“Peak Oil” or worse : “Peak Everything” is finally here…?

The book “Limits to Growth“, by Dennis L. Meadows et. al, was published 1972, outlining a story that unless our civilization changed its ways and fundamental principles, the result will be a rather sudden and uncontrollable decline in population and (material) standard of living. This downfall was projected to occur before year 2100: (the book can be downloaded here)

From “Limits to Growth”, by Dennis L. Meadows

Earlier today, I saw a news flash that food prices in Germany are expected to rise by at least 30% during this year, and we’ve all seen what’s happened to fuel and electricity prices recently. Since I own my own house, I’m also interested in building material prices, for repairs and renovation, and also those prices have taken huge jumps upwards during the past 12 months. By 100% for some materials.

So, not least due to Covid, and now, the Russia-Ukraine crisis, we have accelerating inflation worldwide. Many of you might think that as soon as the Ukraine crisis is over things will return to normal…? I don’t think so. I believe the world is now rapidly reaching its Material Peak. The main reason being that exponential growth on a finite planet can only proceed to a point, before a decline is inevitable, and at least according to The Limits to Growth, as well as other credible sources, such as Nate Hagen’s “The Great Simplification“, we are now quickly approaching that point. (For a more detailed study of Hagen’s thinking, see here. )

ETERNAL GROWTH – The Guiding Principle of the modern Civilization

Our world is driven by growth. Our economic system is driven by growth. Our contemporary (relative) prosperity,health, life expectancy and welfare is driven by growth, and borrowing from the future (loans and debt). Basically, our civilization, as it’s been shaped over past few centuries, can not continue existing without continuous, exponential growth.

Growth is fundamentally driven by increases in productivity, globalization, specialization and global supply chains spanning 6 continents, but also, during the past decades, by increasing amounts of stealth of resources from future generations by means of loans and debt; current generations consume much more than their fair share. We are well above the planet’s Carrying Capacity.

Real Productivity is driven by innovation (technology) and most fundamentally, extraction and use of energy. Energy is needed for everything we do. As a planet, we consume more and more energy each year.

Thus, energy, in particular, cheap, easily accessed , extracted and transported energy, is the true currency of our modern world. The more, the cheaper the energy we use, the more economic growth. The more food and things. The more “prosperity” and “welfare”. At least of the material kind. The more of us on the planet. But also the more consumption, pollution and environmental & ecological damage.

That is, increasing use of energy does not only make each and everyone of us on the planet able to consume more, more prosperous, in materialistic terms, but it also enables the global population to grow. Super-exponentially, during the past 100 or so years, in fact. So, for each year, there’s more of us on the planet, consuming ever more of the finite resources of the planet.

Have a look at the below graph, showing global population from 1700’s to 2000:

It took about 100 years to double the population between 1700 and 1800, from half a billion to a billion. Then, it took a bit more than 100 years for the next doubling, between 1800 and about end of WW1. But then, after WW1, it took only about 75 years to double again, and the last data point on the graph got doubled in about 30 years. And all data point to population growth continuing accelerating.

So, for every year, there’s ever more of us consuming the FINITE resources of the planet. SInce WW2, globalization and technology has kept this “resource extraction machine” going. Ever faster. Growing exponentially. But can that continue…?

Our global supply chains were enabled by cheap energy, allowing for goods and services to be extracted, produced, shipped and consumed worldwide, in an impressive 24/7 worldwide logistics just-in-time chain, which unfortunately also has made the world fragile, since every single country is now fully dependent on this complex transportation and logistics network. This global supply chain also contributes massively to global energy use as well as pollution – after all, any kind of transportation demands energy in one form or another, and even if we eventually will move to more electric than fossil fuel based transportation energy, that doesn’t mean that our future transports will be pollution free : naively, we might think that electrified transportation (electric cars, buses lorries, ships etc) have no externalties, such as pollution or environment destruction… Not so. For instance, a single Tesla battery demands a hole of 5m x 5m x 5m to be excavated in order to find the necessary minerals for the battery. That corresponds to about 250000 kg of dirt to be dug up, transported, refined and processed for a single battery.

The world has also been able to avoid major wars (direct wars between significant world powers) since WW2, thanks to the ever increasing amount of ever cheaper goods and services available, enabled by the ever growing GDP, enabled by cheap energy. Wars are typically fought over scarce resources, and when globalization enabled an abundance of stuff for “everyone”, there’s no point fighting wars – it’s better to do business with each other – TRADE, NOT WAR!

But can this paradigm of “eternal growth & peace” be sustained on a finite planet…? What happens if various finite resources, such as energy becomes scarce…? Look at Germany now, with the Ukraine-Russia crisis : Germany is fully dependent on Russian gas for everything, and they are now in deep Sh*t due that dependency. The major energy producers of the world are fully able and capable of using their energy supply as a weapon for geopolitical power, as Russia is doing as we speak. Future wars might not be that unlikely, after all.

The role of Fossil Hydrocarbons for our current material prosperity

What’s enabled humanity to so quickly increase its population size, productivity and prosperity…? Answer : OIL! Or more correctly : global access to an ubiquitous source of cheap energy, in the form of fossil hydrocarbons: coal, oil and gas.

We started serious burning of oil during late 1900:th century, and since then, energy use has grown rapidly. Basically, energy enabled industrialization, and with that, growth.

