World Energy and Population
Trends to 2100

Throughout history, the expansion of human population has been supported by a steady growth in our use of high-quality exosomatic energy. The operation of our present industrial civilization is wholly dependent on access to a very large amount of energy of various types. If the availability of this energy were to decline significantly it could have serious repercussions for civilization and the human population it supports.

During the historically recent period of global industrialization, the level of human population has been closely related to the amount of energy we have used.


The current global energy mix consists of oil (36%), natural gas (24%), coal (28%), nuclear (6%), hydro (6%) and renewable energy such as wind and solar (about 1%).

Oil
The analysis of our oil supply starts from the recognition that it is finite, non-renewable, and subject to effects which will result in a declining production rate in the near future. This situation is popularly known as Peak Oil. The key concept of Peak Oil is that after we have extracted about half the total amount of oil in place the rate of extraction will reach a peak and then begin an irreversible decline.

In order to create a realistic decline model for the world's oil, I have chosen to follow the approach of Dr. Bakhtiari in his WOCAP model. He assumes a gradually increasing decline rate over time, starting off very gently and ramping up as the years go by.


Before we leave the subject of oil, some comments about oil exports are in order.
In most countries the demand for oil is constantly increasing. This applies especially to oil exporting nations, where rising oil prices have stimulated economic growth. This additional growth has in turn resulted in a higher domestic demand for oil which is satisfied out of their surplus before it is made available for export. While the nation's oil production is increasing this does not pose much of a problem. When the exporting nation's production peaks and begins to decline however, something ominous happens: the amount of oil available for export declines at a faster rate than the production decline. This has become known as the "net oil export problem".

Natural Gas
The supply situation with natural gas is very similar to that of oil. This makes sense because oil and gas come from the same biological source and tend to be found in similar geological formations. Gas and oil wells are drilled using very similar equipment. The differences between them have everything to do with the fact that oil is a viscous liquid while natural gas is, well, a gas.

While oil and gas will both exhibit a production peak, the slope of the post-peak decline for gas will be significantly steeper due to its lower viscosity.


Coal
Coal is the ugly stepsister of fossil fuels. It has a terrible environmental reputation, going back to its first widespread use in Britain in the 1700s.
Weight for weight, coal produces more CO2 than either oil or gas. From an energy production standpoint coal has the advantage of very great abundance. Of course this abundance is a huge negative when considered from the perspective of global warming.

Most coal today is used to generate electricity. As economies grow, so does their demand for electricity, and if electricity is used to replace some of the energy lost due to the decline of oil and natural gas, this will put yet more upward pressure on the demand for coal. At the moment China is installing two to three new coal-fired power plants per week, and has plans to continue at this pace for at least the next decade.

Just as we saw with oil and gas, coal will exhibit an energy peak and decline.


Nuclear
Two realizations form the basis for my model of nuclear power. The first is that since reactors have a finite lifespan averaging around 40 years, a lot of the world's reactors are rapidly approaching the end of their useful life. The second is that the replacement rate inferred from the UIC planning table is only about three to four reactors per year for at least the next ten years, and probably the next twenty.

These two facts mean that within the next twenty years we will have retired over 300 reactors, but will have built only 60. So by 2030 we will have seen a net loss of 240 or more reactors: over half the present stock. Since these reactors are all broadly similar in size (a bit less than 1 GW on average) that means we can calculate the approximate world generating capacity at any moment in time, with reasonable accuracy out to 2030 or so.


Hydro

If coal is the ugly stepsister, hydro is one of the fairy godmothers of the energy story. Environmentally speaking it's relatively clean, if perhaps not quite as clean as once thought.

It seems that Nelly nerves are continuing!

Major Europe markets are currently down between 1-2%, in trading today and US DOW Futures are also DOWn over 100 points.
http://www.investing.com/indices/major-indices
http://www.investing.com/indices/us-30-futures-advanced-chart

Perhaps nerves over Syria & what that could mean to Oil markets or it MAY simply be what is often an unwinding of positions around the August to November time of year OR it could be the start of the final countdown, to REALITY?


We will have a better idea, come December? 

"This" Has Never Happened Outside Of A Recession

As the mainstream-media and its status quo "growth's around the corner" lackeys gloat hopefully over this morning's soon-to-be-revised GDP data beat, we noted a rather disturbing trend in a critical part of the report. Real Final Sales growth is collapsing. In fact, the current slow level of growth in real final sales has never occurred outside of a recession...



Link -
http://www.zerohedge.com/news/2013-08-29/has-never-happened-outside-recession
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I think it was Keating who coined the best description of what is now happening -

This is the Recession, we had to have!

However, when the basic, major Global Economic drivers are viewed in total, the Recession we had to have, is mostly likely erring on the positive side - SUBSTANTIALLY!

That said, I wish the winners of next weeks OZ election, the best of luck, AS WE WILL ALL NEED IT!

Oh & there will be no Surplus, in a government, led by any Politician, FOR A VERY LONG TIME.
CERTAINLY, THERE WILL BE NO SURPLUS, WITHOUT IT CAUSING A MASSIVE RECESSION/DEPRESSION!!! 

    

perceptions_now wrote on Sep 9^th, 2013 at 4:42pm:

Fed Shocker: No Taper

The Federal Reserve today (Sept. 18, 2013) surprised the world -- and me, too -- by not reducing the amount of bond purchases from the current $85 billion per month to something less. The guesses and expectations were for between $10 billion and $15 billion less per month, to bring the number down to "only" $70 to $75 billion per month. The actual reduction was $0.00, leaving the purchases at $85 billion per month.

