But to be honest with you, I have problems with the physicist's side of the debate as well. Yes, energy supply and consumption issues will keep us from "growing" in the future at anywhere near the rates seen in say, the 1950s and 1960s. Yes Mr. Physicist—those days ARE over. And yes, you are absolutely correct that virtually all the "low-hanging fruit" in the realms of energy efficiency have been plucked.
I understand our physicist is striving to make the point that geometric growth in the real economy is mathematically absurd. Your modern economists like to think of themselves as math geniuses so it's probably a good idea to go after their self-percieved strengths. But in doing so, he loses much of his argument. On a practical level, in a world where folks have trouble planning as far out as one year, describing something that will happen in 1400 years pretty much loses everyone except historians and geologists. Even worse, while it is great fun to ridicule the real-world bullshit your typical economists must believe to go to work in the morning, the economist was right about one thing—there is a LOT of growth that is not only possible but necessary.
- If we are really to get serious about climate change, we simply MUST snuff out the vast majority of fires we start every day in order to survive. Converting from a fire-based to an all-electric economy is a ginormous project that could keep millions gainfully employed for at LEAST two generations.
- If we are really going to get serious about resource limits, we must stop the practices of linear industrialization—the path from the mine, to a product, to the landfill cannot continue. A conversion from linear industrialization to a closed-loop variety will be a project at least twice the size and complexity of the whole industrial revolution until now.
- Many of the possibilities for a more efficient lifestyles are sociological rather than physical. For example, while it is almost impossible to change the energy efficiency of a car once it has been built, you CAN make it 400% more energy efficient by loading up three passengers in a car pool.
Some more data that we have probably already passed the peak.
Exponential Economist Meets Finite PhysicistPosted on 2012-04-10
Some while back, I found myself sitting next to an accomplished economics professor at a dinner event. Shortly after pleasantries, I said to him, “economic growth cannot continue indefinitely,” just to see where things would go. It was a lively and informative conversation. I was somewhat alarmed by the disconnect between economic theory and physical constraints—not for the first time, but here it was up-close and personal. Though my memory is not keen enough to recount our conversation verbatim, I thought I would at least try to capture the key points and convey the essence of the tennis match—with some entertainment value thrown in.
Physicist: I’ve been thinking a bit about growth and want to run an idea by you. I claim that economic growth cannot continue indefinitely.
Economist: [chokes on bread crumb] Did I hear you right? Did you say that growth cannot continue forever?
Physicist: That’s right. I think physical limits assert themselves.
Economist: Well sure, nothing truly lasts forever. The sun, for instance, will not burn forever. On the billions-of-years timescale, things come to an end.
Physicist: Granted, but I’m talking about a more immediate timescale, here on Earth. Earth’s physical resources—particularly energy—are limited and may prohibit continued growth within centuries, or possibly much shorter depending on the choices we make. There are thermodynamic issues as well.
Economist: I don’t think energy will ever be a limiting factor to economic growth. Sure, conventional fossil fuels are finite. But we can substitute non-conventional resources like tar sands, oil shale, shale gas, etc. By the time these run out, we’ll likely have built up a renewable infrastructure of wind, solar, and geothermal energy—plus next-generation nuclear fission and potentially nuclear fusion. And there are likely energy technologies we cannot yet fathom in the farther future.
Physicist: Sure, those things could happen, and I hope they do at some non-trivial scale. But let’s look at the physical implications of the energy scale expanding into the future. So what’s a typical rate of annual energy growth over the last few centuries?
Economist: I would guess a few percent. Less than 5%, but at least 2%, I should think.
Total U.S. Energy consumption in all forms since 1650. The vertical scale is logarithmic, so that an exponential curve resulting from a constant growth rate appears as a straight line. The red line corresponds to an annual growth rate of 2.9%. Source: EIA.
Physicist: Right, if you plot the U.S. energy consumption in all forms from 1650 until now, you see a phenomenally faithful exponential at about 3% per year over that whole span. The situation for the whole world is similar. So how long do you think we might be able to continue this trend?
