Don’t be Fossil Fooled – It’s Time to Say Goodbye

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It’s time to make the call – fossil fuels are finished. The rest is detail.

The detail is interesting and important, as I expand on below. But unless we recognise the central proposition: that the fossil fuel age is coming to an end, and within 15 to 30 years – not 50 to 100 – we risk making serious and damaging mistakes in climate and economic policy, in investment strategy and in geopolitics and defence.

I’ve written previously about 2015 being the year the “Dam of Denial” breaks, referring to the end of denial that climate change requires urgent, transformational economic change. While related, this is different. It is now becoming clear we’ve reached a tipping point where fossil fuels will enter terminal decline, independently of climate policy action.

Given climate policy action is also now accelerating, fossil fuels are double dead. To paraphrase Douglas Adams, “So long and thanks for all the energy”.

I understand this is a very big call, especially in regards to timing. There are many drivers that lead me to this conclusion but it’s their integrated impact that makes me so confident.

Thinking of energy like you think about an iPhone

The first and most important one is the argument I first made early in 2014 in a paper with Giles Parkinson from RenewEconomy.com.au. For over a hundred years, energy markets have been defined by physical resources, supplied in large volumes by large, slow moving companies developing long life assets in the context of slow moving shifts in markets.

The new emerging energy system of renewables and storage is a “technology” business, more akin to information and communications technology, where prices keep falling, quality keeps rising, change is rapid and market disruption is normal and constant. There is a familiar process that unfolds in markets with technology driven disruptions. I expand on that here in a 2012 piece I wrote in a contribution to Jorgen Randers book “2052 – A Global Forecast” (arguing the inevitability of the point we have now arrived at).

This shift to a “technology” has many implications for energy but the most profound one is very simple. As a technology, more demand for renewables means lower prices and higher quality constantly evolving for a long time to come. The resources they compete with – coal, oil and gas – follow a different pattern. If demand kept increasing, prices would go up because the newer reserves cost more to develop, such as deep sea oil. They may get cheaper through market shifts, as they have recently, but they can’t keep getting cheaper and they can never get any better.

In that context, consider this. Renewables are today on the verge of being price competitive with fossil fuels – and already are in many situations. So in 10 years, maybe just 5, it is a no-brainer that renewables will be significantly cheaper than fossil fuels in most places and will then just keep getting cheaper. And better.

Then we add in electric cars, which are now on the same path – converting a staid, slow moving industry (traditional auto companies like GM) into a disruptive technology driven one (innovators like Tesla). Electric cars will accelerate the end of fossil fuels by joining with renewables to create a system shift, both directly by using clean power to charge them and indirectly by driving battery costs down to create storage for distributed renewables.

This all then unleashes competition across sectors bringing new players to old industries. For example utilities facing the much discussed death spiral triggered by solar, will find the motor vehicle fuels market very appealing. This would then unleash a huge political and commercial driver for growth in electric cars with the utility sector providing infrastructure to use their product, locking in customers with long term supply deals backed by renewable power and lobbying for electric cars (to also protect the grid).

Within a decade, electric cars will be more reliable, cheaper to own and more fun to drive than oil driven cars. Then it will just be a matter of turning over the fleet. Oil companies will then have their Kodak moment. Coal will already be largely gone, replaced by renewables.

The incumbents won’t respond in time. They are steeped in their analysis that they are the underpinning foundation of the economy – which of course they have been. This is so deeply ingrained in their worldview they can’t see their error. Energy is the essential foundation of the economy but we now have a better, cheaper way of producing energy.

Fast beats slow

One of key competitive advantages the fossil fuel industry has had is the huge capital, complexity risk and high level engineering skills required to develop them. This has two impacts. Firstly it created huge barriers to entry in the market – a disruptive entrepreneur can’t build a coal power station, drill in the deep ocean, buy an oil tanker or develop a coalmine. They can play on the edges, like shale gas, oil trading or mineral exploration, but they can’t play the main game. Secondly the industry has had huge incumbency power – it’s very expensive and politically hard to consciously and deliberately close down such a powerful industry and replace it. Thus action on climate change has stalled for decades.

Both of these benefits are gone when you combine “energy as a technology” with most growth in energy demand being in developing economies. With renewables already competitive today without subsidy in some markets and the above trends playing out, it is inevitable that before long – maybe a decade – virtually all new electricity generation will be from renewables. Add in the need to be clean – not just for climate change reasons but for local air quality – and the choice developing countries will face will be between large, old, dirty, hard to finance infrastructure that requires heavy government support or small scale, easy to finance, more convenient, popular and clean energy and transport that will get even cheaper over time. Tough choice?

So the very thing that the fossil fuel industry had relied on for its growth – the rapidly expanding need for energy in the developing world – is the very thing that will drive the competition to wipe them out.

Implications

It’s hard to know where to begin with what this all means, because this really does change everything. Of course no one can accurately forecast the dates involved. But the assumptions pretty much everyone’s working with – that without policy intervention the energy system will be dominated by fossil fuels in 2050 and beyond – is frankly delusional. How could an incumbent, unpopular and dirty technology with increasing prices beat a disruptor which is cleaner, better, lower risk and falls in price every year?

Once you accept that, whether we stop burning fossil fuels in 15 years or 30 years is important, but it’s not the main question because either way it’s a very different outcome than most are planning for.

As I argued early 2014 in “Carbon Crash Solar Dawn”, the industry’s condition is terminal and once everyone wakes up to that reality, it will die faster because the market will discount it, taking away capital and shifting it to the future winners. This process will drive scale deployment and innovation of renewables while denying capital to fossil fuels, constraining their options.

Then the only logical strategy for fossil fuel companies will be to get their depreciating assets out of the ground as fast as possible and invest zero in exploration and development, instead paying out spare cash as dividends to shore up their stock price. With everyone doing this, prices will fall chasing the declining market, undermining the value of the fossil fuel industry and reducing its political influence further.

