Supply routes will rework themselves. Coal mines will be reopened to fuel power plants. Oil will be used to fuel transportation.
The only question is whether the people of Europe (and in some parts, the US) will throw the deranged Climate Cultists out of office and reenergize Europe, or if the old continent implodes into a second Medieval Period. The choice is theirs.
I read a paper on the stagflation period in the 70’s and it was surmised that the opening of the Alaskan pipeline brought an end to the stagflation period in the US with cheaper energy on tap. Oil started flowing through the pipeline in June 1977.
Cheap energy is the driver of economies. Without it, stagnation.
There are approximately 8000 Chinese characters in common use. To take full advantage of movable type you need a phonetic alphabet, or at least a syllabary such as with Hindi or Punjabi, otherwise you first have to learn an excessive amount of characters which sets a boundary on general literacy. Thus general literacy was achieved in Europe long before China, even though China had movable type at an earlier date.
Early in the revolution the Communist Party recognized the problem and introduced Pinyin as a way of writing Chinese in the Roman alphabet. https://en.wikipedia.org/wiki/Pinyin
Even using a word processor in Chinese can be difficult as you have to either search a data base of characters or type in Pinyin and select among the various characters returned based on the Pinyin pronunciation. Japanese has the same problem, although not as difficult since they have the Hiragana syllabary as starting point, or can write in pure Hiragana and still be understood since Hiragana is taught in the early grades before Kanji (Chinese characters) is introduced.
The 1970s gas crisis taught me about economics and the advantages of capitalism. You could see supply vs demand in the long lines of cars waiting to fill up. It also schooled me in rationing. Capitalism breaks down when we pay in time and luck rather than a higher price. Higher prices are ever so much nicer, even for the poor student I was. I fear politicians will again try rationing to keep prices low. Lower energy plus much less time and agency, double the trouble!
There is evidence that crude oil is not really "dinosaur juice", but is produced in the deep earth by chemical processes, continuosly seeping up into reservoirs near the surface. Whether or not we are consuming it faster than it is replenished is a different matter.
"The errors concerning the abundances of petroleum on Earth all obtain from a common, but fundamental, misunderstanding about petroleum itself... An eighteenth-century notion which has been thoroughly discredited in this century: the hypothesis that petroleum might somehow originate from biological detritus in sediments near the surface of the Earth."
I thought this was widely understood and accepted now. That the fossil origin of oil was advanced by the powers that be for commercial reasons, as it created a scarcity value on oil when it was actually quite abundant. That some old oil wells slowly refilled being evidence it's not fossils. The unknown is how abundant oil actually is. I've read some theorising earthquakes have increased in certain locations as oil is the earth's lubricant.
Hi John...if you haven't yet read Thomas Gold's The Deep Hot Biosphere. American scientist who lays out several very convincing arguments to the non-dino origin of oil.
There is no doubt a strong correlation twixt energy consumption and GDP. I got links on this that go into considerable detail and moreover per the charts in this article - it seems fairly evident whose GDP is on the rise and whose is on the downfall. No doubt in this. Not as if GDP is a good measure, but facts are facts and it is evident. One country is growing and the other is in decline.
Oh well, China holds the cards in this regard, but there is truly no way they could ever come across the oceans (as if they desire to do that) and take over beds and bathrooms. I doubt that is in the playbook. So why the hell is so much energy and manpower being wasted in attempting to push a narrative that obviously has not only lost its way - but has basically been PROVEN wrong. There comes a time to retreat, but in the absence of that - there comes a time to literally split up.
~
So chin up and get ready to prove your mettle - either that or succumb to the ideology of those who think they can dominate - cause obviously they can't - and this is proven. They have been proven wrong.
~
So get ready to be diminutive and give up efforts to try to dominate - cause that has been shown to be a dead end road - and now we are at the end of the road. And that is that.
~
May the best ideas prevail and lets us all hope China understands the concepts Kropotkin expressed in his seminal work Mutual Aid, but above and beyond that - let us hope this cancer of 20th century "domination" ideology is put to rest - it has caused nothing but needless harm.