Economist: Well, let’s see. A 3% growth rate means a doubling time of something like 23 years. So each century might see something like a 15–20× increase. I see where you’re going. A few more centuries like that would perhaps be absurd. But don’t forget that population was increasing during centuries past—the period on which you base your growth rate. Population will stop growing before more centuries roll by.
Physicist: True enough. So we would likely agree that energy growth will not continue indefinitely. But two points before we continue: First, I’ll just mention that energy growth has far outstripped population growth, so that per-capita energy use has surged dramatically over time—our energy lives today are far richer than those of our great-great-grandparents a century ago [economist nods]. So even if population stabilizes, we are accustomed to per-capita energy growth: total energy would have to continue growing to maintain such a trend [another nod].
Second, thermodynamic limits impose a cap to energy growth lest we cook ourselves. I’m not talking about global warming, CO2 build-up, etc. I’m talking about radiating the spent energy into space. I assume you’re happy to confine our conversation to Earth, foregoing the spectre of an exodus to space, colonizing planets, living the Star Trek life, etc.
Economist: More than happy to keep our discussion grounded to Earth.
Physicist: [sigh of relief: not a space cadet] Alright, the Earth has only one mechanism for releasing heat to space, and that’s via (infrared) radiation. We understand the phenomenon perfectly well, and can predict the surface temperature of the planet as a function of how much energy the human race produces. The upshot is that at a 2.3% growth rate (conveniently chosen to represent a 10× increase every century), we would reach boiling temperature in about 400 years. [Pained expression from economist.] And this statement is independent of technology. Even if we don’t have a name for the energy source yet, as long as it obeys thermodynamics, we cook ourselves with perpetual energy increase.
Economist: That’s a striking result. Could not technology pipe or beam the heat elsewhere, rather than relying on thermal radiation?
Physicist: Well, we could (and do, somewhat) beam non-thermal radiation into space, like light, lasers, radio waves, etc. But the problem is that these “sources” are forms of high-grade, low-entropy energy. Instead, we’re talking about getting rid of the waste heatfrom all the processes by which we use energy. This energy is thermal in nature. We might be able to scoop up some of this to do useful “work,” but at very low thermodynamic efficiency. If you want to use high-grade energy in the first place, having high-entropy waste heat is pretty inescapable.
Economist: [furrowed brow] Okay, but I still think our path can easily accommodate at least a steady energy profile. We’ll use it more efficiently and for new pursuits that continue to support growth.
Physicist: Before we tackle that, we’re too close to an astounding point for me to leave it unspoken. At that 2.3% growth rate, we would be using energy at a rate corresponding to the total solar input striking Earth in a little over 400 years. We would consume something comparable to the entire sun in 1400 years from now. By 2500 years, we would use energy at the rate of the entire Milky Way galaxy—100 billion stars! I think you can see the absurdity of continued energy growth. 2500 years is not that long, from a historical perspective. We know what we were doing 2500 years ago. I think I know what we’re not going to be doing 2500 years hence.
Economist: That’s really remarkable—I appreciate the detour. You said about 1400 years to reach parity with solar output?
Physicist: Right. And you can see the thermodynamic point in this scenario as well. If we tried to generate energy at a rate commensurate with that of the Sun in 1400 years, and did this on Earth, physics demands that the surface of the Earth must be hotter than the (much larger) surface of the Sun. Just like 100 W from a light bulb results in a much hotter surface than the same 100 W you and I generate via metabolism, spread out across a much larger surface area.
Economist: So I’m as convinced as I need to be that growth in raw energy use is a limited proposition—that we must one day at the very least stabilize to a roughly constant yearly expenditure. At least I’m willing to accept that as a starting point for discussing the long term prospects for economic growth. But coming back to your first statement, I don’t see that this threatens the indefinite continuance of economic growth.
For one thing, we can keep energy use fixed and still do more with it in each passing year via efficiency improvements. Innovations bring new ideas to the market, spurring investment, market demand, etc. These are things that will not run dry. We have plenty of examples of fundamentally important resources in decline, only to be substituted or rendered obsolete by innovations in another direction.