All businesses, like humans, fight death. And fight they will, with all the considerable power they have. So it will be messy and chaotic, and not consistent around the world. But in the end, the fossil fuel giants have no strategy that involves fossil fuels which makes any business or economic sense. Other companies like utilities and auto companies meanwhile have great options – like taking away a large share of the oil industry’s market with renewable powered electric cars. They know that today we spend around twice as much on motor transport fuel as we do on electricity.

But big oil versus big utilities aligned with big auto is not the only disruptive impact for investors. There’s a whole range of industries that will benefit and join the party dancing on fossil fuels’ grave – battery manufacturers, copper and lithium miners, electronics producers, software developers, electric engine makers, smart grid builders and of course solar and wind power manufacturers, installers and financiers. Shell and Exxon don’t see Google and Apple as competitors, which is just why incumbents so often lose. In combination these forces will unleash the predictable pattern of technology driven market disruption.

If you think this is all far into the future, then think again. In the USA, coal companies have lost around 75% of their value in the past few years while the Dow Jones went up nearly 70%! And electric car maker Tesla, producing less than 40,000 cars per year, is valued at over half of GM which produces 9 million cars per year! The market can smell death and knows that fast beats slow.

For climate advocates and policy makers, nothing changes in their approach but everything changes in the result – and their level of confidence and influence.

With fossil fuels on the run, that industry’s support will evaporate. Governments are much more inclined to regulate when what they seek is already happening but needs speeding up. So as fossil fuels are falling off the cliff, governments will give them a kick so they can claim credit.

Climate advocates, whose main challenge is speed of action, don’t need to change their approach. Their strategy is working – make fossil fuels harder, make solar easier. The only change now is that victory is at hand. Everyone loves a winner.

In conclusion, I will summarise my argument.

  • The fossil fuel energy industry is now entering terminal decline and will be all but gone within 15-30 years. The key driver is not what most see as their greatest threat – future climate change policy. It’s that competing energy products of renewables and batteries, in a system with electric vehicles, will behave as a disruptive technology always does, delivering ever lower prices and ever higher quality in a decades’ long period of innovation and deployment, which fossil fuels can’t match.
  • Because of the nature of this transformation, there will be a wide variety of new business players entering the market from the side, profoundly changing the market. The obvious example is utilities promoting electric cars as an enormous new market opportunity, which will assist them in avoiding the “death spiral” threat posed by the end of centralised generation. Joining already are companies like Apple and Google who are both developing battery and car opportunities, with a close eye on the technology integration opportunity. Together this will form a powerful economic force both driving disruption and advocating climate action, undermining the historically dominant political and economic resistance of the fossil fuel companies.
  • In combination these forces will unleash the predictable pattern of technology driven market disruption. The incumbents will stay in denial and fail to respond to what’s coming, despite it being obvious. They will hold on and fight against change as long as possible, but in the end will be wiped out by nimbler new players without the cultural or asset baggage of the old. There will be an unknown tipping point – I think before 2020 – at which time the momentum will rapidly accelerate.
  • The key difference in this transition versus previous technology driven change is that it has the added dimension of climate change, making the resulting transformation a very high priority for policy makers and an unbeatable source of public support for the disruptors.

Fossil fuels are dead. The rest is details.

72 thoughts on “Don’t be Fossil Fooled – It’s Time to Say Goodbye

  1. Tony

    As always there will be the issue of infrastructure. how will the average user fill his electric vehicle, how long will it take, what will he do while he waits…. The ever rushing workforce that must be busy will need to rethink transport. There will need to be better options, fast rail, fast electric trams/buses/people movers in succession from city to airport etc.. There will need to be a free moving society where people feel less constrained to the suburbs to drive to the city for work/for entertainment – rather to live in it…more cities like London/New York where many people never own a car….maybe cheaper rental cars for longer jaunts. Society needs to change, planners need to be modern free thinking and not afraid to challenge the status quo…..younger more vibrant closer together…

    • George Burrett

      “t’s hard to know where to begin with what this all means, because this really does change everything,” as Naomi Klein makes clear in her book by that very title. She should get mention.

      • While I agree that we need to switch to renewables in order to try to avert a mass extinction event, I am saddened by the lack of proper attention to the problem of methane in the environment by this author. We can virtually abolish carbon emissions and still “crash” because of methane. I would encourage everyone to watch the film “Cowspiracy” . The worst animal contributor to the methane problem is cattle, both Dairy and Beef. An inconvenient truth that “The Great Disruption” fails to adequately address. The problem is exacerbated by the destruction of forests in order to produce, either grazing land or land to produce the corn and soybean that is used to feed cattle (forests being one of the great methane and carbon capturers). It has been estimated that we will have lost the Brazilian rainforest do to the cattle industry by 2013. I note that Australia is the third largest producer of beef and I hope that that fact has not contributed to the lack of attention to this industry and the methane problem in what is otherwise a very good analysis of environmental issues.

      • Paul Gilding

        Irene
        I actually agree. This was an oversight in the book (I covered it but not adequately). I also urge everyone to watch Cowspiracy!

      • Careful with Cowspiracy. It does present some valid information, but it cherry-picks some of the worst possible data points to single out cattle husbandry in particular as climate criminal number one. It relies on some numbers from studies done and collated by the UN’s FAO, but then repudiates the same source in the very next breath. The head-count of domesticated bovines today is greater than the pre-industrial head count of wild bovines, but actually not an awful lot greater. Methane emissions from natural wetlands and tropical forests dwarf those from domesticated cattle. At least half of the methane emissions in North America today are fugitive emissions from the fossil fuel industry (not least shale gas). This was probably higher in the early 1990s, reduced dramatically around the turn of the millennium as gas prices soared and regulation forced flaring in place of venting unusable wellhead gas, and has steadily risen again since about 2005 as a consequence of the coal-bed and shale methane “revolution”. These changes are very visible against a much smaller variation in the background levels of methane from natural and agricultural sources.