The Americans are the biggest customers ever for the Chinese. They handle the obtuse Americans with kid gloves because we are, after all, their customers. Similarly the Russians could sell their oil/gas/commodities to the clueless Europeans who never have enough of war. They'd (the Russians) happily sell their products all day long. It's the malicious West that is always looking for another war. Embarrassing, no? I had coffee with a mate today who's thinking of patching neighborhood potholes in my American city because the feckless city department doesn't seem to be up to the task. A city pool isn't opening this summer because of financial constraints. Screw the kids. I assume the boodle is shipped off to West Asia to support more genocide and warfare. Depressing.
No doubt, but think about it - at the end of the day what would you rather be:
The supplier or the customer?
I mean truly - the supplier is in the drivers seat, and if they decide not to supply - the customer is out of luck. But maybe that is what is needed - let the customer get their own supplies if they can - and if the supplier is supplying goods desired, then odds are there are other customers ready and willing.
I'd rather be the supplier, but more than that - I choose to be self-sufficient locally.
Amazing article! I haven't seen anything like this depth of analysis since Doug Noland's Credit Bubble Bulletin. Doug was very much a voice in the wilderness back in the early 2000s. Do you feel like you're in a similar position, or are people actually starting to take notice?
If we take a closer look at the energy consumption of a few nations below (Fig. 2) up to a more recent time, we can see there is one very anomalous nation among the four countries/blocks depicted. China sticks out like a sore thumb. Given the chart above and the one below, care to guess in which direction the GDP is going in the four nations during this time period?
Art Berman is witty and wise just like knowon. Couldn’t agree more on your comments on transition. This is a profoundly critical time for so many reasons but it seems like the east is actually planning while the west is posturing and bullying. As usual, like many of us, I look at this through the lens of my own universe- criminal law and the criminal mind. Knowon makes a profound point that the stuff in the ground was always more important than the stuff in the skull. But I think this stuff is some much more than energy. It’s an incredible addiction perhaps the most profound addiction the human race has ever faced . Why wouldn’t it be when it raises you to unimaginable human highs. Addiction has a “baked” in price few analysts consider. So perhaps aggression self destruction deception theft avoidance and mental health will play a major role in this critical time - something louder and crazier than any western leader. Just my 2sense
The plague halving the population of Europe and the Mediterranean lands might have had something to do with increasing the price of labour. Inanimate machines look a lot more attractive in these circumstances, cf Belich.
Back in the peak oil days they used to say , ultimatly oil price and avaibility will not be determined by geology but by above ground factors.
Thought about that a lot those last few days, since there seems to be some some Godzilla sized above ground factor messing with my gas bill.
I see the chinese drive to climb that ladder but as far as I can see, all of it is still dependant on oil. We pretty much tried nuclear and it didnt work out. If anything thorium is a worse fuel.
I wont even go into solar and wind, the EROEI just isnt there.
Sooner or latter we will come down from that ladder.
My last few posts have dived into this, as I have been inclined to do since learning about The Limits To Growth in February 1974, when that VW beetle picture might have been take.
Why care about GDP at all? Price inflation, mainly due to the perpetual geometric growth of the money supply but also due to actual scarcity - which forces people to spend their fiat savings into circulation, inflates the GDP. Price deflation, including due to abundance, contracts the GDP. Why does GDP matter? And that's before we even figure the rise in the general level of prices caused by the perpetual expansion of the money supply required by capitalism in order to simply continue operating for a while longer.
Caring about GDP (at all) is a symptom.
Energy and everything else required by civilised society could be obtained or produced domestically, if not for capitalism and the hyperinflationary domestic economic environments of all net importing capitalist countries making domestic extraction, refinement or production uncompetitive with imports and also unaffordable to domestic consumers/potential buyers.
There is no way out or forward except moving beyond money, banks and capitalism (for financial profit operated society) altogether.
There's a reason the Kardashev civilisation scale uses energy as its metric 😉 Excellent article!
Nuclear power for large scale enterprise and solar for small scale and distributed homes (ie those not in cities where economies of scale can operate successfully) would, to me, seem to be the best option in the long term.
