That's kind of sad.
A long time ago (just before the GFC) I looked at trends in climate change (Arctic sea ice specifically, but that's just a canary), demography, China's GDP, and things like PV/Wind learning curves, and said to myself: "things will get interesting in 2023, plus or minus 7 years." Meaning, geopolitically.
Covid seems to have accelerated events, but the trends were all there way back then, visible to anyone who had the time to think about them. I seem to recall reading warnings by internal think tanks in the US Military that were penned in 2005 or so, warning of these very issues.
Still, I have printed and blu-tacked up the quote from Axel Oxenstierna: "Do you not know, my son, with how very little wisdom the world is governed?"[1].
So I shouldn't be surprised.
Also, he narrates that book but not the new one. Which is too bad because his narration is truly additive to the book.
His Twitter feed is high signal as well: https://twitter.com/PeterZeihan/
The future will far more likely turn out to be mundanely unpleasant rather than captivatingly apocalyptic. But that wouldn't keep the audience that Zeihan has on the edge of it's seat and so while many others in his field think that way, they're not garnering the same kind of views.
I find his stuff very engaging and there's a lot to be taken from it, but it should be taken with a skeptical mindset of 'what's the most boring way this might play out' to approach some kind of truth.
An interesting fact here is that the UAE will never become poor.
The UAE has saved up over 1.3 million USD dollars per citizen[a]. And this is just the government’s savings. Obviously, there’s immense private wealth on top of that as well. Even if with investment returns as low as 4% per year drawn out, that would translate to $52,000 per citizen.
This is 52k of money that you could almost call free money. We’re not counting for the fact that at least half these citizens are not going to simply sit at home. They’re going to work, earn, start companies, etc. And the citizenry is very highly educated. And a lot of them actually have STEM degrees too (which correlates with higher earnings). So realistically, the per capita annual income could be in the over $100k per citizen range, even after the oil has run out.
[a] The UAE has about 1 million citizens (most of the ~9 million who live in the UAE are not citizens), and the UAE’s sovereign wealth funds have total assets exceeding USD $1.3 trillion: https://en.m.wikipedia.org/wiki/List_of_countries_by_soverei...
It’s interesting that UAE is doing the same thing that Nauru did except on a larger scale with petrochemicals instead of phosphate.
https://en.wikipedia.org/wiki/Nauru_Phosphate_Royalties_Trus...
The UAE had long been forced by the British and the Americans to abolish slavery before they gained their independence. This, unlike Saudi Arabia, where it was legal long after the 1970s.
About the "slave" jobs, most of them are basically menial jobs with really shit pay and a combined bunk accommodation. But it's far better than what we get back in India or Pakistan or Bangladesh, which is usually the unemployment line. A number of people have improved their station and are part of the local business community from those levels.
A company taking a person’s passport is explicitly illegal in the UAE: https://dubaihow.com/holding-passport-employee-uae/
It carries a criminal prison sentence and a fine. And there’s a big push by the UAE government to go after, and prosecute employers who break this law.
I don’t know why people in Western countries, always without fail, mention this whenever the UAE comes up.
Imagine every time the US was mentioned, a person always pointed out how some private companies in the US treated their employees poorly and abusively (which I’m sure happens). It would be absurd.
In Israel we have a lot of love for the UAE. Together, we're already sharing agra-tech, water-tech, and finance. Israel is looking forward to learning about some of the construction methods being pioneered in building up the desert. This is an unbelievably warm peace.
Things can change surprisingly fast. My grandmother was born close to the peak of the British Empire, within a few years (plus or minus) of Irish independence; by the time my older brother was born the Empire was reduced to about 5 million people outside the UK, and by the time I was born the UK had humiliated itself by managing to lose a naval dispute with Iceland despite the entire population of Iceland country being approximately the same as the number of personnel in the UK armed forces.
Also Norway would collapse too, since both the Norwegian and Abu Dhabi SWF have very similar investment profiles.
Last time I checked, the British Empire hadn't invested a dime into either the US or Chinese stock markets. Or even had a sovereign wealth fund for that matter.
Now I’m a software dev not an economist, so perhaps you know better, but I have been told that WW2 essentially bankrupted the British Empire, which was 36.54% of global GDP in 1913.
I am happy to assume the SWF is invested wisely, but even if the manager’s kids and grandkids continue to invest wisely and learn the explicit lessons of the mistakes of others without ever falling into the mindset that they’re “too big [for anyone else to allow them to] fail” and therefore take risks that make failure more likely, black swan events are an ever-present risk. Indeed, one reason I referenced British Empire is the phrase “the empire on which the sun never sets” — it set on the British, and one day it will set on all the nations that now exist, including UAE.