        None of which is to say that cattle aren’t major greenhouse gas emitters. Of course they are. Just be careful with your data, don’t rely on what is essentially a propaganda piece.

  2. Hi Paul,
    Another great article, well worth the wait.
    I hope that Tony Abbott continues down the track of supporting dirty big energy and in doing so alienates more and more of his supporter base. The pendulum was swung a long way in Federal government policy since the carbon tax, and I can see it swinging quickly and wildly back the other way, given the extreme position of our Prime Minister and Treasurer.
    More and more businesses, large and small, are aiming for carbon neutrality and it is only a matter of time before Liberal governments, State and Federal, either jump on the bandwagon or lose out electorally.
    We must also not forget that efficiencies can reduce consumption by up to 30 %, so we can all do our but without necessarily buying or consuming.
    Keep it up
    Andrew Watson

  3. Bsrkr11

    Only Details eh? hahaha….

    It’s funny that a redesign of our global society can be summed up as. …details.

    Electricity will be technically the easiest part of the change , but only approx 12% of all energy consumed is in this form.

    The challenge will be the new story because unlike you and me and the others who deal with this everyday I still go to parties where people don’t get it.

    The worst part is that those who do are perhaps a bit naive in their over zealous nature of how simple the change will be. …

    There is no substitute for oil yet. .. it still is fundamentally the foundation stone of modernity itself and it is a real question whether renewable energy generates enough profit to not only sustain itself but grow it’s uptake energetically.

    So yes it’s the details. But as we know the devil always hides in the details. …

    • Fossil fuels have now come to be the stone around our necks and it’s time to break loose. Mark Jacobson at Stanfort and Mark de Lucci at U.C. Berkeley are saying the same thing. This transformation to clean safe renewables producing an all electric economy powered by wind water and solar within 25-30 years.

    • Well, I think there is a substitute for burning oil in our transport, which is where most of the emissions damage is done. We have only a few years to go before EV’s become generally affordable.

      Long before that, with the writing on the wall, who will be buying ICE’s when their second hand value drops through the floor and filling stations get thinned out as the marginal ones go broke?

      Once we no longer have to burn oil in transport, it will be much easier for governments to control emissions from those industries converting oil to food and medicines, etc.

    • “Electricity will be technically the easiest part of the change , but only approx 12% of all energy consumed is in this form.”

      Actually over 18% of final energy consumption is in the form of electricity, and over 45% of primary energy production is the fuels (and other primary energies) used in the generation of electricity. The lion’s share of the difference is in the waste heat from thermal power generation (whether fossil fuelled, nuclear or biomass). Each move from thermal generation to generation from non-thermal primary energy sources such as wind, water or sunlight correspondingly reduces the amount of primary energy required to achieve the same end-use utility.

      Moreover, the vast majority of the remaining non-electric energy consumption is in applications which are highly susceptible to electrification, namely building heat and ground transportation.

  4. Neil Harris

    In Australia a critical factor in the timing of these changes will be whether or not the current obstructionist government is returned at the next elections in 2016. This will not change things worldwide, but will determine whether Australia catches the wave of change or is left wallowing in the backwash a long way from the beach.

  5. Reblogged this on Not Something Else and commented:
    Back in February of this year I linked to an article by Paul Gilding titled 2015: The Year The Dam Of Denial Breaks, which talked about how by the end of this year the world would no longer be able to see the fossil fuel energy industry as the basis underpinning our energy needs. Paul has now gone further than that, to declare “Fossil fuels are dead. The rest is details”. It is also clear to me that this is an inarguable position and one that we must face up to.

    Where I diverge, or at least appear to diverge from Paul’s thinking, while giving due respect to his undoubted expertise on matters of business, is that the energy sources which are slated, not only in this article but generally around the ‘possible futures’ scene to replace fossil based energy sources are not actually, or even remotely, up to the job and cannot in fact exist more than momentarily unless backed by at least the liquid energy forms of the oil and gas industries. I have mentioned that on a number of occasions and I see no reason to alter that view no matter how euphorically ‘renewables’ are lauded.

    My view of a future which is only viable in a world that has largely powered down to a level of simple living, with none (and I mean none) of our current modern technologies remaining available to us (can you even imagine that world?) for more than a single generation, still holds water and to me is the only or the best possibility for humanity to retain a foothold as a major species on this planet.

    • The “liquid energy forms of the oil and gas industries” are entirely replaceable too. Not at zero cost, of course, but affordably. As an existence proof, consider synthetic fuels.

      One of the more advanced proposals to address the issue of intermittency of wind and solar electricity generation across the seasons is power-to-gas, with plants at the megawatt scale already deployed in Germany and several other countries generating nature-identical methane using excess renewable energy for storage in existing natural gas infrastructure.

      Techniques for the manufacture of gasoline (via the Mobil process) and diesel, lubricants, waxes and the like (via Fischer-Tropsch synthesis), chemically similar to but typically much cleaner than the petroleum products we use in vast quantities today, have been known for a century and are in widespread application today with water and other fossil fuels (gas in Malaysia and Qatar, coal in South Africa and China) as the chemical and energy feedstock. Electrolytic hydrogen and CO₂ are equally viable as chemical feedstocks for the same processes with clean electric energy as the energy feedstock. As an existence proof of liquid fuel from clean electric energy in operation, see Carbon Recycling International in Iceland which produces methanol from geothermal electricity and igneous carbon dioxide.