The best way to kick-start the next rung would be to make energy costs to the consumer free, with the ultimate goal of providing your populace with a strong foundation from which to build their lives and projects. THAT should be the overriding function of government.
My take goes the other way - make it EXPENSIVE. Either people collaborate and build a fault-tolerant net, or they invest in solar and batteries for the out-of-reach home. The price does the work either way.
Free energy removes the forcing function. You end up with passive consumers waiting on the next outage rather than citizens with skin in the system.
I do agree with you that free causes apathy 😊👍 Personally I'm in the "investing in solar and batteries" camp as I'm trying to get off-grid and be energy independent. It's definitely expensive up front! But the long term benefits are for sure worth it.
As an optimist I do wish for the Star Trek type future of sustainable abundance, but the realist part of me understands that that is easier said than done since all of society gets a vote on things, and most vote for anything that gives them free stuff now regardless of what that costs in the long run 😂
I think we're 100% aligned there. Both on the self-sufficiency front as well as the view on society as a whole.
Although I don't feel solar and batteries are that expensive. My solar panels of 8y old have paid for themselves by now. And they're still good for another ... what ? ... 17y at least? (ok, at slightly reduced efficiency, but I overdimensioned it at the time, so I'm good).
Now a battery... Gotta convince the wife about the monetary benefits for that. Self-sufficiency arguments don't cut it there.
The first time your AC won't work during a heat wave (or the heat won't work during a hard freeze) might convince your wife that the comfort 'benefits' of a solar battery system are worth a loss of "monetary benefits".
If you have any handyman expertise in electrical wiring - my husband was able to install our battery backup himself (using a YouTube tutorial!), which cut the total price by about 50% - though that was over 10 yrs. ago now....
Yeah, I can do it no problem. I think I have about every available tool in the hardware store somewhere gathering dust here 😎. If that makes me handy... That's a topic for another day.
Coal-fired energy is down as a percentage of all the power that China produces. They don't have fewer coal-fired power plants, they just have WAY more solar, wind, nuclear and hydropower coming on line. A single dam they're building in the Himalayas will produce more electricity than the entire electrical grid of Germany. https://en.wikipedia.org/wiki/Medog_Hydropower_Station
Bear in mind too that China's new coal-fired plants have the latest technologies and thermal efficiencies. Yes, it's still fossil fuel but less is used per kilowatt hour.
Capacity isn't generation. The chart in the post shows it directly - roughly 490 TWh of new wind+solar against a 75 TWh coal decline. Renewables more than covered the 5% demand growth, so coal had to give ground.
The "new plant a day" is real though. China commissioned ~95GW of coal in 2025 with another 291GW in the pipeline, mostly inertia from the 2022-2023 permitting surge (~100GW/year approved back then). But capacity factors keep dropping: 60% in 2011, 48% in 2025, Wood Mackenzie projects 32% by 2035. The fleet is shifting from baseload to backup. First simultaneous coal-generation drop in China and India since 1973.
It’s like this: ALL businesses are centered around one thing. That would be cheap accessible energy. This makes the ones who are not centered around it too.
No1 - your ability to distill the complex into a readable and understandable perspective is much appreciated - thank you!
I'm not too worried.
Supply routes will rework themselves. Coal mines will be reopened to fuel power plants. Oil will be used to fuel transportation.
The only question is whether the people of Europe (and in some parts, the US) will throw the deranged Climate Cultists out of office and reenergize Europe, or if the old continent implodes into a second Medieval Period. The choice is theirs.
I read a paper on the stagflation period in the 70’s and it was surmised that the opening of the Alaskan pipeline brought an end to the stagflation period in the US with cheaper energy on tap. Oil started flowing through the pipeline in June 1977.
Cheap energy is the driver of economies. Without it, stagnation.
"The Chinese had .... movable-type printing....."
There are approximately 8000 Chinese characters in common use. To take full advantage of movable type you need a phonetic alphabet, or at least a syllabary such as with Hindi or Punjabi, otherwise you first have to learn an excessive amount of characters which sets a boundary on general literacy. Thus general literacy was achieved in Europe long before China, even though China had movable type at an earlier date.