Physicist: Yes, all these things happen, and will continue at some level. But I am not convinced that they represent limitless resources.
Economist: Do you think ingenuity has a limit—that the human mind itself is only so capable? That could be true, but we can’t credibly predict how close we might be to such a limit.
Physicist: That’s not really what I have in mind. Let’s take efficiency first. It is true that, over time, cars get better mileage, refrigerators use less energy, buildings are built more smartly to conserve energy, etc. The best examples tend to see factor-of-two improvements on a 35 year timeframe, translating to 2% per year. But many things are already as efficient as we can expect them to be. Electric motors are a good example, at 90% efficiency. It will always take 4184 Joules to heat a liter of water one degree Celsius. In the middle range, we have giant consumers of energy—like power plants—improving much more slowly, at 1% per year or less. And these middling things tend to be something like 30% efficient. How many more “doublings” are possible? If many of our devices were 0.01% efficient, I would be more enthusiastic about centuries of efficiency-based growth ahead of us. But we may only have one more doubling in us, taking less than a century to realize.
Economist: Okay, point taken. But there is more to efficiency than incremental improvement. There are also game-changers. Tele-conferencing instead of air travel. Laptop replaces desktop; iPhone replaces laptop, etc.—each far more energy frugal than the last. The internet is an example of an enabling innovation that changes the way we use energy.
The evening’s after-dinner keynote speech began, so we had to shelve the conversation. Reflecting on it, I kept thinking, “This should not have happened. A prominent economist should not have to walk back statements about the fundamental nature of growth when talking to a scientist with no formal economics training.” But as the evening progressed, the original space in which the economist roamed got painted smaller and smaller.
First, he had to acknowledge that energy may see physical limits. I don’t think that was part of his initial virtual mansion.
Next, the efficiency argument had to shift away from straight-up improvements to transformational technologies. Virtual reality played a prominent role in this line of argument.
Finally, even having accepted the limits to energy growth, he initially believed this would prove to be of little consequence to the greater economy. But he had to ultimately admit to a floor on energy price and therefore an end to traditional growth in GDP—against a backdrop fixed energy.
I got the sense that this economist’s view on growth met some serious challenges during the course of the meal. Maybe he was not putting forth the most coherent arguments that he could have made. But he was very sharp and by all measures seemed to be at the top of his game. I choose to interpret the episode as illuminating a blind spot in traditional economic thinking. There is too little acknowledgement of physical limits, and even the non-compliant nature of humans, who may make choices we might think to be irrational—just to remain independent and unencumbered.
I recently was motivated to read a real economics textbook: one written by people who understand and respect physical limitations. The book, called Ecological Economics, by Herman Daly and Joshua Farley, states in its Note to Instructors:
…we do not share the view of many of our economics colleagues that growth will solve the economic problem, that narrow self-interest is the only dependable human motive, that technology will always find a substitute for any depleted resource, that the market can efficiently allocate all types of goods, that free markets always lead to an equilibrium balancing supply and demand, or that the laws of thermodynamics are irrelevant to economics.
This is a book for me!
The conversation recreated here did challenge my own understanding as well. I spent the rest of the evening pondering the question: “Under a model in which GDP is fixed—under conditions of stable energy, stable population, steady-state economy: if we accumulate knowledge, improve the quality of life, and thus create an unambiguously more desirable world within which to live, doesn’t this constitute a form of economic growth?”
I had to concede that yes—it does. This often falls under the title of “development” rather than “growth.” I ran into the economist the next day and we continued the conversation, wrapping up loose ends that were cut short by the keynote speech. I related to him my still-forming position that yes, we can continue tweaking quality of life under a steady regime. I don’t think I ever would have explicitly thought otherwise, but I did not consider this to be a form of economic growth. One way to frame it is by asking if future people living in a steady-state economy—yet separated by 400 years—would always make the same, obvious trades? Would the future life be objectively better, even for the same energy, same GDP, same income, etc.? If the answer is yes, then the far-future person gets more for their money: more for their energy outlay. Can this continue indefinitely (thousands of years)? Perhaps. Will it be at the 2% per year level (factor of ten better every 100 years)? I doubt that.