      Chemical techniques basically similar to those involved in fuel synthesis are also able to produce olefins and the like for manufacture of fertilisers, plastics and other synthetic chemical products typically manufactured with petroleum feedstocks today (indeed synthetic fertilisers were originally mass-produced by electrolysis, not with fossil feedstock).

      Of course, for most applications, synthetic fuel would be less affordable than electric energy transmitted or stored in more conventional ways. Battery-electric cars will soon be convincingly cheaper to own and operate than internal-combustion-engine cars. The very largest land vehicles ever made, massive open-cut mining excavators, are powered not with liquid fuels but via high-voltage cable. Other heavy mining and rail haulage equipment typically already uses diesel-electric traction and is readily electrifiable via catenary and batteries for hybridisation (regenerative braking) and for brief runs away from mains supply. Power-to-gas may become widespread for seasonal storage of excess spring and summertime solar and wind power for use in dark still winters, but daily and weekly cycles are more likely to use batteries or various electromechanical techniques such as (traditional) pumped hydro, or adiabatic compressed air storage, or cryogenic power storage of the sort being pioneered by Isentropic and Highview Power in the UK.

      A few traditional applications for liquid fuels are probably not readily susceptible to electrification: aviation and maritime shipping come to mind (also vintage machinery enthusiasts). But these use just a few percent each of today’s petroleum production. Supposing the world actually bans petroleum extraction at some time in the future, synthetic fuels from clean electricity and/or biofuels are adequate to the task. But I doubt that a total fossil fuel ban will ever be imposed: it’s more likely that, with clean electricity out-competing petroleum for most of its existing applications, a rump of the existing oil business will persist for a long time producing a fraction of today’s output for specialty applications — probably in fierce price competition with clean synthetic fuels.

      • Jonathan, I think that you need to remove your rose coloured glasses for a minute and look at the real world, not the hypothetical world of modern technology.

        There are literally no substitutes for natural oil and gas products which could be produced synthetically at an appropriate cost, in the amounts that would make a difference and with the technologies that will still be available to humanity in the very near future. None …and never will be.

        That is the reality that we need to accept and get used to.

      • Leif Knutsen

        Given that the Planet has already warmed close to one degree C with no end in sight, the sea level rise will soon be 6-9 meters higher. Quite possibly within the life span of your great grand children. I trust your home equity is not on the coast.
        We are the first generation to feel the effects of global warming and the last generation to be able to do something about it. A steep learning curve for sure but you do not appear to be trying very hard. Go Green. Resistance is fatal to planetary life support systems.

      • Thank you Notsomethingelse for your optometrical advice.

        You begin with an absolute “literally no” and conclude with a very absolute “None … and never will be”, but in between you give your claims some very non-absolute wriggle-room: “appropriate cost”, “amounts that would make a difference”, “technologies that will still be available”.

        Note above that I gave an “existence proof” that substitutes for petroleum and natural gas are already available, not an assertion that we would overnight switch from extracting vast quantities of petroleum to manufacturing the identical quantities of synthetic liquid fuels. I did not assert that business as usual can proceed unhindered with nothing but an instantaneous switch from fossil energy to clean energy. I made no assertion whatsoever that synthetic fuels would be inexpensive, or there would be no economic contraction, or that we would be able continue to use energy in the same profligate quantities we do today.

        Your absolutes, on the other hand, are extraordinary statements which require extraordinary justification.

        That scary but vague “technologies that will still be available” requires some extraordinary justification too. We’re looking at a rapid transition in the energy industry which has already begun and is likely to accelerate dramatically over the next few decades, driven largely by our increasingly urgent desire to address the problems of fossil fuel pollution including (most urgently) climate change. Neither climate change nor any other impending catastrophe is going to eliminate overnight all technical knowledge, technological ability, industrial capacity or industrial infrastructure.

        Your assertions are very similar to those made frequently by Mike Stasse, with whom I have enjoyed some exchanges on this topic before. Are you acquainted? I think you’d get on :-) He blogs at https://damnthematrix.wordpress.com/

      • Hello Leif Erik Knutsen,

        I assume you are addressing me with this comment about home equity. If not, and you’re talking to someone about whom you actually know something, forgive me. Feel free to clarify.

        I do not appreciate your judgmental tone. Read again what I have argued above: substitutes for fossil fuels do exist and are likely to compete with fossil fuels, even as production rates of fossil fuels are forced through regulation and divestment (or perhaps through other events, though I didn’t explore any) to decline. That’s all I was saying.

        Sea levels have already risen and are indeed likely to continue to do so for some time. Humanity already uses renewable energy and is likely to continue to do so for a very long time. With Paul Gilding, I look forward very much to seeing renewable energy replace the vast majority of our use of polluting fossil fuels in the near future. I attempted to demonstrate in my post above that renewable energy could, technically speaking, replace *all* of our use of fossil fuels in the unlikely event that they became completely unavailable, which Notsomethingelse’s post to which I was replying implied was inevitable and would be devastating. I disagree and I explained why.

        I’m still not sure how any of this makes either my great-grandchildren or my property an interest of yours.

  6. Thanks for this. I’m hoping to button-hole a politician or two at a ‘Solar Citizens celebration of the revolution’ (2.4 million rooftop solar installations in Australia in seven years!) on the weekend, and your article will provide some useful talking points.

    Who’d have thought?

  7. John Polain

    Thanks Paul,
    Enjoyed the article.
    It seems to be predicated on business as usual for the world economy (apart from the small matter of energy source).

    It’s not just our choice of energy source that is inappropriate, it is our basic paradigm.
    Turning to a cleaner form of energy won’t change our growth at all costs paradigm. It might have been what gave us our start as a species, but it might also drive us to extinction..

    As well as growth, you could also add a blind belief in entitlement and all the destructive consumerism that accompanies it.

    The economy can’t continue to grow even with renewables. What are the consequences of the inevitable collapse? Put simply, if the economy collapses, the high tech future collapses with it. Almost all renewable energy equipment and infrastructure is made with fossil fuel.