As for the managers' capabilities, it's not some dude sitting in an office managing a trillion dollars - it's a team of highly brilliant investors who either invest directly or outsource the investing to multiple megafund investor firms across multiple risk profiles such as Blackrock or Blackstone or Vanguard or Citadel, all of whom hire really talented folks (unlike the typical investment banking industry). Nowhere near your dad advising you to invest in LBG.
Also the term "The Sun never sets on the British empire" implied geographical dominance across the world, not immortal dominance. Before you guys, it was the Spanish claiming that.
There is no need for that kind of language.
I give the example of my father’s advice because, to repeat myself for emphasis, the global financial system did in fact go very very badly wrong (and not for the first time).
The fact that his argument was also your argument is the segue, not the point.
> it's not some dude sitting in an office managing a trillion dollars - it's a team of highly brilliant investors who either invest directly or outsource the investing to multiple megafund investor firms across multiple risk profiles
I did not wish to imply that it was merely “some dude”, and I am disappointed that you chose to interpret my words as such. After all, I would not imply that you think that Lloyds bank lost so much market cap because “some dude” was planning their business strategy.
I wish to imply that (1) things change, and (2) that a current state of competent management is not something that can be assured forever.
This implication was illustrated with one of many historical examples of nations and empires thought indefatigable at their peak which are now no more.
I also illustrated it with the example of the global financial crisis which led to Lloyds losing so much value. I believe that was caused by teams of highly brilliant investors applying a Nobel-prize winning formula.
> Also the term "The Sun never sets on the British empire" implied geographical dominance across the world, not immortal dominance. Before you guys, it was the Spanish claiming that.
I was already aware both that it was previously used by the Spanish and that one usage was geographical, however it was also used by British people in the sense of never ending dominance - https://access-socialstudies.cappelendamm.no/c316302/tekstop...
And has since tripled from pre-GFC peaks. Markets are cyclical, you think funds haven't baked that into their models?
> I wish to imply that (1) things change, and (2) that a current state of competent management is not something that can be assured forever.
Competency in management is a passed down skill, not an innate skill that someone alone possesses. From what I've observed by working with them directly, all SWFs hire the best people across the world, without discriminating based on nationality (except for Chairmanship). As long as the global talent pool exists at the same standards or higher, these funds will have the manpower required to manage. In most cases, they even paid better than most private investment firms, and all of them paid more than tech, management consulting or investment banking. A lot of their venture arms were led/advised by former tech entrepreneurs for instance.
> After all, I would not imply that you think that Lloyds bank lost so much market cap because “some dude” was planning their business strategy
LBG lost so much market cap precisely because some dudes, the CEOs, failed in planning their business strategy well. All of the UK banks messed up big time during the GFC, and hence all of them are failures right now. Barclay's is only standing now because the Qataris bought into it. But that's one sector in one country alone.
> This implication was illustrated with one of many historical examples of nations and empires thought indefatigable at their peak which are now no more
None of Norway, the UAE or Singapore are empires. If you want to talk about nations, France, Spain, Norway, Sweden, etc still exist as independent nations even after so many centuries right? In almost all cases, they've even bumped up their GDP, even if not by much, in spite of losing their colonial holdings.
> I believe that was caused by teams of highly brilliant investors applying a Nobel-prize winning formula.
You're talking about Long Term Capital Management (LTCM) collapsing, which happened in 1997. Those Nobel-winning guys failed by betting massively on Russian securities, believing that Russia would open up after USSR dissolution. Again, the focus on one strategy alone.
Point was, you are focusing on one investment alone in all examples. Meanwhile, these SWFs are vastly diversified across various security products. As I said before, if you want to take down any SWF, you would have to take down the global economy. That would mean taking down BOTH USA and China, which these countries are invested into. Even if only one country collapsed, these funds will survive because they are that diversified. While the GFC punished most of the finance industry, these funds survived because they were highly spread out. If the USA AND China were to collapse though, I doubt the free market concept would even exist by then. That would mean no more FAANG, no more tech companies, no more cushy SV jobs, heck, no more HackerNews. I doubt (and they doubt too) that the USA and China would let such a collapse happen though - as we've seen in the GFC era, and currently in the C19 era.
> however it was also used by British people in the sense of never ending dominance
Their mistake, classic British hubris. Not to mention, as I've said before, neither the UAE, Norway, Singapore, etc consider themselves as empires in this day and age. On the contrary, all of these places are extremely cautious about the future - the UAE fund constantly worries about oil drying up and began investing into renewables research around the world since the early 2000s, Singapore worries constantly about global warming and Malaysia cutting them off, Norway's SWF worries too much about being too dependent on oil revenues...
