which is why our story may be of some interest to you.

Italians love to blame everything on bureaucrats and politicians, and they often wallow in self-denigration about Italian incompetence and corruption.

Of course, every place is unique, but the same laws hold in all of Italy; and I suspect they are not so different from those in most of Europe, or even in most of the world.

Lobbying, vested interests, corruption flourish in Florence as everywhere, but I do not have the feeling that they are decisive, at least on the low level we know.

I consider many Florentine officials to be personal friends, and in their way courageous, intelligent people, with the best intentions. Some are state employees, some elected politicians, some with the majority and some with the opposition (here this has little do with a left-right divide).

A few days ago, I read that a court investigation has been opened against seven employees of various levels of the Environmental Office of the Municipality of Florence. This very local story has a lot to tell us about our times.

There are 74.000 trees in Florence, planted in days when the Municipality could spend much more liberally.

In those days of plenty, rules were laid down demanding strict care for each tree, to prevent the trees from becoming sick and falling on the heads of passers-by.

Then the purse strings got tighter. What money there was had to go to matters considered to be more important than trees.

The Environmental Office received less funds.

Their vehicles and tools began to break down and were not replaced. Some people retired, new employees were not hired. The last expert gardeners retired, and their places were taken by cheap and untrained labour contracted to private companies exclusively on a price basis, in a kind of reverse auction: in 2014, one company won by cutting the starting price by 75%, another by 83%.

The inevitable result was less and less control on the condition of the trees.

One day in 2014, one branch of one of the thousands of trees in Florence's largest park fell, killing two people.

The Environmental Office employees risked criminal charges.

Rules designed to be smoothly applied in times of plenty, forced them to act under emergency conditions.

So they decided to check and fix every tree in Florence. No longer having the means to do so, they employed contracted labour without any experience to do the only thing possible: chop off branches more at less at random, topping countless trees into something resembling used toothpicks.

The officials were able to write on paper that they had followed the rules, so nobody landed in prison.

However, topping, especially if not performed by experts, can seriously damage trees. Instead of one branch, the whole tree can now fall.

Every piece hacked off was thrown into chipping machines which chop everything up and then spit the residue out.

The chipped wood included that from Florence's many plane trees (Platanus orientalis). Now, Florence is considered a hotbed of the so-called “coloured cancer of plane trees”, a deadly fungus invasion (Ceratocystis fimbriata) which is also highly contagious through contact. An early gift of globalization, by the way, since it came to Europe in infected wooden crates after the last war.

This is why there are very strict laws in Italy on how to dispose of plane cuttings, especially in hotbed areas. Chipping machines are certainly beyond the pale.

Three years went by, and last August, a large horse chestnut fell down, luckily without hurting anybody. So the rules forced the mayor to act again.

Something like 300 trees were immediately cut down.

This led to loud complaints by many citizens, and finally a magistrate opened an investigation, since the officials of the Environment Office were basically accused of:

1) not having undertaken all the checks and maintenance demanded by the rules

2) not having applied the rule that sets out that in the historic centre of Florence, under UNESCO protection, the Monuments and Fine Arts Department must approve the cutting of each individual tree

3) having also cut down trees which could have been saved with a much less radical treatment.

What is interesting is that nobody doubts the good intentions of the officials.

They are paid to save both the goats (the citizens) and the cabbages (the trees).

In the past, they had the resources to do so.

Now they don't.

So they end up on trial whatever, because they cannot save both. And they will end up on trial both for what they do and for what they fail to do.

So, when resources diminish and rules stay unchanged, an official can avoid prosecution in one way only.

He must write a text demanding compliance with a very strict list of rules, and then oblige somebody else to apply them.

He passes on the lit match, and if anything happens, the list of strict rules with his signature under them will save him.

What happens when the lit match ends up in the hands of the very last in line?

There are only two solutions in such case.

The first is to do one's activity illegally.

The second is to close down the activity itself.

In Florence, a great many things are done illegally all the time. This does not mean they are also immoral. For example, cutting down a tree which looks wobbly, without waiting for permission which would come too late if ever, may (or may not) be morally justified, but it is just as illegal as cutting down a healthy tree for one's private fireplace.

In our garden, there is a building with a large amount of broken chairs and tables, lamps that don't work and a few twenty-year old computers. In the old “public” days they just piled up, but now the community wants to keep things tidy.

So we asked how we could throw away the stuff.