So I can twist my head into thinking of quality of life development in an otherwise steady-state as being a form of indefinite growth. But it’s not your father’s growth. It’s not growing GDP, growing energy use, interest on bank accounts, loans, fractional reserve money, investment. It’s a whole different ballgame, folks. Of that, I am convinced. Big changes await us. An unrecognizable economy. The main lesson for me is that growth is not a “good quantum number,” as physicists will say: it’s not an invariant of our world. Cling to it at your own peril. more
Yes, MOST of the reduction in oil consumption in USA is due to the continuing collapse of the real economy. But there are also cultural shifts. I regularly meet young people these days who not only have NO idea what is happening beneath the hoods of their cars, but literally have not seen anyone drive a car with a manual transmission. When I consider how central cars were to my own youth, I find this almost incomprehensible. Of course, today's youth have no idea how it was that two bucks bought 7 gallons of gas and powered a cruise until dawn.
The New EIA Oil Supply Data Confirms Your Peak Oil FearsGail E. Tverberg, The Oil Drum | Apr. 13, 2012
The US Energy Information Administration (EIA) recently released full-year 2011 world oil production data. In this post, I would like show some graphs of recent data, and provide some views as to where this leads with respect to future production.
World oil supply is not growing very much
The fitted line in Figure 1 suggests a “normal” growth in oil supplies (including substitutes) of 1.6% a year, based on the 1983 to 2005 pattern, or total growth of 10.2% between 2005 and 20011. Instead of 10.2%, actual growth between 2005 and 2010 amounted to only 3.0% including crude oil and substitutes.
The shortfall in oil production relative to what would have been expected based on the 1983-2005 growth pattern amounted to 4.7 million barrels in 2011. This is far more than any country claims as spare capacity. This is no doubt one of the reasons why oil prices are as high they are now. These high oil prices tend to interfere with economic growth of oil importing nations.
The shortfall in growth especially occurred in crude oil.
Figure 1. World crude oil and other "liquids" supply has dropped below the 1983-2005 trend line in recent years. Actual data is from EIA International Petroleum Monthly, through December 2011. more
TRANSPORTATION AND THE NEW GENERATIONWhy Young People Are Driving Less and What It Means for Transportation Policy
RELEASED BY: U.S. PIRG EDUCATION FUND AND THE FRONTIER GROUP
RELEASE DATE: THURSDAY, APRIL 5, 2012
DOWNLOAD REPORT (PDF)
From World War II until just a few years ago, the number of miles driven annually on America’s roads steadily increased. Then, at the turn of the century, something changed: Americans began driving less. By 2011, the average American was driving 6 percent fewer miles per year than in 2004.
The trend away from driving has been led by young people. From 2001 and 2009, the average annual number of vehicle-miles traveled by young people (16 to 34-year-olds) decreased from 10,300 miles to 7,900 miles per capita – a drop of 23 percent. The trend away from steady growth in driving is likely to be long-lasting – even once the economy recovers. Young people are driving less for a host of reasons – higher gas prices, new licensing laws, improvements in technology that support alternative transportation, and changes in Generation Y’s values and preferences – all factors that are likely to have an impact for years to come.
Federal and local governments have historically made massive investments in new highway capacity on the assumption that driving will continue to increase at a rapid and steady pace. The changing transportation preferences of young people – and Americans overall – throw those assumptions into doubt. The time has come for transportation policy to reflect the needs and desires of today’s Americans – not the worn-out conventional wisdom from days gone by.
The recession has played a role in reducing the miles driven in America, especially by young people. People who are unemployed or underemployed have difficulty affording cars, commute to work less frequently if at all, and have less disposable income to spend on traveling for vacation and other entertainment. The trend toward reduced driving, however, has occurred even among young people who are employed and/or are doing well financially. more