You mention the UAE dipping into its SWF, except it already does that. The SWF accumulates the oil wealth from exports, which is reinvested into various investments around the world. A fraction (about 50B USD) of the annual returns from that wealth is what is used to run the UAE and all of its welfare programmes, its military, etc. Unlike the Saudis, UAE and Qatar both benefit from really small local populations - there are about 300k Qatari citizens and 1M Emirati citizens worldwide.
And Buffett is not lucky. He made a lot of successful bets everywhere year - I recommend reading his investor letters if you can, where he explains his rationale behind every investment decision, including the ones that turned out to be duds.
Just as you say that SWFs won't exist in 50 years, there are banks in Switzerland that have existed for hundreds of years. Oxford and Cambridge are just as prestigious today as they were 800 years ago. Once a culture is established and buttressed, it will be hard to shake it off.
It's like saying a company has lots of money saved. Doesn't matter much if the operation aren't profitable.
Economic activity ceasing is still what it is.
...in any case, gulf oil will likely be the last well abandoned. It's so cheap to produce that production can continue at very low oil prices. The last half of any adoption curve is long, and people will still consume some oil and gas for several more decades.
Oil won't go away of course, once the huge capital investment no longer makes sense it will become less abundant as fewer companies will be extracting and refining it. So they could see profits from oil as a niche resource in a post oil world.
Meanwhile, given the local Emirati will form a small fraction of the economy, they may effectively act as rent seekers on income and corporate tax from the rest of the economy.
Will this be an ideal egalitarian society? Probably not, at least in terms of my values. But those seem like the underlying dynamics, for better or worse.
Of course, if diversification isn't competitive relative to the rest of the world, things will go the other way.
Yup, it’s happening. Gigawatts of solar power is being constructed. The UAE is getting this solar energy at the cheapest price per watt worldwide as well: https://www.forbes.com/sites/dominicdudley/2020/04/28/abu-dh...
> will be dependent on importing talented labour
This is already happening at a massive scale.
> That will only happen with low tax rate
This is also already true. The personal income tax rate is 0%. Most types of companies don’t pay any taxes either. The only tax you directly incur is the VAT of 5%.
> Will this be an ideal egalitarian society?
In the future, it’ll probably transform more and more into a sort of hyper-capitalistic and highly-successful country like Switzerland.
Almost all of that wealth is concentrated in the sovereign wealth fund of the emirate of Abu Dhabi, because Abu Dhabi has by far the largest oil reserves. Next is Dubai, which has much less accumulated in its sovereign wealth fund, because it's nearly run out of oil. However it's done a lot to diversity its economy into finance, services, and tourism.
But as for the other five emirates, the picture is much more bleak. Nor is it like the US, where finances or taxation are co-mingled on the federal level to any serious degree. If California generates a lot of wealth relative to Alabama, you'd expect a lot to be redistributed. But Abu Dhabi will not be sending any of its enormous wealth holdings to Sharjah by any means.
That line of reasoning always make me smile.
That's like assuming that once you get a certain threshold of wealth, you can automatically assume you'll be fine forever.
And by the way, that "as low as 4%"... Most people throw percentages all around the table, easy like that... Seems funny.
Call me stupid, but the idea of a whole country being able to piggyback off all other countries seems unlikely to say the least.
Also, I didn’t pull the 4% out of a hat. It’s actually the “Safe Withdrawal Rate[a]” recommended by Mr. Money Mustache. See his blog posts on it: https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-nee...
Also, see: https://www.mrmoneymustache.com/2018/11/29/how-to-retire-for...
[a] Bogleheads article on Safe withdrawal rates: https://www.bogleheads.org/wiki/Safe_withdrawal_rates
But their land might become uninhabitable in a few decades.
https://www.washingtonpost.com/graphics/2019/world/climate-e...
I wonder if in the future, camels will be owned and/or ridden only by very wealthy individuals.
(like many horses nowadays)
We have boarded horses for years. You'd be surprised at how little money the average horse owner makes. People tend to only think of the expensive racehorses and the wealthy people who own them and not of the person who works, e.g., as a McDonald's manager and paid $700 for her horse and less in monthly upkeep than a car payment.
It all seems to have gone pretty well for Saudi to date.
Are they even the ones in charge of the country?
The next step is to sell that stock before the oil market collapses, preferably leaving themselves with a lot of cash and a minority stake in a much smaller company.
Cash is going into technology stocks, venture funds, and international real estate.