In Florence, private citizens can ask for the waste disposal company to come by and take bulky waste away for free. However, businesses and institutions have to pay, and the Municipality has no money for that: office after office is overflowing with useless things they don't have the funds to dispose of. Indeed, we were told that one office of the Municipality pays rent on warehouses to store the waste other offices don't have the money to pay for.

Maybe we could just call the waste disposal company and say it is the personal property of one of us? Not exactly. Walking off with a computer belonging to the state is theft, and rightly so.

So? So, I won't tell you how we solved the problem.

Mostly, one can get away with what I might call legitimate illegality. But of course when something goes wrong, the last person in the line will be stuck with a lit match in his hand. And everybody upstream will have a paper in their hands where they say that they passed the match on in the most proper manner.

Which is why the easiest answer in the end to most problems is to simply close whatever one is responsible for down.

One of the most widely used products in Florence is a flimsy white and red plastic tape, which anybody can break through, but which officials use to prove that they sealed the forbidden area off, and whatever happens, it is not their fault.

Young activists: are they enough to save the world? Notes from the 1st Summer School of the Club of Rome

Above, an image that I think summarizes the spirit of the 1st Summer School of the Club of Rome, held this September in Florence. A lot of good will, enthusiastic young (and not so young) people, a stellar cast of speakers, in-depth discussions, and state of the art world modeling. But is it enough?

A week of full immersion in the First Summer School of the Club of Rome. Truly an experience for many reasons. One was the sheer physical fatigue of keeping track of everything. If you are one of the organizers of an event like this one, you can't even think that something could go wrong while many sessions are taking place together and people move from one place to another. I don't think that in my life it ever happened to me that I went to bed and I couldn't sleep because I was too tired. But, this time, yes, it happened.

Was it worth it? As far as I can say, yes. It was something that I would have loved to attend when I was in my 20s; it would have changed my life. Actually, my life changed anyway, as human lives tend to do. But for these young people (some young at heart) it was surely a positive experience. I was only marginally involved in assembling the school's program, but the staff of the Club of Rome did a great job in putting together a number of high level speakers and also organizing plenty of space for seminars and informal discussion. It was also a good idea to break the school in two halves, with the Sunday in between left free for the social program and for participants to relax and enjoy their time together. We offered them a chance to visit places that the ordinary tourist has no time to see. From the "Skeleton Room" of the "La Specola" science museum to the Roman Theater on the Hill of Fiesole and much more, including an "archeological dinner" where they were served the food that the ancient Etruscans ate (or that we believe they ate; the archaeology of cuisine is an iffy matter). Maybe these people won't change the world by themselves alone, but I think they will at least try. For sure, they will have a hard time; much harder than we had at their age. At least, they have been warned on what to expect.

In a series of posts on the Cassandra blog (just scroll down), you'll find descriptions and impressions of some of the talks. In this post, here are a few pictures to give you some idea of the friendly atmosphere of the Academy.

The Rector of the University of Florence, Luigi Dei, inaugurates the academy.

Ice-breaking games with the Secretary General of the Club of Rome, Graeme Maxton 

The discussion was always lively, with plenty of questions and comments during and after the talks. Here, the participants are crowding to ask question to Chandran Nair.

Testing state of the art world models in an interactive session. With Ilaria Perissi (red shirt) and Jordi Solé (standing with gray shirt)

Some participants Trying a "lampredotto" (organ meat) sandwich, a traditional Florentine food.

The skeleton room of the La Specola Museum, with curator Gianna Innocenti.

Visiting the Wax Room of the Specola museum. These ancient wax pieces had an important role in the progress of anatomy a few centuries ago. Now they are mainly a curiosity, but they have historical value and they are surely impressive. 

Some of the participants explore the ruins of the ancient Roman Theater of Fiesole

The Etruscan dinner: it included some plain food such as eggs, that seem to have been an Etruscan favorite dish, to reconstructions of the ancient "garum" fish sauce and something called "scottiglia", which is a curious mix of meat and strange sauces that (maybe) the Etruscans would eat.

And, finally, the traditional group photo in front of the university building of Via Capponi, in Florence

The stoic viewpoint: make the best of what's in our power and we take the rest as it naturally happens.

 The Stoics are the people on the top of the hill. They are applying Epictetus' maxim that says "What, then, is to be done? To make the best of what is in our power, and take the rest as it naturally happens." (Discourses, 1.1.17). 
(Image courtesy: Nate Hagens.)