    I agree that the fossil fuel industry is dying. Collapsing demand for oil will lead to a supply crash.

    Like all minerals, we have mined the easy to get to first. This is why there is diminishing returns for most miners. An implication of economic collapse is that the necessary funding for high tech will disappear, and supply collapse will ensue. This will apply to raw materials for renewables as well.

    It could be argued that the collapsing price for commodities is a result of a combination of reaching natural limits, unsustainable world debt, and possibly declining purchasing power of workers.

    Economics has no understanding of a world economy that reaches limits and doesn’t grow. There appears to be no plan B. It seems that in a networked world, we grow or collapse. Even the most optimistic Keynesian would concede there is no more money to prevent deflation.

    As someone involved in agriculture, I well understand the concept of overshoot. It is often not apparent to the untrained eye, until it is too late. Too many mouths to feed from a deceasing land base is arguably our greatest challenge. Consider also that much of what feeds us is grown with fossil fuel fertilizer. What happens to the masses when the food and water stops?

    We had about two billion people before we started using fossil fuel in Ag.

    I don’t want to in any way criticize your excellent work.
    I just fear your dream may never happen as seven billion people will not survive the coming crash. The road to recovery will not be as before because the world was far less depleted after past crashes. Lower tech enabled mining and production. Not this time.

    I only intended to write five lines. Rambling now so will stop.

    • Paul Gilding

      John. I largely agree regarding the limits to growth. As I argued in “The Great Disruption”, we will first “fix” climate change i.e. have a dramatic response that appears to get us “back on track” to growth but then we will wake up to the reality of the limits to growth being real and immovable. But I still believe we have to get through this first phase before we’ll wake up, unfortunately.

      • Because we’re overwhelmingly fossil-powered at the moment, and because our analyses all point at the very scary looming limit of the capacity of the atmosphere and oceans to absorb the pollution from the combustion of fossil fuels, we really have very little concept of where the “real and immovable” limits to growth might be. Categorically they are a lot further away with clean energy than with fossil energy. Once fossil energy is out of the way, the other limits will come into clearer focus. I’m guessing that the next big transition will be in the food system: carnivorism will go out of fashion and things we might see as niche or faddish like permaculture and biochar will become commonplace. Genetic modification technology could actually begin to be used to do amazing things with crop yields instead of just tinkering at the edges, and synthetic food may become a thing.

      • John Polain

        Thanks Paul for responding. I sincerely hope you are correct. I just fear we are sailing “happily” into a perfect storm.
        Cheers,
        John

    • John,
      Your comment makes very good sense to me. “What happens to the masses when the food and water stops?” seems to me the critical question; all scenarios I see are for no changes in our basic paradigms, and muddling through with minimal effects, neglecting your question. I wonder what population the world can support, and still maintain a high level of culture: How much infrastructure/how many skilled people are necessary so that hearing and learning Beethoven are not vanished memories?

  8. Graham Palmer

    I think I recall you describe the short term future as “going to be messy”. Is that still your view? On a personal note I would be interested in knowing how you see aviation and global shipping fairing in this “Great Disruption”? There is a tremendous bullishness amongst aircraft manufacturers and airlines with full order books extending out for a decade or two. I realise the ‘long weekend’ in Bali will be finished but what about business and what we presently consider “essential” travel?

  9. Chris Chatteris

    Once we’ve replaced petro-cars with electric ones (EVs) run on climate-friendly energy, then we’ll still have to deal with the fact that millions of vehicles will continue to be bad news for the natural and built environment.

    EVs will still gobble up and degrade our eco-systems, reducing the amount of space for human beings and hastening the extinction of our fellow species (road kill and the disruption of migration routes).

    EVs are certainly an improvement on the present infernal combustion jobs, but they certainly won’t usher in a transport utopia. The next transition?

    • The solution to about half the problems you point out is already glaringly obvious and will be adopted right alongside EVs: self-driving vehicles will significantly reduce road fatalities including non-human ones, require fewer vehicles in total to do the same amount of useful work, significantly reduce demand for road surface and dramatically cut parking space requirements.

      Of course that’s only half way. But it could help us do the other obvious things too: more space for gardens and for separated cycle paths and walkways, and more amenity in the form of breathable and walkable neighbourhoods. That’s another half way at least.

  10. Very interesting essay, one might substitute the word brilliant for interesting, supported by equally brilliant replies. These are fascinating times revealing both the best and the worst (don’t mention the EU) aspects of humanity.

  11. Mike Ives

    Great logic as usual Paul. I do have some comments however. If I have got some of it or all of it wrong please comment someone:

    15 to 30 years: If we look at what IPCC’s WP1 SPM AR5 page 25 (Summary for Policy Makers) report it basically says to have had a better than 2/3rds chance of keeping below the 2 C average increase we were limited to emit no more than 2900 GtCO2 which has an allowance for all other non CO2 forgings. That is, the total allowed from somewhere between 1861 to 1880 of which we had already emitted somewhere between 1630 and 2150 GTCO2 by 2011. Now if we plug in what we are currently emitting plus that of land degradation, including the annual growths thereof, my sums suggest we have somewhere between 14 and 19 years to get it sorted. I hope sincerely I have goofed.

    Price competitive with fossil fuels: Now whatever the crunch dates are that CO2 budget has to allow for all the fossil fuel energy required for sourcing, manufacturing and commissioning all the energy alternatives (renewables etc.) we are going to need. As all global primary energy currently being consumed is from something in the order of 85% fossil fuel, we need to look very closely at the life cycle energy return on investment (EROI) equally, if not more so, than at the financial returns. While published EROI figures can vary considerably depending on the ground rules that were considered, there is some consensus that the likes of biofuels, Ni-ion batteries, PV cells etc., give a very poor energy return. Energy alternative selection in the coming decade will be of paramount importance.