1) Diversify their economy
2) Build up enough sovereign wealth to maintain their citizens standard of living after the oil has run out.
The first is very hard, because huge percentages of their population are completely disengaged from the economy. It's estimated that 30-40% of working age adults neither have a job, nor are looking for one. An unusually high percentage of those who have jobs work for the government, and somewhere close to 90% of non-oil jobs are held by foreigners. There is immense social and economic pressure against citizens of KSA getting private sector jobs. The biggest "employer" in the country is the yearly hajj pilgrimage, which isn't a lot.
The latter is incredibly hard because of the former. That 30-40% of the population that don't have jobs need to be fed, or they'll eventually revolt. And all of those government jobs cost a huge amount of money. And the fact that the citizens of KSA neither want jobs (apparently) and aren't properly trained for a lot of those jobs makes reducing the social services bill very, very hard.
If they can outrun the de-carbonization of the world, KSA will do okay. Maybe not as good as it was during the peak (if you were one of the few getting the benefits), but not terrible. If they don't outrun de-carbonization .... well, then I would recommend not being there when whatever happens, happens.
The system though ultimately is designed to ensure wealth flows upwards to the top, not to actually build a capitalist economy with a guaranteed minimum living standard.
Perceived cultural differences, possibly leading to more interesting, uncomfortable parallels than many would like. On the ground in the kingdom, in the field, there is an enormous cultural bias towards status, and low-status jobs are shunned. This is made more complex because of a subtle, more recent cultural bias that emerged from having foreigners perform almost all the work for so long, and foreigners in Wahhabi faith as it is practically practiced (in theory it is different) are considered inferior in an unenlightened sense. A halo effect emerged around private jobs, and now any job at all that used to be performed by foreigners is considered low(er) status.
This is changing rapidly and gaining steam in numbers at the margins with many younger generations. I've met some incredibly brilliant, young KSA native engineers. Many are working hard to reverse the rot the Resource Curse visited upon the kingdom.
However, I wouldn't be so quick to dismiss that kingdom's experience as unique to it, saying that does not apply to America or many other developed nations. Considering the penchant for superficial solutions, get-rich-quick adulation, and de facto class stratifications in all developed nations, I'm not sanguine a UBI would elicit much better results than a Resource Curse. Norway is an exception that proves the rule, from what I've seen so far.
And I wouldn't point fingers at just nations, either. Even here on HN, where startups with fast 10-1,000X liquidity events receive gallons of ink compared to the inkjet droplets miserly begrudged to to self-funding, slow organic growth companies, we engage in similar dynamics.
Making someone or a nation fabulously wealthy and/or powerful doesn't change them, it only discloses their true character and moral fiber. The uncomfortable truth is a substantial portion of us, whether at the individual or nation-state level, when granted free reign with no one saying "No", are jerks. IMHO UBI is like pure communism or pure capitalism: they only sustainably and consistently work if the vast majority (I'd personally guess around 95%) are truly not jerks, and thus have the means to keep the levers of power away from those who are.
BTW, I'm one of those jerks. Maybe not the biggest douche-canoe you've ever met, but I'm definitely a jerk, though I chip away at that.
What they need to do is stop pumping it, and soon, otherwise climate change will cook us all.
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Sure, but not nearly in as large of quantities.
If the value of saudi arabian oil plummets to 1/4th its value, then they are still screwed, even though "oil is still used as raw materials" and it has non-zero value.
Owning something that is almost worthless isn't really much better than owning something that is literally worthless.
First, most plastics are now made from natural gas, something KSA doesn’t produce a huge amount of. They’ve got decent reserves, but their production lags. Qatar produced 70% more LNG last year than KSA. LNG is also kind of a pain to transit by sea, which advantages countries that can produce natural gas closer to the factories (e.g. The United States and Russia, among others).
And second, plastic production consumes a relatively small part of the world petroleum production. Here in the US it’s estimated that about 2.7% of our yearly petroleum consumption. World wide only 4% of world petroleum went into plastics (2012 figure).
So even if plastics continue to be made of oil, plastic consumption remains constant, and there is no major shift in who produces the feedstocks for plastic (all wildly optimistic assumptions), then KSA can expect to keep about 2.7-4% of their current oil export budgets. That is catastrophic for a country like KSA, who needs all the oil money they can get.
Why would a poor country not purchase the cheaper option?
Can you think of a renewable source of energy that’s both attractive to poor and developing countries, and also practical?
Oil is easy. You put it in a tank, then pump it through an atomizer, and set it on fire. You can transport it easily, it works anywhere, and you can run a car on it. I know, electric cars are a thing, but not in the places I’m talking about here.
