Reaching the end of offshored industrialization
Our Finite World
by Gail Tverberg
5d ago
Moving industrialization offshore can look like a good idea at first. But as fossil fuel energy supplies deplete, this strategy works less well. Countries doing the mining and manufacturing may be less interested in trading. Also, the broken supply lines of 2020 and 2021 showed that transferring major industries offshore could lead to empty shelves in stores, plus unhappy customers. The United States started moving industry offshore in 1974 (Figure 1) in response to spiking oil prices in 1973-1974 (Figure 2). Figure 1. US industrial energy consumption per capita, divided among fossil fuels, bi ..read more
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The world’s economic myths are hitting limits
Our Finite World
by Gail Tverberg
1M ago
There are many myths about energy and the economy. In this post I explore the situation surrounding some of these myths. My analysis strongly suggests that the transition to a new Green Economy is not progressing as well as hoped. Green energy planners have missed the point that our physics-based economy favors low-cost producers. In fact, the US and EU may not be far from an economic downturn because subsidized green approaches are not truly low-cost. [1] The Chinese people have long believed that the safest place to store savings is in empty condominium apartments, but this approach is no lo ..read more
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Advanced Economies Will Be Especially Hurt by Energy Limits
Our Finite World
by Gail Tverberg
2M ago
Historical data show that to date, a reduction in energy availability has mostly affected the US, European countries, Japan, and other advanced economies. I expect this situation to continue as energy limits become more of a problem. Advanced economies will start looking and acting more like today’s less-advanced economies. The world economy will face a bumpy path in a generally downward direction. In this post, I give an overview of our current predicament. All economies are subject to the laws of physics. We are biologically adapted to needing some cooked foods in our diets. We have also mov ..read more
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Should the US add more LNG export approvals?
Our Finite World
by Gail Tverberg
3M ago
In the US, companies that want to build liquefied natural gas (LNG) export terminals need to get advance approval for their plans from the US Department of Energy. There was a recent news item saying, “Biden pauses LNG export approvals under pressure from climate activists.” After looking into the situation, I 100% agree with Biden’s decision. There is no sense in the US adding more approvals for added LNG capacity at this time. This is the case, completely apart from climate considerations. When I looked into the situation, I found that the US already has a huge amount of LNG export capacity ..read more
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2024: Too Many Things Going Wrong
Our Finite World
by Gail Tverberg
4M ago
It will be an interesting year. We know that the age of peak performance for humans varies, depending upon the activity. Peak performance for an athlete tends to come between ages 20 and 30, while peak performance for a person writing academic papers seems to come between ages 40 and 50 years. By the time people are 80 years old, they have a strong suspicion that health and other aspects of performance will deteriorate in the next 20 years. Economies, in physics terms, are similar to human beings. Both are dissipative structures. They require energy of the appropriate kinds to keep their ..read more
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Ten Things that Change without Fossil Fuels
Our Finite World
by Gail Tverberg
5M ago
It is now popular to talk about leaving fossil fuels to prevent climate change. Pretty much the same result occurs if we run short of fossil fuels: We lose fossil fuels, but it is because we cannot extract them. Practically no one tells us about the extent to which the current system depends upon fossil fuels, however. The economy is extraordinarily dependent on fossil fuels. If there are not enough fossil fuels to go around, there is likely to be fighting over what is available. Some countries are likely to get far more than their fair share, while the rest of the world’s population will be l ..read more
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Running Short of Tailwinds for the Economy
Our Finite World
by Gail Tverberg
6M ago
Tailwinds often make jet planes fly faster than they would regularly fly. In this post, I talk about economic tailwinds that help the economy grow more quickly. Strangely enough, the economy seems to move from tailwind to tailwind, as new resources are discovered, as population expands, and as central banks figure out new ways to fix the economy. In this post, I will describe some tailwinds affecting the economy. Many of these have recently lost their value or are likely to lose their value in the future. The long-term trend seems to be toward tailwinds becoming available to some parts of the ..read more
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Today’s energy bottleneck may bring down major governments
Our Finite World
by Gail Tverberg
7M ago
Recently, I explained the key role played by diesel and jet fuel. In this post, I try to explain the energy bottleneck the world is facing because of an inadequate supply of these types of fuels, and the effects such a bottleneck may have. The world’s self-organizing economy tends to squeeze out what it considers non-essential parts when bottlenecks are hit. Strangely, it appears to me that some central governments may be squeezed out. Countries that are rich enough to have big pension programs for their citizens seem to be especially vulnerable to having their governments collapse. Figure 1 ..read more
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Can India come out ahead in an energy squeeze?
Our Finite World
by Gail Tverberg
8M ago
I was recently asked to be a keynote speaker for World Management Conference (WMC 2023) in Patna, India. The academic group that asked me to speak was particularly concerned about Complexity and Sustainability. A PDF copy of the presentation is available at this link. The primary things I pointed out to the group were the following: The slower the growth, the more sustainable an economy is over the moderately long term. Energy consumption and the use of complexity tend to rise together. Too much complexity can lead to collapse. In general, the most “efficient” economies can be expected to do ..read more
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Fossil Fuel Imports Are Already Constrained
Our Finite World
by Gail Tverberg
9M ago
For many years, there has been a theory that imports of oil would become a problem before there was an overall shortage of fossil fuels. In fact, when I look at the data, it seems to be clear that oil imports are already constrained. Figure 1. Interregional trade of fossil fuels based on data of the 2023 Statistical Review of World Energy by the Energy Institute. As I look at the data, it appears to me that coal and natural gas imports are becoming constrained, as well. There was evidence of this constrained supply in the spiking prices for these fuels in Europe in late 2021 and early 2022, st ..read more
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