  12. Leif Knutsen

    Paul: Thank you for your insights on the impending transition.

    “A revolution is coming – a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough – but a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability.

    ― Robert F. Kennedy

    I am old enough to have heard this quote in real time. I was involved in the Civil Right’s efforts in the 1960s and have continued to pursue equality and justice to this day. Climate change came on my radar in the early 1970s. I never dreamed that humanity would be so hubris as to let it progress this far and was over-joyed when Carter put solar on the Whitehouse. I thought at the time fossil was all over but the shouting. Silly me.

    However, here we are. I have been spending a lot of effort attempting to envision what the new Green Awakening Economy will need to look like as the transition moves forward. I would love to see a post of your insights on this in the future. More and more people will become unemployed as robots take over. Mass transit will change as self driving electric cars will pick you up at your doorstep and deliver you to your destination. Parking will not be an issue as the “car” will just move on to the next person and another will meet you when you are ready to leave. Small efficient electric vehicles like the Toyota i-Road and its ilk will open up the highways and minimize road repairs and buildout. Work weeks will shrink for those that even have a job and many will even work from home. I have a friend that is “head of finance” of a multimillion dollar start up that is doing that now. Traveling only occasionally to big conferences here and there.

    So where does the money come from to pay a living wage to those out of the pay “loop.” It will have to be a universal living wage but that to takes cash flow. IMO The question then becomes how do we get there. To that end I suggest a new international “Gold Standard” the “Green BTU Standard.” Along with that of course is a level playing field where black BTUs are priced according to their negative planetary impact. Distributed Green Energy then becomes a cash cow in the hands of and the improvement of the poor. The more the masses produce the better the standing of the nation’s financial standing. Export Green Energy, all the better. (Denmark has already done that to a small degree.) Soon all social services are cash on the barrel head. No deficits, no taxes. With no wars, the value of the BTUs go up. A healthy population, the same, as there is more GREEN energy to export in kind or value added.

    The “Greening” of the military will save over $1.2 trillion each year on from war alone. ~$170/year/person weighted toward the poorest of the poor. Green distributed energy will end terrorism far more effectively than drones, bombs, and all the rest of it. The military will be a training ground for those interesting in Permculture deployment, sustainable waste management, clean water access, Green energy deployment, etc.

    This just scratches the surface obviously, but I am over long as is. I would like to close with another quote from Albert Einstein: “I do not know the weapons of WW III but WW IV will be fought with sticks and stones.”
    I vote for WW III to be fought with equality, justice, and LOVE. WW IV with sonnets.

  13. Reblogged this on brain science and climate change and commented:
    Paul puts it together beautifully, and comes to the same conclusion I have–fossil fuels are over within 15-30 years.

    He says: Given climate policy action is also now accelerating, fossil fuels are double dead. To paraphrase Douglas Adams, “So long and thanks for all the energy”.

  14. Chris Harries

    I don’t doubt that the fossil fuel industry is reeling. What I don’t know – and I think it deserves much more discussion – is the timeframe for anything to replace it. More so the financial cost and energy cost of undertaking a complete global transition.

    Many comment on possible alternative technologies, but not so many on 1) the asymptotic need for their development in an impossible timeframe and whether or not doing so would 2) break the proverbial bank or 2) consume remaining fossil fuel energy reserves in the attempt to transition.

    At base, I think society will try to transition without changing its values (not wanting to disturb the collective comfort zone) including its growth and consumer values, and this is the futility that make many of us wary of waving the ‘bright new future is at hand’ flag. Or maybe we are being wusses?

  15. Karen

    Thanks again Paul. I would like to hear more from you on a smooth transition from consumer to conserver society.
    Dare I mention the “R” word? Rationing.
    Only people in the last part of a long life would actually have experiences of this method of controlling essential goods in society.
    I have the ration book that belonged to my Mother and which she took to the shops in England during the War and after into the early 50s.
    Cheers, Karen

    • Mike Ives

      Karen I am not too sure why I have been invited to comment on your posting but I agree rationing would be a powerful tool in this crisis we are facing. Getting folks to accept same or even lobbying politicians to legislate for it may be something of a challenge although the crisis implies that we do have a virtual war on our hands
      What in my view must be rationed internationally is the carbon budget, i.e. whatever the scientifically determined figure of green house gases we may still emit to keep our climate tolerable. One way I can suggest this may be equitably achieved is to ration out the scientifically determined carbon budget to each sovereign state on a pro-rata emissions basis. e.g. Australia emits around 1.12% of the world’s greenhouse gases per annum so it should be committed to de-carbonising within 1.12% of the remaining carbon budget and within a set period which reflects when the total carbon budget is likely to reach zero (This seems to be somewhere between 14 and 19 years from now on current emission figures). The pro rata amount must include that to create and commission the energy alternatives.

      • I think pro-rata rationing would be grossly inequitable, as it accords an ongoing advantage to countries which have already enjoyed a long historical advantage of unrationed, penalty-free fossil fuel consumption. Why should Australians have the right to 1.12% of the remaining emissions budget but Tanzanians only 0.02%?

        Rationed emissions allowances, if any, should be equal per person, and tradeable.

        http://www.gci.org.uk/

      • Mike Ives

        Good thinking Jonathan thanks. There needs to be some equitable ‘rationing’ of the carbon budget and although Tanzania only emits 1.6% of that of Australia as a whole their per capita emissions are only 0.76% of those of Australia. It may need some further study and possibly weighting factors need to be applied but whatever this ]rationing’ tack makes considerably more sense to me than having various sovereign states make ‘off the cuff’ de carbon commitments based on arbitrary past emission. Most of those made in general will have little or no real impact on the problem we face whilst consuming considerable public funds. Maybe we need to show the policy makers how to tackle the issue.