Early in the revolution the Communist Party recognized the problem and introduced Pinyin as a way of writing Chinese in the Roman alphabet. https://en.wikipedia.org/wiki/Pinyin
Even using a word processor in Chinese can be difficult as you have to either search a data base of characters or type in Pinyin and select among the various characters returned based on the Pinyin pronunciation. Japanese has the same problem, although not as difficult since they have the Hiragana syllabary as starting point, or can write in pure Hiragana and still be understood since Hiragana is taught in the early grades before Kanji (Chinese characters) is introduced.
The 1970s gas crisis taught me about economics and the advantages of capitalism. You could see supply vs demand in the long lines of cars waiting to fill up. It also schooled me in rationing. Capitalism breaks down when we pay in time and luck rather than a higher price. Higher prices are ever so much nicer, even for the poor student I was. I fear politicians will again try rationing to keep prices low. Lower energy plus much less time and agency, double the trouble!
There is evidence that crude oil is not really "dinosaur juice", but is produced in the deep earth by chemical processes, continuosly seeping up into reservoirs near the surface. Whether or not we are consuming it faster than it is replenished is a different matter.
"The errors concerning the abundances of petroleum on Earth all obtain from a common, but fundamental, misunderstanding about petroleum itself... An eighteenth-century notion which has been thoroughly discredited in this century: the hypothesis that petroleum might somehow originate from biological detritus in sediments near the surface of the Earth."
https://www.csun.edu/~vcgeo005/Energy.html
Interesting theory! I'm going to save this comment and check it out.
Lots of credible papers on the subject, for example:
https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2008RG000270
Oops...Thomas Gold was actually Austrian but had American citizenship. Here's his Wikipedia bio:
https://en.wikipedia.org/wiki/Thomas_Gold
This might help your research: https://greenbusinessbarbados.com/does-titan-have-fossil-fuels.html
I thought this was widely understood and accepted now. That the fossil origin of oil was advanced by the powers that be for commercial reasons, as it created a scarcity value on oil when it was actually quite abundant. That some old oil wells slowly refilled being evidence it's not fossils. The unknown is how abundant oil actually is. I've read some theorising earthquakes have increased in certain locations as oil is the earth's lubricant.
Hi John...if you haven't yet read Thomas Gold's The Deep Hot Biosphere. American scientist who lays out several very convincing arguments to the non-dino origin of oil.
There is no doubt a strong correlation twixt energy consumption and GDP. I got links on this that go into considerable detail and moreover per the charts in this article - it seems fairly evident whose GDP is on the rise and whose is on the downfall. No doubt in this. Not as if GDP is a good measure, but facts are facts and it is evident. One country is growing and the other is in decline.
Oh well, China holds the cards in this regard, but there is truly no way they could ever come across the oceans (as if they desire to do that) and take over beds and bathrooms. I doubt that is in the playbook. So why the hell is so much energy and manpower being wasted in attempting to push a narrative that obviously has not only lost its way - but has basically been PROVEN wrong. There comes a time to retreat, but in the absence of that - there comes a time to literally split up.
~
So chin up and get ready to prove your mettle - either that or succumb to the ideology of those who think they can dominate - cause obviously they can't - and this is proven. They have been proven wrong.
~
So get ready to be diminutive and give up efforts to try to dominate - cause that has been shown to be a dead end road - and now we are at the end of the road. And that is that.
~
May the best ideas prevail and lets us all hope China understands the concepts Kropotkin expressed in his seminal work Mutual Aid, but above and beyond that - let us hope this cancer of 20th century "domination" ideology is put to rest - it has caused nothing but needless harm.
The Americans are the biggest customers ever for the Chinese. They handle the obtuse Americans with kid gloves because we are, after all, their customers. Similarly the Russians could sell their oil/gas/commodities to the clueless Europeans who never have enough of war. They'd (the Russians) happily sell their products all day long. It's the malicious West that is always looking for another war. Embarrassing, no? I had coffee with a mate today who's thinking of patching neighborhood potholes in my American city because the feckless city department doesn't seem to be up to the task. A city pool isn't opening this summer because of financial constraints. Screw the kids. I assume the boodle is shipped off to West Asia to support more genocide and warfare. Depressing.