The financial markets reacted instantly. Of course, the dollar got hit right away, and for a pretty good amount, given that it's the world's major reserve currency, losing more than 0.75% in the blink of an eye

As I have long argued, the Fed is boxed in and almost certainly will continue to print as much and for as long as necessary. Along the way everybody knows that the financial markets are becoming ever more dependent on continued Fed stimulus and that tapering, let alone actual unwinding, becomes an ever harder and more remote possibility. Furthermore, we all have to try and make sense of the growing gap between the Fed's actions and the reported economic statistics. After all, $85 billion a month is an emergency amount and so we have to ask: Where's the emergency? It's not in housing, or auto sales, or the headline GDP number. Nor is it in bank earnings or growth in wealth for the already wealthy.

The simple truth, as I see it, is that the Fed now knows that as soon as it takes the punchbowl away all of the apparent wealth evaporates and the market crumbles. Here we might note that if several years of truly historic money printing has not yet provided enough self-sustaining recovery, why exactly is it that the Fed thinks more of the same will do the trick? Something just does not add up in this story. What is it that they are not telling us?

Well, one thing that really does not fit in this story is oil over $100 per barrel. As far as I am concerned, there will be no such thing as a resumption in the type of growth the Fed wishes to see before they willingly begin tapering (end eventually unwinding) because of the price of oil and debt levels that are still far too high. That means the Fed will keep on printing money until something happens. More bluntly, I think the Fed will keep printing until some form of market accident happens that forces them to behave differently. When that happens, the Fed will be following, not leading. And many will be cruelly punished for believing that the Fed had some magical ability to re-write economic laws.

Conclusion
By failing to taper the Fed has all but admitted that it is quite worried about something they are not publicly disclosing. But it's not that hard to read between the lines. The Fed, along with everybody else, knows that the markets are elevated mainly because of the QE money printing and they are desperately afraid to find out just how much elevation they are supporting. The best guess is a lot.

For now, the whole world seems content to just go along with the story and buy up everything that isn't nailed down, which is just another way of saying, "Don't fight the Fed." To my way of thinking, this is just inflation, pure and simple, and the Fed has engineered another huge bubble, this one bigger than all the others put together, and it is now our job to figure out when and why this one, too, shall burst.

Again, I consider all of this to be perfectly reckless behavior. We have to be open to the possibility that, rather than being paragons of competence, the Fed is actually staffed with ordinary humans who have no better idea of where this is all headed than anyone else.

With history as our guide, we're pretty confident saying that this ends badly, and given that this is the largest bubble by far, we might even guess that it ends really badly. But we can never know the when of such matters, and so we continue to prioritize building resilience at the personal, financial and community levels.

Link -
http://seekingalpha.com/article/1701992-fed-shocker-no-taper?source=email_macro_...
========================================
I Concur!

scarey stuff perceptions. good read

Ex Dame Pansi wrote on Sep 28^th, 2013 at 7:20am:


In fact, it is obvious that the US has already exceeded its designated/legal Debt limit BUT both major Political party's have simply agreed to a cover up!

They (the US Pollies) also supposedly have until October 17th to pass revised Debt limit legislation, at least to do it legally?

The aging of the baby boom appears to have great influence on the economy and markets. It appears to explain why the economy is much weaker than indicators like initial unemployment claims suggest. It helps explain the depth of the great recession and why the economy remains weak. It may explain why the stock market is about to crash.

We're going to focus on the impact of the first leg of the baby boom that occurred in 1947 as it hits three significant points in the life cycle. First, we will look at when people are most likely to leave a job without being fired. Then, at when people are most likely to start contributing less to the production of goods and services. And finally, at when they are most likely to sell stocks.

Initial Claims falsely indicate Strength
Historically, when initial unemployment claims are in the low 300 thousands the economy grows faster than it has been. Below is a chart of annual GDP growth (in black) and the 4-week moving average of initial claims (in red). Claims suggest the economy should have grown at about 3.3% in the last year rather than 2%. The discrepancy was even larger going into the great recession. On the other hand, in the late 1990s growth was stronger than initial claims suggested.


 
In wondering why the economy was so much weaker than indicated I wondered if the aging baby boom generation played a role. After all, if people are leaving jobs voluntarily a business can reduce its work force with attrition rather than firings. At about age 59 and a half people appear most likely to leave a job without being fired. They may leave to start a business, find a less demanding job, to retire early or for health reasons. The chart below shows the residual GDP growth, or the rate of growth less the growth estimated by initial claims in the chart above. It also shows the percent of the population aged 50 in red with a 9.5-year lead time. Age 50 with a 9.5-year lead time shows the influence of people at age 59 and a half. This was the lead time with the highest correlation. Note: the percent of population scale is inverted. So a rise in the percent of the population age 50 is shown as a dropping red line.



In 2006 growth started becoming weaker than initial claims indicated it should be; this corresponds on the chart with the percent of the population age 50 rising (falling on chart) to 1.5%. By contrast, when the percent of the population age 50 was less than 1% GDP was stronger than initial claims suggested. It's very reasonable that when the birth dearth of the Great Depression was 59.5 there were fewer people than normal leaving by attrition. Looking forward, the correlation suggests initial claims will over estimate growth at least through 2020.

Declining Economic Contributions
Even though people are more likely to leave a job at age 59 they still usually contribute to growth a bit longer. Significant declines do appear to occur around age 62.5. Below is the five-year rate of GDP growth (in black) with the population age 50 (in red) leading almost 12.5 years.



So the Great Recession corresponds with the first leg of the baby boom born in 1947 turning 62 and a half. After 1947, births declined for a few years resulting in fewer people turning 62.5 the last three years. In the chart above this corresponds with growth strengthening a bit the last 3 years or so. Going forward the number of people reaching this age begins to rise (fall on chart). This larger share of the population reaching the age where they are less able and or willing to contribute to growth will be an economic headwind for a number of years.