But exponential growth can only last so far in a physical world, until it hits iron law limits. Most of us know that intuitively, but few of us have internalized that knowledge. For those of you lacking a tactile experience of exponential growth, try this game (which is an adult version of a game I had my kids play with sea shells on a camping trip many moons ago):

Understanding Exponential Growth by an adult game

Equip yourself with lots of beer, wine, whisky or whatever drink you fancy. Draw a 3 x 3 grid. Split the hour into 10 6 min intervals. Place a marker on the first square of the grid, and have one shot of your favorite drink. Move your marker to the next square. Wait until the next six minute period starts, then double the number of shots from the previous grid, and drink them immediately. Repeat this process of doubling until your marker rests on the last square of the grid.

How do you feel after that exercise…? Did you manage to finish the game (and survive) ? If you managed to survive, you now have personal first hand experience of exponential growth.

GDP & Energy

Let’s look at the correlation between global GDP (a common measure of prosperity) and global use of energy:

Almost perfect correlation. So GDP, one of the most fundamental metrics that our civilization optimizes for, and most products and services we take for granted , is fully dependent on, is totally dependent on the availability of cheap energy. That is, without access to cheap and abdundant energy, GDP will decline, prices (including on capital) will take a hike upwards, interest rates will soar, pensions will suffer, and as a result of all of this your material standard of living will hit downwards.

Below a chart on the relationships between population, GDP, oil and energy consumption:

Have a look at the correlation coefficients below : almost perfect correlation between all of them.

“Renewable” Energy will solve the problem ?

Here’s a graph showing energy production by kind, Sweden 2021 :

Proponents of “Green” or “Renewable” energy might argue that as soon as we have new technologies for solar, wind and other, future forms of “renewable” energy, all our problems will go away.

I’m not so sure about that. Not sure at all, in fact. First of all, even if we would discover a truly green and truly renewable source of abundant energy, our GDP is still dependent on extraction of finite materials. Remember the 5 x 5 x 5 hole dug for each Tesla battery…? Perhaps we can import stuff from other planets…? Maybe. But then, what should we do with the waste after having processed those imported materials ? Ship them back to some other planet…? Secondly, every production process, regardless of how “green”, will result in externalities, of some kind or other, increasing entropy. Thirdly, our current power grids and industrial equipment is fully dependent on a *stable* supply of power – the network frequency can not vary more than a Hz or two before the entire grid shuts down, so energy supplies such as wind and solar can only be used as complements, not the base, of our current energy distribution systems. Have a look at the graph above to see the variability of wind power (solar is the tiny yellow spot in origo).

Here’s a good summary of Limits to Growth research in a short youtube video:


I don’t know what will happen in the future. But I do know that it’s impossible for our civilization to continue on our current path, changes are inevitable due to iron law physical limitations of our finite world. Let’s just hope that the phase shift to a new paradigm will be as painless as possible.

About swdevperestroika

High tech industry veteran, avid hacker reluctantly transformed to mgmt consultant.
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2 Responses to “Peak Oil” or worse : “Peak Everything” is finally here…?

  1. ZF says:

    (Corrected typos) “The major energy producers of the world are fully able and capable of using their energy supply as a weapon for geopolitical power, as Russia is doing as we speak. Future wars might not be that unlikely, after all.”

    1. Is it not the case that it is the US/NATO/EU that voluntarily cut themselves off from Russian resource flows? I mean, yeah, in the 1990s they came “this close” to controlling/owning all of Russia’s natural resources for themselves but their plan blew up and they haven’t restored their own psychic equilibrium since then but that’s another story.

    2. Future wars might not be unlikely? Omission makes it sound like the US/NATO/EU has been sitting around peaceful campfires singing kumbaya all this time and, well, I throw up in my mouth a little bit hearing that characterization. Particularly given the fact of western megaviolence and its escalation in my lifetime, annihilating one country after another for decades, all for resource control, murdering tens of millions.

    3. Well, resource control is one reason for (2) but the other is totally deranged pathological hatred of Russia, which does in fact have something to do with current (right now) events in Ukraine. It is the reason that the US/NATO/EU rejected Ukraine’s dual membership in both the Eurasian trading block and the EU, which was declared acceptable repeatedly by Ukrainian voters, Ukraine’s government, and was endorsed and promoted by the Russian government. This was rejected absolutely by the collective West (the US/NATO/EU) which overthrew Urkaine’s government and installed a client hostile to Russia transformed over the last 8 years into a heavily militarized platform controlled from Washington. Look at the Black Sea and the history of Russia, and ask yourself how far removed such actions are from the events described in Stanley Kubrick’s Dr. Strangelove in 1964. Who among those characters do our governing authorities resemble today? https://www.google.com/search?q=main+characters+in+dr+strangelove&rlz=1C9BKJA_enSE843SE843&oq=characters+in+dr+strangelove&aqs=chrome.1.69i57j0i22i30l2j0i390l2.13456j0j7&hl=en-US&sourceid=chrome-mobile&ie=UTF-8

    • ZF says:

      In the context of that last question, here’s the kind of American military thinking and policy foundation that we grew up to expect in the United States, from the 1950s on.

      But this kind of rationality was overturned in the 90s by the neocons, PNAC and whatnot and the Clinton/Bush/Obama/Biden class of fronts for this. The extent of their extremist policy, and rhetorical overhaul and shitcanning of reasonable awareness, of limits to imperial power, most of us are just only beginning to become aware the extent of the damage, the abyss we’ve walked into intentionally. Well, some are beginning to become aware of it. Most have no idea whatsoever.

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