Electrical transmission across long distances, and, especially between different countries with different power grids is a nightmare.
What am I missing here?
Biomass puts CO2 back in the atmosphere, but at least it’s not increasing the total CO2 in the biosphere.
There's no need to pump it around, at all. You can transport it by truck. Growing up, my family had a fuel oil heater. We'd have the tank filled periodically, and that was all there was. Likewise, gas pumps are just storage tanks hooked up to pumps. There's practically nothing to it; it's all basically 19th century technology that's easy to build, and doesn't require any sophisticated engineering.
0 - https://www.desmogblog.com/sites/beta.desmogblog.com/files/n...
1 - https://theodora.com/pipelines/europe_oil_and_gas_pipelines_...
Similar to how much of the developed world skipped landline phones, and went straight to cellphones, because they didn't have to build as much connection infrastructure.
Wind and solar (the ones getting cheaper) need storage, not transmission.
So, the question is: is there the political will in the developed world to help the developing world bootstrap renewable energy? History suggests not, unfortunately, but I would love to be wrong on this.
Edit: I forgot to mention, as well: lithium batteries eventually lose capacity and need to be replaced. So, storage is essentially an ongoing maintenance cost in this scenario. Google tells me that the Megapack costs ~$300/kW, all in, so, add that to the cost of your renewable energy. [0] Once you do that, if you're thinking short term, fossil fuels start looking really, really good.
Not to mention that lithium is a limited resource, and the mining of lithium is absolutely terrible for the local environment.
Google also tells me that the Tesla Megapack comes with a 15 year "energy retention" warranty. [1] So, you need to make this investment every 15 years. And, unless the prices of batteries go way down per kWh, that can add up real quick.
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[0]: https://cleantechnica.com/2020/10/05/tesla-megapack-powerpac...
Additionally, these are today’s prices, as per this OP article the price for renewables is dropping exponentially every year. And if Elon Musk is to be believed (which I do) the price for storage is also dropping exponentially.
Given these trends it seems a no brainer that the developing world will skip fossil fuel entirely. Barring air travel, the entire worlds air and space travel will likely continue to use fossil fuels for the next decade or two.
[1] https://pv-magazine-usa.com/2019/09/10/los-angeles-commissio...
Hum? You buy some batteries and install them.
You don't need geographic stability, you don't need stable property rights, you don't need widespread law enforcement. One can even solve it one house at a time, at a (not much) larger price.
What kinds of problems do you expect developed countries to go help poor ones with?
Realistically - they'll get deported to their home countries. There's no government on earth that will tolerate a non-citizen, non-refugee as a public charge with no prospect of being productive in the future. Foreigners are politically convenient scape-goats for all that is wrong with {ECONOMY|JOBS|CRIME|SERVICE DELIVERY}, and politicians will politic.
The migrants will try to migrate somewhere else that has work.
I mean if you own a skyscraper in NY you're basically set for life. Multiple lives.
And that's how the situation in SF came to be. Lots of money wanting to be "saved" by tech.
[1] https://www.amazon.com/Technological-Revolutions-Financial-C...
Hell, I'm currently renting an apartment and I don't own shit now, let alone 20 years down the line.
Japanese homes have a lifespan of 30 years.
But in the UK people routinely buy houses/apartments on leasehold which means you only "own" it for e.g. 99 years (sometimes less). Crazy if you ask me, "normal" if you ask them.
Plastics, shipping fuels, many manufacturing processes use oil during manufacturing but perhaps not in the final product. Vehicles are still decades away from being replaced by EVs.
The technology is all there and there are some "quick wins" coming around the corner I think. Container shipping switching to nuclear would be a quick change once regulations are in place for one example.
This comment sent me looking, and I didn't see anyone making any kind of move towards installing a regulatory environment that is conducive towards a "quick win" for nuclear-powered container ships. This Flexport article [1] was interesting, but didn't mention any such legislative moves afoot. This article [2] lays some numbers down.
One way I can see to introduce and sustain nuclear-powered container vessels is to expand US naval shipyards that currently handle nuclear carrier and submarine construction to take on the container vessels' commissioning, refueling, maintenance, and decommissioning, design vessels with much longer service lifespans than current container ships to amortize the cost over a much longer period, standardize the power plants on existing designs, and carve out specially-secured multimodal ports with preferential rates for the nuclear-powered container vessels with much faster container moving infrastructure. In the US political-economic landscape, this would spread out the current military expenditures on the power plant R&D, manufacturing capex, and opex costs, into a wider market.