There comes a point in which you have to acknowledge reality: Business as usual, BAU, is dead. Not that it would be impossible to avoid, or at least soften, the imminent disruption of our way of life caused either by resource depletion or climate change (or both). But that implies making sacrifices, renouncing something today for a better world tomorrow. And people are just not going to do that. We are not wired to plan for the future. We are wired to exploit what we have at hand.

The recent global events have shown that humans, worldwide, are unable to see priorities. The richest country in the world, the US, has turned its back to what science says about our faltering ecosystem, pursuing the impossible dream to return to an imaginary world of happy coal miners as England was at the time of Charles Dickens. The US is not the only example of a society that desperately tries cling to the old ways, refusing to change. Practically every country in the world is pursuing a dream of economic growth which, at this point, is just as impossible as a return to coal.

Does that mean we have to fall into despair? Some people seem to have arrived at this conclusion: there is nothing that can be done, therefore nothing that should be done. After all, what was so bad with the Middle Ages? And, anyway, human extinction would surely solve a lot of problems. Other take the opposite view, desperately hoping for some technological miracle that will lead us to leave the earth, colonize other planets, and mine the inexistent ores on asteroids.

What is to be done, then? Over the years, I found myself closer and closer to that group of ancient philosophers who lived during the times of decline of the Roman Empire who called themselves "Stoics" and who themselves the same question: what's to be done? The answer was given by Epictetus in his "Discourses:" It is "To make the best of what is in our power, and take the rest as it naturally happens". (1.1.17). And, after all, Seneca, to whom I credit the idea of the "Seneca Cliff", was a stoic, too!

So, here is a picture of the vegetable gardens that we planted in the courtyard of a building of the University of Florence (here it is shown with two students who have volunteered to take care of it). We plan to plant many more of these gardens. And, in this way, we make the best of what's in our power and we'll take the rest as it naturally happens.

Fossil fuels: are we on the edge of the Seneca cliff?

"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." Lucius Anneaus Seneca, Letters to Lucilius, n. 91. 

This observation by Seneca seems to be valid for many modern cases, including the production of a nonrenewable resource such as crude oil. Are we on the edge of the "Seneca cliff?"

It is a well known tenet of people working in system dynamics that there exist plenty of cases of solutions worsening the problem. Often, people appear to be perfectly able to understand what the problem is, but, just as often, they tend to act on it in the wrong way. It is a concept also expressed as "pushing the lever in the wrong direction."

With fossil fuels, we all understand that we have a depletion problem, but the solution, so far, has been to drill more, to drill deeper, and to keep drilling. Squeezing out some fuel by all possible sources, no matter how difficult and expensive, could offset the decline of conventional fields and keep production growing for the past few years. But is it a real solution? That is, won't we pay the present growth with a faster decline in the future?

This question can be described in terms of the "Seneca Cliff", a concept that I proposed a few years ago to describe how the production of a non renewable resource may show a rapid decline after passing its production peak. A behavior that can be shown graphically as follows:

It is not just a theoretical model: there are several historical cases where the production of a resource collapsed after having reached a peak. For instance, here are the data for the Caspian sturgeon, a case that I termed "peak caviar".

Do we risk to see something like this in the case of the world production of oil and gas? In my opinion, yes. There are some similarities; both fossil fuels and caviar are non-replaceable resources; and in both cases prices went rapidly up at and after the peak. So, if Caspian sturgeon showed such a clear Seneca cliff, oil and gas could do the same. But let me go into some details.

In the first version of my Seneca model, the fast decline of production was interpreted in terms of growing pollution that places an extra burden on the productive system and reduces the amount of resources available for the development of new resources. However, I found that the Seneca behavior is rather robust in these systems and it appears every time people try to "stretch out" a system to force it to produce more and faster than it would naturally do.

So, in the case of the Caspian sturgeon, above, growing pollution is unlikely to be the cause of the rapid collapse of production (even though it may have contributed to the problem). Rather, the main factor in the collapse is likely to have been the effect of the growing prices of a rare and non replaceable resource (caviar). High prices enticed producers to invest more and more resources in raking out of the sea as much fish as possible. It worked, for a while, but, in the end, you can't fish sturgeon which isn't there. It ended up in disaster: a classic case of a Seneca Cliff. 

Can this phenomenon be modeled? Yes. Below, I describe the model for this case in some detail. The essence of the idea is that producers need to reinvest a fraction of their profits in developing new resources in order to keep producing. However, the yield of the new investments declines as time goes by because the most profitable resources (e.g. oil fields) are exploited first. As a result, less and less capital is available for new investments. Eventually production reaches a maximum, then it declines. If we assume that companies re-invest a constant fraction of their profits in new resources, the model leads to the symmetric bell shaped curve known as the "Hubbert Curve."

