Posts by Gail Tverberg Subscribe

The Physics of Energy and the Economy

I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who...

Posted February 9, 2016    

Why Oil Under $30 per Barrel is a Major Problem

A person often reads that low oil prices–for example, $30 per barrel oil prices–will stimulate the economy, and the economy will soon bounce back. What is wrong with this story? A lot of things, as I see it:Oil producers can’t really produce oil for...

Posted February 4, 2016    

We Are at Peak Oil Now; We Need Very Low-Cost Energy to Fix It

This past week, I gave a presentation to a group interested in a particular type of renewable energy–solar energy that is deployed in space, so it would provide electricity 24 hours per day. Their question was: how does the production cost of...

Posted December 23, 2015    

Why 'Supply and Demand' Doesn't Work for Oil

The traditional understanding of supply and demand works in some limited cases–will a manufacturer make red dresses or blue dresses? The manufacturer’s choice doesn’t make much difference to the economic system as a whole, except perhaps in the...

Posted November 27, 2015    

Low Oil Prices are Related to a Debt Bubble

Why is the price of oil so low now? In fact, why are all commodity prices so low? I see the problem as being an affordability issue that has been hidden by a growing debt bubble. As this debt bubble has expanded, it has kept the sales prices of...

Posted November 12, 2015    

Our Electricity Problem: Getting the Diagnosis Correct

What is really wrong with our energy system, particularly as it relates to electricity and natural gas? Are there any mitigations available? I have been asked to give a talk at an Electricity/Natural Gas conference that includes both producers and...

Posted October 15, 2015    

Low Oil Prices: Why Worry?

Most people believe that low oil prices are good for the United States, since the discretionary income of consumers will rise. There is the added benefit that Peak Oil must be far off in the distance, since “Peak Oilers” talked about high oil prices...

Posted October 1, 2015    

How Our Energy Problem Leads to a Debt Collapse Problem

Usually, we don’t stop to think about how the whole economy works together. A major reason is that we have been lacking data to see long-term relationships. In this post, I show some longer-term time series relating to energy growth, GDP growth, and...

Posted September 16, 2015    

Deflationary Collapse Ahead?

Both the stock market and oil prices have been plunging. Is this “just another cycle,” or is it something much worse? I think it is something much worse.Back in January, I wrote a post called Oil and the Economy: Where are We Headed in ...

Posted August 28, 2015    

How Economic Growth Fails

We all know generally how today’s economy works:Figure 1Our economy is a networked system. I have illustrated it as being similar to a child’s building toy. Ever-larger structures can be built by adding more businesses and consumers, and by using...

Posted August 11, 2015    

Nine Reasons Why Low Oil Prices May "Morph" Into Something Much Worse

Why are commodity prices, including oil prices, lagging? Ultimately, the question comes back to, “Why isn’t the world economy making very many of the end products that use these commodities?” If workers were getting rich enough to buy new homes...

Posted July 24, 2015    

What Greece, Cyprus, and Puerto Rico Have in Common

We all know one thing that Greece, Cyprus, and Puerto Rico have in common–severe financial problems. There is something else that they have in common–a high proportion of their energy use is from oil. Figure 1 shows the ratio of oil use to energy...

Posted July 9, 2015