        Also I’m in favour of trading as long as it is monitored under International guidelines

      • Leif Knutsen

        Trading and selling carbon credits can be a valuable cash producer for nations that want to jump the gun. I like the thought of a world wide per person equatable allotment of total available sustainable emissions. Those should also be tradable. If one is living a sustainable life style already the sale of your credits could be cash flow to improve even more by producing more energy than consumed. A universal value for BTUs as I allude to below. A person could even profit from riding a grid tied stationary bike.

    • Leif Knutsen

      Fully agree John. Jobs are needed for all and the only jobs that can provide 100% employment and not kill the planet are GREEN JOBS. Green jobs are rewarding in and of themselves, are not rocket science, have room for advancement, and good for the Nation and the world. With universal health care, access to green transportation, and little to no tax, folks could work for far less wages and still improve their lives significantly. As folks worked their way up the pay scale the tax burden could increase and those folks would willing pay those taxes. The problem with taxes it that when the by far largest share of our tax $$$ are spent on war and subsidies for pollution profiteers that is when we get pissy about them. Transform the military from a killing machine to a Greening machine for starters. A Green CCC program deploying G energy, permaculture, water and sewer tech. Terrorism would become a thing of the past in a heart beat.

      Make the economic case for Universal Health Care the world over and the battle is won. Who would not want a Green Economy with 100% employment and a cost effective green economy. All paid for by the sun.

  16. Leif Knutsen

    So how can the Sun pay for all of the above? To that end I suggest a new international “Gold Standard” the “Green BTU Standard.” Along with that of course is a level playing field where black BTUs are priced according to their negative planetary impact. Distributed Green Energy then becomes a cash cow in the hands of and the improvement of the poor and the more the masses produce the better the standing of the nation’s financial footing. BTUs are then priced at the cost of all social services, be they street sweeper or health professional. Even a guaranteed minimum wage for all. Of course the BTU will be expensive if you must buy them and many will but with no tax etc. the burden will be tolerable. If you want to fuel up your bimbo yacht, fine, you will be paying for social services and environmental impacts of green house gasses. Not tax free “business expenses.” Export Green Energy, all the better. Soon all social services are cash on the barrel head. No deficits, no taxes. No IRS. With No wars, the cost of the BTUs go down. A healthy population, the same, as there is more GREEN energy to export in kind or value added. Nations will be motivated to care for the bottom up, not the top down, who are never satisfied anyway. Work weeks will be short or nonexistent. It is the trend even now. Travel will be electrified and minimized. Communities will be rebuilt. Population will fall. Greed will vanish.

    “A revolution is coming – a revolution which will be peaceful if we are wise enough; compassionate if we care enough; successful if we are fortunate enough – but a revolution which is coming whether we will it or not. We can affect its character; we cannot alter its inevitability.

    ― Robert F. Kennedy

  17. Rich Persoff

    “we risk making serious and damaging mistakes in climate and economic policy, in investment strategy and in geopolitics and defence.” When have such warnings ever prevented people of power from using their power and authority to their short-term advantage? Reminding people of P & A that it is their duty to provide for the rest of us who just want to have relatively decent lives for ourselves and our children without trashing the world is shoveling sand against the tide. If this class and its perverted values run the new society (e. g., existing utilities changing over to solar & wind power) these basically perverted values will continue to determine the directions of our lives and world. The difficulty with preventing ‘Mr. Big’ to continue to run things is that not enough ‘Ms. and Mr. Littles’ are willing to selflessly put in the heavy lifting to change our world. Secretly, a lot people would like to be Donald Trump — or at least have his wealth, apparent independence, and selfishness!

  18. Nice discussion.

    This is living on Earth. The changes we make on Earth (whether burning fuel, building and construction, others) have a significant impact on how the planet looks like today. Building and construction is significantly changing the rotation of the planet Earth because of changing the centre of mass of the Earth – this consequently gives the rise or fall of sea water levels in various parts of the planet; and even changes in climate/temperatures. This is only an opinion though.

    (Humans have different governments looking after town/urban/city planning initiatives; no one is looking after global planning.) Is it needed? It’s up to humans to decide, unless external intervention is needed.

    • Haha. It’s nice to daydream about divine or extraterrestrial intervention when despairing of humanity’s ability and determination to act responsibly. Hardly a likely scenario, though. Personally I find it comforting to think of “the better angels of our nature”: humans actually do have a reasonably good track record of improving our own conditions and our behaviour towards one another.

      http://stevenpinker.com/publications/better-angels-our-nature

      I like to think that we will, of necessity, extend this trend to our respect for our planet itself and our fellow non-human creatures.

      As for construction work changing the centre of gravity of the earth — nuh-uh. Compared with natural movements of water, water-carried sediment, and tectonic and seismic activity, the mass of human works is truly negligible. The Earth is plenty resilient enough to cope with those. The deleterious effects of our labours are being noticed *first* via anthropogenic changes in atmospheric concentrations of greenhouse gases on the order of parts per million for a clear reason: this is the smallest change that could possibly have had a significant effect on the global climate. Some of our other activities are also very destructive (overfishing, forest clearing, monocultures in agriculture, other types of pollution) and must also urgently be addressed, but IMO they are distinctly lower in priority to energy-related greenhouse gas pollution.

  19. Carl Raymond S

    Somebody asked about air travel. Electric air travel will happen, and like driverless cars, the planes will be pilotless. There are fewer random happenings in the air. The algorithms are actually easier. Short flights (under one hour) will happen first. Longer as the energy density improves. Without fuel and pilot, flights will be cheap. Without noise, airstrips will not face opposition.
    Similar story in shipping. Big electric ferries already exist. Many ships are diesel electric, so they already have the electric motors – just add as many battery containers as required. Perhaps we will see battery swap stations midway across oceans. The huge fuel savings will drive it.