No doubt, but think about it - at the end of the day what would you rather be:
The supplier or the customer?
I mean truly - the supplier is in the drivers seat, and if they decide not to supply - the customer is out of luck. But maybe that is what is needed - let the customer get their own supplies if they can - and if the supplier is supplying goods desired, then odds are there are other customers ready and willing.
I'd rather be the supplier, but more than that - I choose to be self-sufficient locally.
> https://no01.substack.com/p/china-usa 😉
Amazing article! I haven't seen anything like this depth of analysis since Doug Noland's Credit Bubble Bulletin. Doug was very much a voice in the wilderness back in the early 2000s. Do you feel like you're in a similar position, or are people actually starting to take notice?
I think (hope/believe/expect) the latter actually.
The Aether is noticing.
I hope browntsunami doesn't mind me posting this article of his from years ago, but it is definitely on topic, so here it is:
https://substack.com/@browntsunami/p-65371886
I call this text out in particular I quote:
~
If we take a closer look at the energy consumption of a few nations below (Fig. 2) up to a more recent time, we can see there is one very anomalous nation among the four countries/blocks depicted. China sticks out like a sore thumb. Given the chart above and the one below, care to guess in which direction the GDP is going in the four nations during this time period?
~
BK
Good article. In crude terms, real economy is 90% correlated to oil consumption. (Yes ;-)
Art Berman is witty and wise just like knowon. Couldn’t agree more on your comments on transition. This is a profoundly critical time for so many reasons but it seems like the east is actually planning while the west is posturing and bullying. As usual, like many of us, I look at this through the lens of my own universe- criminal law and the criminal mind. Knowon makes a profound point that the stuff in the ground was always more important than the stuff in the skull. But I think this stuff is some much more than energy. It’s an incredible addiction perhaps the most profound addiction the human race has ever faced . Why wouldn’t it be when it raises you to unimaginable human highs. Addiction has a “baked” in price few analysts consider. So perhaps aggression self destruction deception theft avoidance and mental health will play a major role in this critical time - something louder and crazier than any western leader. Just my 2sense
The plague halving the population of Europe and the Mediterranean lands might have had something to do with increasing the price of labour. Inanimate machines look a lot more attractive in these circumstances, cf Belich.
This one was a real banger.
Back in the peak oil days they used to say , ultimatly oil price and avaibility will not be determined by geology but by above ground factors.
Thought about that a lot those last few days, since there seems to be some some Godzilla sized above ground factor messing with my gas bill.
I see the chinese drive to climb that ladder but as far as I can see, all of it is still dependant on oil. We pretty much tried nuclear and it didnt work out. If anything thorium is a worse fuel.
I wont even go into solar and wind, the EROEI just isnt there.
Sooner or latter we will come down from that ladder.
The numbers I've seen, and what Art Berman cites, are that the current shortfall in oil availability is more than 1973 and 1979 combined.
Yes, modern industrial economy, our life support system is a "dissipative structure", a "heat engine", if you would.
This understanding is nothing new, it is called "Thermoeconomics". Engineers employ it whan making large systems like factories and reaction-chambers.
Tim Morgan at Surplus energy Economics has this well worked out and posts about every couple of weeks. https://surplusenergyeconomics.wordpress.com/
My last few posts have dived into this, as I have been inclined to do since learning about The Limits To Growth in February 1974, when that VW beetle picture might have been take.
10 gallons would fill a beetle up.
Competing For Less Pie https://drjohnsblog.substack.com/p/competing-for-less-pie
Planning For Summer https://drjohnsblog.substack.com/p/planning-for-summer
Assuming We Have Food https://drjohnsblog.substack.com/p/assuming-we-have-food
Why care about GDP at all? Price inflation, mainly due to the perpetual geometric growth of the money supply but also due to actual scarcity - which forces people to spend their fiat savings into circulation, inflates the GDP. Price deflation, including due to abundance, contracts the GDP. Why does GDP matter? And that's before we even figure the rise in the general level of prices caused by the perpetual expansion of the money supply required by capitalism in order to simply continue operating for a while longer.
Caring about GDP (at all) is a symptom.