It would be an interesting geopolitical power play a nation, if the nation subsidized from taxpayer funds the regulatory compliance and national flagging expenses, to make a play to dominate and control the global container shipping service market. Nearly half of container ship opex costs are fuel and port costs [3]. Subsidize away the ruinous regulatory and security compliance costs of nuclear, crater the existing bunker-fuel powered shipping market rates, and controlling global shipping could be wielded as a significant geopolitical tool. Certainly cheaper than the trillions spent on the US military, and delivers leverage at the logistical and supply chain level. I can easily see China do this too, especially with their OBOR initiative. If this came to pass by any nation, then I'm sure it would rightly alarm a lot of people and nations.
[1] https://www.flexport.com/blog/nuclear-powered-cargo-ships/
[2] https://cleantechnica.com/2017/01/28/now-time-nuclear-cargo-...
Because obviously the primary goal of the military isn't cost-saving, it's having subs & aircraft carriers that can stay sea-borne indefinitely. So they'd be using them even if they're actually (much) more expensive
Heck no. As a new tech platform without volume production, they'll be wildly more expensive until the vessel fabricators and ship operators hit that growth knee where experience and volume combine to deliver innovations and cost scaling of their sourcing where the savings stack up. Except in this case the savings have to come from automating the regulatory compliance and operational security of the power plants, both challenging problem spaces.
This is why I specifically pointed out subsidization of those areas to even out the playing field, like the tax subsidies for renewable power. It is a decades-long play for power if someone makes it a national priority. The US has possibly the most advanced ocean-going nuclear vessel tech base, has a best-in-world operational excellence in rail freight, and arguably one of the best freight logistics industries and infrastructure in the world. The US could have dominated the world through its own OBOR on a global scale in a similar way China is trying to dominate as a mercantilist superpower, through effectively owning commercial sector logistical network effects. But trying to convince the DoD and Congress the trillions that would take over decades means convincing them that is effectively what one part of soft power projection-oriented next generation war in the information age looks like. There are any number of other competing theories about next-gen war with much better-funded research and adherents out there, so it's a non-starter.
The US let a significant fraction of its manufacturing and shipping infrastructure comparatively atrophy over the past few decades, so as long as it has to retool with more automation and physical infrastructure to catch up with the leaders, it might as well implement leaps of efficiency over the current state of the art like using gantry cranes to mass-lift entire multiple layers of containers [1] in a single lift cycle. The load/unload/downtime/travel-time components all need lots more operational automation and innovation for nuclear commercial ships for automated regulatory compliance to be feasible, but many developed nations (especially US and China) have the tech base to combine in novel ways to deliver.
[1] https://supplychaingamechanger.com/is-there-a-faster-way-to-...
This is one of those things that will not take off without government initiative - risky, expensive to invest and develop, regulatorily difficult. The payoff is potentially massove though
Mind you the culture nees to change too, we've had quite a few ships seized by pirates or capsized because the crew was drunk
So far, fossil fuels still represent about 85% of our energy consumption, and about 99% for transportation.
We had a world 100% on renewable, back in the 18th century, but we were 600 millions and lived 35 years. OTOH we have no credible way to replace 85% of our energy by renewables in the next 10 years (if we want to keep climate change at reasonable levels).
It's simply a matter of political will.
Musk looked at the regulatory tape around nuclear and said "I guess it has to be solar then" and I think that was a mistake. If we'd applied his economics of scale, and first principles thinking to nuclear we'd be far, far more along than we are right now and we'd probably have more medical isotopes to boot.
Also, solar power overwhelmingly our largest energy source. It’s generally ignored in these calculations but farms for example are very dependent on sunlight.
PS: “battery grade” lithium is more expensive, but what changes isn’t the amount of lithium but removal of minor impurities.
There's nothing renewable about using wood if you're not replanting the forest.
I'm not sure if this changes your point but many people lived to their 70s and 80s in the 18th century as they have for recorded history.
For example, here's a dataset on USA historical life expectancy https://www.infoplease.com/us/health-statistics/life-expecta... - if we look at the 1850 data, then the average life expectancy at birth is 38 years but that does not mean that people live until 38, as a the life expectancy for a random 20 year old man is 40 more years, so people (who didn't die in early childhood) lived (on average) to the age of 60, not 38.
There's data from Roman Empire where life expectancy was 25 years at birth, but life expectancy is average 53 years upon reaching age 25 - so the intuitive metric "how long do adults live" is twice as large as the technical life expectancy at birth.
Here's an archived resource that goes into more detail https://web.archive.org/web/20070713083310/http://www.plimot...