  20. Terry Harrison, retired engineer and farmer

    Remember how accurate “The Great Disruption” has been in its predictions when finding fault with Paul’s latest – we have reached the tipping point and the disruption has begun, complete with the refugees crashing borders as he predicted.

    There are a few things missing in this thread. Methane is a problem alright but need not be from cows. Pasture raised cows and sheep do not emit nearly as much as those fed corn in feed lots. In the US, we currently subsidize farming grain which is transported to feed lots to fatten cattle faster than if the cows eat in the field without all that tractor work. Farming is the solution, carbon farming that is. The best thing that came out of Paris is the agreement of a few nations to lower the organic content of their soils .4%/year. There is only so much carbon in the world, there it is just not enough in the ground where it belongs, it is in the air and oceans. We can sequester the excess by raising soil organics 2%. It used to be 6% a couple of centuries ago in the US and is now 1%. Of course we can only do this once. Then we will have to maintain it at a high level and have our emissions under control. See Marin Carbon Project for details of how this works in pasture. Non irrigated pastured animals use little energy/food calorie. The other facet is no till which maintains the millions of soil organisms which die when the soil is cultivated.

    The Marin carbon project uses compost. California just passed legislation that soon all food waste will not go into land fills. This can provide the compost for putting the carbon back into the soil. (Yes, know we are behind some other countries in doing this). Congratulations for doing it earlier.

    • Mike Ives

      Much of your comment Terry about returning organic matter to the soil is promoted by Peter Andrews in his book ‘Beyond the Brink’ which seems logical enough regime to me but remarkably he promotes the notion that CO2 in the atmosphere is not the real enemy and that current Global Warming is largely a natural phenomena as in the past with only a little (around 5%) impact from our burning of fossil fuels and supports one estimate that termite action is releasing 60% of the heat reflecting gas.

      The book has complimentary comments and forwards by prominent Australian figures. Am I missing something?

  21. Roger Hawkins

    Paul, we urgently need to fix a problem here in your home state. http://www.abc.net.au/news/2016-04-11/hydro-tasmania-dam-levels-stabilise/7317442 Leadership is needed to move from our states’s reliance on bass link, Vic fossil fuelled power. The planned 200 MW dirty Diesel Generators just don’t cut it in the clean green state! Why oh why can’t we move more quickly to renewable energy sources and educate consumers and business about reducing energy consumption.

    • Mike Ives

      I heartily second that motion. The sooner we know renewables will actually fill the bill, plus cater for things like transport energy, the better. Inflows into Tasmanian catchment areas have been falling for the last 70 years and no longer can we expect hydro electricity to meet our demands. Tasmania has the hydro capacity (MW) to cater for all our current electricity demand, if only we had the fuel (water). Dams here seldom get to 50% capacity any more. 100% renewables, including a large portion of variable sources, like wind and solar, in Tasmania would also be a vital trail run for the rest of Australia and beyond.

      • Leif Knutsen

        Renewables also help take the pressure of of the water requirements of any given country. Allowing motor water for agriculture, wildlife and drinking.

      • Chris Harries

        Hydro generation around the world has been affected variously as a result of a changing climate. Some, especially in glacial areas, have been recording increased water inflows, but it seems the majority are affected negatively, mainly as a result of increased water evaporation from soils, resulting in reduced run-off. The Tasmanian hydro-electric system is definitely in this category having lost over 10 percent of its estimated long term energy yield.

        All hydro electric systems need a level of non-hydro generation capacity and in the past this has meant coal,oil or gas fired power in the past. In Tasmania’s case we got to rely too much on low cost imports from Victoria during off peak. That’s why overtures to state government to support additional renewable generation in Tasmania fellow deaf ears. It was cheaper to import.

        The silver lining to this summer’s energy debacle is that we may now get listened to. It is now possible to back up hydro with wind and solar and from a generation post of view this is a very compatible marriage. Certainly Tasmania is in the box seat in this regard.

        My back of the envelope calculation is that we need approx one third of generation capacity to be non-hydro in order to tide us through drought periods and maintain energy security. This means about 400 MW average combined wind and solar output through whatever configuration will deliver this.

        (There would be some scope for additional hydro-electric output too, though this tends to be self defeating in that it simply adds to the energy shortfall during drought periods.)

      • Mike Ives

        That is very interesting Chris. Actually I was suggesting it would be most beneficial to set up the Tasmanian grid in a way to prove, or not, whether we could actually replace the Tasmanian grid supply (11604 GWh pa) entirely with renewables. Using the same ratios as suggested by Professor Diesendorf’s models for 100% Australian grid i.e. Wind 46%, PV 20%, CSP 22%, Biomass 6% but with only 6% Hydro it looks more like a total of 3,380 new MWe however. We could then sell any surplus hydro to Victoria to offset their brown coal contribution once we get BASSLINK functioning again to help pay the ‘loan’.

  22. I can’t believe that after such a fantastic headline….. I was left disappointed. Of course fossil fuels are finished. But it won’t be renewables that will finish them off, it’s the collapsing ERoEI of the FFs that will. AND…. we could be running out of viable oil within as little as FIVE YEARS, not the 15 to 30 years Paul writes here. The oil companies are as good as bankrupt, and their oil will soon be making zero energy profit. Financially AND energetically bankrupt.

    https://damnthematrix.wordpress.com/2016/10/23/do-we-have-five-years-left/

    Furthermore, with the collapse of the fossil fuels will certainly come the collapse of the global economy. At this stage, you can kiss your renewables goodbye, it just ain’t gonna happen, because renewables are utterly dependent on FFs for their manufacture.

    The party’s over, and we must live more simply so we may simply live. Otherwise, we’re all going over the energy cliff.

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