2017 – A Sea of Exponentials

From Peak Prosperity.

Perhaps the most vexing challenge remains how to more effectively communicate the various predicaments and problems we face.

It’s not having more numbers, or more data, that’s for sure.  If numbers and data ‘worked then we’d have taken a very different path sometime back in the 1950’s.

As Admiral Hyman Rickover said in a speech to a group of doctors in 1957:

“I think no further elaboration is needed to demonstrate the significance of energy resources for our own future. Our civilization rests upon a technological base which requires enormous quantities of fossil fuels. What assurance do we then have that our energy needs will continue to be supplied by fossil fuels: The answer is – in the long run – none.

The earth is finite. Fossil fuels are not renewable. In this respect our energy base differs from that of all earlier civilizations. They could have maintained their energy supply by careful cultivation. We cannot.

Fuel that has been burned is gone forever. Fuel is even more evanescent than metals. Metals, too, are non-renewable resources threatened with ultimate extinction, but something can be salvaged from scrap. Fuel leaves no scrap and there is nothing man can do to rebuild exhausted fossil fuel reserves. They were created by solar energy 500 million years ago and took eons to grow to their present volume.

In the face of the basic fact that fossil fuel reserves are finite, the exact length of time these reserves will last is important in only one respect: the longer they last, the more time do we have, to invent ways of living off renewable or substitute energy sources and to adjust our economy to the vast changes which we can expect from such a shift. Fossil fuels resemble capital in the bank.

A prudent and responsible parent will use his capital sparingly in order to pass on to his children as much as possible of his inheritance. A selfish and irresponsible parent will squander it in riotous living and care not one whit how his offspring will fare.”

His logic was as irrefutably sound then as it is today.  Such information was known at the highest levels throughout government and academia.  But there was no, and continues to be no, sustained and well-funded efforts to grapple with the basic dilemma posed by increasing population as dramatically as we have all the while living on, literally eating, fossil fuels to encourage that rapid population growth.

“Can you think of any problem in any area of human endeavor on any scale, from microscopic to global, whose long-term solution is in any demonstrable way aided, assisted, or advanced by further increases in population, locally, nationally, or globally?”  ~ Al Bartlett

The American Museum of Natural History recently put out an amazingly good and informative video on human population growth over time.

As they noted, it took 200,000 years for humans to reach the first billion, and only 200 years more from that moment to reach 7 billion.

Here it is – try hard not to notice the similarity between the clicks denoting each new million people and the sound of a Geiger counter:

 

If you overlaid human’s exploitation of fossil fuels the curves at the end overlay to an astonishing degree.  Not astonishing because it’s some sort of mental leap requiring acute intellectual agility,  but because of how little attention it receives practically anywhere in the halls of power or academia.

Again, Hyman Rickover linked the population and economy firmly to energy and prosperity way back in 1957.  He was extraordinarily influential.  President Carter took a few important steps but then something happened.  The idea of limits and thoughtful planning gave way to something else… a headlong rush into endless growth and a profound, almost pathological aversion to facing the simple math that says “exponential growth on a finite planet is impossible (and irresponsible).”

The rapidity of population growth has not given us enough time to readjust our thinking.   I suggest that this is a good time to think soberly about our responsibilities to our descendants – those who will ring out the Fossil Fuel Age. ~  Hyman Rickover, 1957

The predicament we face is really quite profound.  I submit to you that people know this in their guts and the fact that they do goes a long way towards describing the feeling dread many people report they are carrying here at the start of 2017 and cannot seem to shake.

And of course they are.  Not having a plan for how to even feed 7.4 billion people, heading to 9 or 10 billion people, without massive fossil fuel calorie subsidies is a troubling thought.  If it’s not troubling, then more thinking needs to be applied.

Here’s the one chart that should sober everyone up.

A complex chart, so let me break it down.  The top line is the assumed rate of growth in energy use given the amount of economic growth that the world expects/desires/wants and that the financial system needs.  Without that growth our entire financial system will become unstable and probably collapse.  Not the smartest system to saddle ourselves with, but there you have it – it’s either expanding or collapsing (or threatening to do so).

With a functioning economy, all of our high-tech dreams can come to pass.  Without a functioning economy, you can forget about them.  It’s binary.  If you doubt this, just go visit Greece and check out their high tech industries, new product development, and public investment and deployment of new technology and infrastructure.  Or lack thereof, as is actually the case.  Ditto for Venezuela.

So we care about that top line continuing to grow smoothly, but as I’ve noted extensively, one of the most linear and durable relationships of them all is that between economic growth and growth in energy consumption.  If you want more economic growth, you are, by definition, asking for more energy growth.  That’s what the top black line is charting.

The bottom blue line in the above chart is the total amount of primary energy that fossil fuels will be able to deliver.  As you can see, someday, as Admiral Rickover noted, those finite fossil fuels cannot deliver any more energy, they plateau for about a decades, and then slowly disappear from the human experiment.

I have no doubts that the gap between the top black line and the bottom blue line can be reasonably filled by alternative energy sources until about 2030.  Solar, wind and the like, can almost certainly fill the void.  But I have severe doubts about the next 25 years, where the equivalent of 100% of the 2030 fossil fuel energy will have to be replaced…by other means.

First, humanity has never transitioned from one energy source to another in anything less than 50 years.  And that was always in the context of moving from a lower density (worse) energy source to a higher energy density (better) one.  Solar and wind are far less dense than oil.  Moving from wood to coal was easy and made sense because coal is a superior energy source compared to wood.

To drive this point home, here’s a fascinating map of world shipping traffic.  Stare at the number of dots plying the waters (each day is ~ 4 seconds of your time):


(Created by London-based data visualisation studio Kiln and the UCL Energy Institute)

Do you know how important shipping is to the world economy?  It’s enormously important.  Do you know how many of those dots are currently powered by electricity?  Zero.

Fast forward to 2030 when humanity has to figure out how to begin running at least half of those dots by other means over the next 25 years, and suddenly (I hope) the scale of the issue begins to take shape.  Wishful thinking isn’t going to cut it.

Same observations but for air travel:

Again, the number of planes in the above map running on electricity is zero, unless the map coincidentally happened to encompass the few days when the one solar plane in the world trundled across the screen slowly with a single person on board.

And yet here we are, in the finally days of 2016, without any obvious governmental attention to these important, vital matters.  Worse, the central banks are doing everything possible to deny that anything matters at all, besides highly elevated and rising financial asset prices.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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