As to abandoning energy sources, total amount of wood burned is actually down significantly as agriculture has dominated land usage age. In the Middle Ages for example large tracts of land where devoted to having little forests as a replenishing source of wood, various useful plant species, and wild game.
Less well known energy sources like whale oil and animal dung are also down in absolute terms.
Energy sources do get replaced. Just not every time.
The largest solar plant is at about 2000 MW and requires a lot of land. https://en.wikipedia.org/wiki/Bhadla_Solar_Park
The largest wind farm is not being used as efficiently as it could: https://en.wikipedia.org/wiki/Gansu_Wind_Farm
Of course you'd want to rely on wind power more than just going all in for solar in Germany. It's not a particularly sunny country.
In hindsight, Chernobyl might have done more harm to the planet than we thought - it single handedly turned public opinion against nuclear power, and all the clean energy it provides.
One wonders if we would have any of our current climate issues if we had adopted nuclear power en masse in the 80s and 90s.
In a decade renewables will be so far ahead that it would be plain stupid to push nuclear. This is why it's not happening outside a lobby group from the industry who try to push shady people like Michael Shellenberger.
Maybe if we had adopted nuclear en masse in the 80s we could have avoided current climate issues, but we didn't. I don't see why anybody thinks there's any point subsidizing this industry to hell and back now given the cost and the cheaper, less capital intensive options available that don't need subsidies.
Saudi Arabia has a sovereign wealth fund with trillions of dollars. The obvious answer is that they'll build a ton of renewables and build a ton of [hydroponic/aquaponic/aeroponic/etc] farms to make food locally.
Indoor farming is expensive but very water-efficient, which suits Saudi Arabia as their water comes from expensive desalination plants.
I remember an old discussion about this. The main problem is that transmission lines to potential customers would have to traverse unfriendly countries.
https://www.bbc.com/future/article/20201112-the-green-hydrog...
Europe will need lots of those. It can very likely not be produced in Europe alone.
Even if they don't, 1/3 of the countries in the world are drenched in sunlight. The competition will make margins on these industries pretty pitiful.
But this is only possible because renewables represent only a small fraction of all power in most places. They can at peak generate a significant amount of power, but overall most produced TWh come from other sources.
If that overproduction can be channeled into e.g. hydrogen production which can be used for airline fuel or heating homes or for topping up the grid when it's not windy or sunny all the better.
> What do you suppose happens when, for example, Saudi Arabia can no longer feed itself? It just peacefully and gently starves to death?
First, I think you have to segregate between different kinds of fossil fuels.
Coal is the worst. From what I understand, it's mostly used in industry, power generation and heating. The main problem is: it's really dirty.
Natural gas probably has a much longer period of future usability. Tesla has shown quite readily that batteries are probably better than peaker plants for most cases. But for home heating and cooking, natural gas will probably have utility for quite some time. Yes - it does release greenhouse glasses, but the immediate health concerns in terms of the pm2.5 released by burning it are relatively minor.
Petroleum is in a similar boat. The main use for petroleum - automotive transport will probably be gradually phased out over the next 20 years (a reasonable approximation of how long used cars last), but it's used for more than just that. Plastic production and aviation fuel are probably two of the uses that will probably have some real longevity to them. In theory, naval propulsion is more amenable to electrification than aviation, but that'll be tricky to do economically; that is another area that petroleum could have a long useful life in.
In short, while there will be a dramatic drop in the consumption of fossil fuels, I have serious doubts that it will get anywhere close to zero in less than 40 years. I do think it is likely that coal burning will probably go away completely and both natural gas and petroleum use will decrease by over 90%. What that will do to the price is hard to say.
Over the last couple years / decades, ships went slower and slower on average as to save fuel (fuel became more expensive as well as environmental regulation on how much a ship may emit, which correlates to fuel intake).
So some people in the naval industry propose going back to using wind power, either via traditional sailing or more elaborate schemes (via electricity generation as an intermediary).
I've seen proposals to use wind power as an auxiliary source. I have yet to see serious proposals to convert to solely wind power.
Unless batteries get a lot lighter, ships are more likely to be powered by liquid hydrogen or ammonia, which are relatively straightforward to produce from renewable energy.
The hard thing is the sustained loads over weeks. It's not like a car where it gets rolling and then keeps rolling with some air resistance, you need to constantly force yourself through the water, even though it is efficient on a per ton basis.