However, as I describe in detail below, decline can be postponed if high prices provide extra capital for new productive developments. Unfortunately, growth is obtained at the cost of a fast burning out of capital resources. The final result is not any more the symmetric Hubbert curve, but a classic Seneca curve: decline is more rapid than growth.

Is this what we are facing for fossil fuels? Of course, we are only dealing with qualitative models, but, on the other hand, qualitative models are often robust and give us an idea of what to expect, even though they can't tell us much in terms of predicting events on a precise time scale. The ongoing collapse of oil prices may be a symptom that we are running out of the capital resources necessary to keep developing new fields. So, what we can say is that there are some good chances of rough times ahead - actually very rough. The Seneca cliff may well be part of our near term future.


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The Seneca curve as the result of increasing fractions of profits allocated to the production of a non renewable resource

by Ugo Bardi - 07 Dec 2014


Note: this is not a formal scientific paper; it is more a rough "back of the envelope" calculation designed to show how increasing capex fractions can affect the production rate of a non renewable resource. If someone could give me a hand to make a more refined and publishable study, I would be happy to collaborate!


The basics of a system dynamics model describing the exploitation of a non renewable resource in a free market are described in detail in a 2009 paper by Bardi and Lavacchi. According to the model developed in that paper, it is assumed that the non renewable resource (R) exists in the form of an initial stock of fixed extent. The resource stock is gradually transformed into a stock of capital (C) which in turn gradually declines. The behavior of the two stocks as a function of time is described by two coupled differential equations.

R' = - k1*C*R
C' = k2*C*R - k3*C,

where R' and C' indicate the flow of the stocks as a function of time (R' is what we call "production"), while the "ks" are constants. This is a "bare bones" model which nevertheless can reproduce the "bell shaped" Hubbert curve and fit some historical cases. Adding a third stock (pollution) to the system, generates the "Seneca Curve", that is a skewed forward production curve, with decline faster than growth. 

The two stock system (i.e. without taking pollution into account) can also produce a Seneca curve if the equations above are slightly modified. In particular, we can write: 

R' = - k1*k3*C*R
C' = ko*k2*C*R - (k3+k4)*C.

Here, "k3" explicitly indicates the fraction of capital reinvested in production, while k4 which is proportional to capital depreciation (or any other non productive use). Then, we assume that production is proportional to the amount of capital invested, that is to k3*C. Note how the ratio of R' to the flow of capital into resource creation describes the net energy production (EROI), which turns out to be equal to k1*R. Note also that "ko" is a factor that defines the efficiency of the transformation of resources into capital; it can be seen as related to technological efficiency. These points will not be examined in detail here.

Here is the model as implemented using the Vensim (TM) software for system dynamics. The "ks" have been given explicit names. I am also using the convention of "mind sized models" with higher free energy stocks appearing above lower free energy stocks

If the k's are kept constant over the production cycle, the shape of the curves generated by this model is exactly the same as with the simplified version, that is a symmetric, bell shaped production curve. Here are the results of a typical run:

Things change if we allow "k3" to vary over the simulation cycle. The characteristic that makes "k3" (productive investment fraction) somewhat different than the other parameters of the model, is that it is wholly dependent on human choice. That is, while the other ks are constrained by physical and technological factors, the fraction of the available capital re-invested into production can be chosen almost at will (of course, there remains the limit of the total amount of available capital!).

Higher prices will lead to higher profits for producers and to the tendency to increase the fraction reinvested in new developments. It is also known that in the region near the production peak prices tend to be higher - as in the historical cases of whale oil and caviar and whale oil. In the case of caviar, the price rise was nearly exponential, in the case of whale oil, more like a logistic curve. Assuming that the fraction of reinvested capital varies in proportion to prices, some modeling may be attempted. Let me show here the results obtained for an exponential increase of the fraction of reinvested Capex.
  

I have also tried other functions for the rising trend of k3. The results are qualitatively the same for a linear increase and for a logistic one: the Seneca behavior appears to be robust, as long as we assume a significant increase of the fraction of the reinvested capex. 

Let me stress once more that these are not supposed to be complete results. These are just tests performed with arbitrary assumptions for the constants. Nevertheless, these calculations show that the Seneca cliff is a general behavior that occurs when producers stretch out their system allocating increasing fractions of capital to production.