Energy and everything else required by civilised society could be obtained or produced domestically, if not for capitalism and the hyperinflationary domestic economic environments of all net importing capitalist countries making domestic extraction, refinement or production uncompetitive with imports and also unaffordable to domestic consumers/potential buyers.
There is no way out or forward except moving beyond money, banks and capitalism (for financial profit operated society) altogether.
There's a reason the Kardashev civilisation scale uses energy as its metric 😉 Excellent article!
Nuclear power for large scale enterprise and solar for small scale and distributed homes (ie those not in cities where economies of scale can operate successfully) would, to me, seem to be the best option in the long term.
The best way to kick-start the next rung would be to make energy costs to the consumer free, with the ultimate goal of providing your populace with a strong foundation from which to build their lives and projects. THAT should be the overriding function of government.
My take goes the other way - make it EXPENSIVE. Either people collaborate and build a fault-tolerant net, or they invest in solar and batteries for the out-of-reach home. The price does the work either way.
Free energy removes the forcing function. You end up with passive consumers waiting on the next outage rather than citizens with skin in the system.
I do agree with you that free causes apathy 😊👍 Personally I'm in the "investing in solar and batteries" camp as I'm trying to get off-grid and be energy independent. It's definitely expensive up front! But the long term benefits are for sure worth it.
As an optimist I do wish for the Star Trek type future of sustainable abundance, but the realist part of me understands that that is easier said than done since all of society gets a vote on things, and most vote for anything that gives them free stuff now regardless of what that costs in the long run 😂
I think we're 100% aligned there. Both on the self-sufficiency front as well as the view on society as a whole.
Although I don't feel solar and batteries are that expensive. My solar panels of 8y old have paid for themselves by now. And they're still good for another ... what ? ... 17y at least? (ok, at slightly reduced efficiency, but I overdimensioned it at the time, so I'm good).
Now a battery... Gotta convince the wife about the monetary benefits for that. Self-sufficiency arguments don't cut it there.
The first time your AC won't work during a heat wave (or the heat won't work during a hard freeze) might convince your wife that the comfort 'benefits' of a solar battery system are worth a loss of "monetary benefits".
If you have any handyman expertise in electrical wiring - my husband was able to install our battery backup himself (using a YouTube tutorial!), which cut the total price by about 50% - though that was over 10 yrs. ago now....
Yeah, I can do it no problem. I think I have about every available tool in the hardware store somewhere gathering dust here 😎. If that makes me handy... That's a topic for another day.
How can China’s electricity production from coal be down when they are building a new coal plant every day?
Coal-fired energy is down as a percentage of all the power that China produces. They don't have fewer coal-fired power plants, they just have WAY more solar, wind, nuclear and hydropower coming on line. A single dam they're building in the Himalayas will produce more electricity than the entire electrical grid of Germany. https://en.wikipedia.org/wiki/Medog_Hydropower_Station
Bear in mind too that China's new coal-fired plants have the latest technologies and thermal efficiencies. Yes, it's still fossil fuel but less is used per kilowatt hour.
Capacity isn't generation. The chart in the post shows it directly - roughly 490 TWh of new wind+solar against a 75 TWh coal decline. Renewables more than covered the 5% demand growth, so coal had to give ground.
The "new plant a day" is real though. China commissioned ~95GW of coal in 2025 with another 291GW in the pipeline, mostly inertia from the 2022-2023 permitting surge (~100GW/year approved back then). But capacity factors keep dropping: 60% in 2011, 48% in 2025, Wood Mackenzie projects 32% by 2035. The fleet is shifting from baseload to backup. First simultaneous coal-generation drop in China and India since 1973.
(https://www.carbonbrief.org/analysis-coal-power-drops-in-china-and-india-for-first-time-in-52-years-after-clean-energy-records/)
Wasn't that the dam that slows down the rotation of the earth by a fraction of a second?
That's the 3 Gorges Dam, currently the world's largest hydro producer.
I’m questioning the chart. It doesn’t say as a percent of the total. It shows a decline in TKwh.
It’s like this: ALL businesses are centered around one thing. That would be cheap accessible energy. This makes the ones who are not centered around it too.