Consumption on larger vessels can be 150-300 tons per day, say 40 MJ/kg of energy content. Say you only need 50% due to earlier thermal efficiency losses. For a 3 week range from China to the US west coast you still need 30 GWh, or 300 000 Tesla 100 kWh batteries. Which is actually quite similar to the battery capacity of all Teslas delivered in a year. Using 246 Wh/kg we get that the ship needs about 120 000 tons of batteries. A 400m container ship has 140 000 tons of usable capacity, i.e. just the steel excluding all cargo and provision, so it really doesn't add up yet. Need a magnitude improvement before it can start making sense, and this is a calculation without even margins or considering for example China to US East Coast.
It's just incredible how energy dense fossil fuels are. Shipping and aviation will probably end up as the last industries to go green, because they actually use the energy density.
Here's a larger ferry connecting Sweden and Denmark that was converted to hybrid with the goal to not use any diesels in regular service. Has 4 160 kWh battery capacity, one trip takes 20 minutes and uses 1 175 kWh.
https://www.youtube.com/watch?v=UyWcY4bTdl8
A company specializing in it is https://corvusenergy.com/
Any of the pacific islands could be built out with infrastructure to recharge them - afterall, sea-based wind turbines are one of the cheapest sources of power, while ontermittent, they are perfect for charging. You coupd even place something akin to an oil platform, but for charging ships.
However maybe something like hydrogen makes more sense.
This _more_ than makes up for the coal industry
Where and how it shown that?
I don't think so. But it currently uses petroleum/natural gas as feedstock.
https://foreignpolicy.com/2020/10/05/climate-geopolitics-pet...
Russia, OTOH, is the real the mother of all petrostates. Any problem you might imagine facing Saudi is tiny compared to the impact on Russia. They've already suffered so much as a result of the oil crash in the late 90's by becoming a mafia state.
It also means fresh air in the cities and much less noise.
Not a small point.
Smaller points would be less enviroment damage with oil drills, potential groundwater poisening or earthquakes with fracking, not oil tanker crashes and oceanic catastrophic events.
And about Saudia Arabia: I don't see, why "we" need to have a plan for them.
I see less money for various fanatic groups, if the arabic oil nations have to be a bit more conservative about money spending.
But what they could do (and some people there see this, too) is invest heavily in solarenergy, too and basically do solarfarming. And then use that energy to produce big time, or directly export the energy. Processed in form of hydrogen/methanol/.. or with high voltage direct current transmissiom directly to europe for example.
Those countries have had plenty of time to diversify their economies, but instead of funneling some of that oil money into uplifting their nation, it went into the pockets of the elite few and dick-waving contests of tall buildings and tacky tourist traps.
They chose to not even provide basic human freedoms to many of their citizens, or allowed women to pursue higher education and jobs in their lives beyond marriage. Fostering free thinking among their populace would have produced at least some individuals with enough ideas to prepare for a post-oil world.
I really doubt the rest of the world needs to be too concerned about them. They are pretty uniquely fucked and not that many people anyway.
Do they? Has doubling the work-force helped Western economies? I think that Elizabeth Warren & others have questioned that idea - i.e. that the wages were reduced to compensate for the increased labour supply - although even if not beneficial for individual families it could still be beneficial for the economy as a whole (and especially for the capitalist class).
Won't somebody think of the poor Saudi family?!
E.g. they're building the larges green ammonia plant in the world. You may not hear a lot about ammonia production and green ammonia, but this is really huge (not just because ammonia is important for fertilizers, but also because ammonia is a promising future shipping fuel).
But yeah, there are other oil countries where you barely see any such signs (e.g. Russia).
Saudi Arabia has a lot of sun and they have a lot of cash. If they invest it in producing electricity using solar they can still be an exporter of energy.
Secondly, most wars in the Arabic regions and all the meddling from the USA and other countries in this region is due to the oil. Without the rest of the world's need for oil we would get peace in this region.
I am happy to hear where I am behind the curve, but we don't yet have above-surface replacements for the whole of the petrochemical industry, outside of just synthetically producing our own light crude via thermal depolymerization.
It'll change the game to be sure, but there's a lot more going on than just burning gasoline.
As a Ukrainian, I’m very optimistic about the future of democracy in Russia that would have a chance once it stops being a big gas station. We then might see a better, open Russia, without military aggression and disinformation campaigns.
they know damn well and are already diversifying their portfolio; beside, even if we stop burning these fuels, fossil based carbon polymer will be with us for a while until vegetable alternative can be mass produce in matching qualities.
It’s really a rather imperialistic perspective tbh. To presume all of these countries need us to be making decisions for them, or that we would have any right to do so in the first place.
Sure, they can supply fossil fuels from a bounty more plentiful than other countries. But Asia does not lack lithium or silicon.
The Emirates will be largely fine since they have diversified a lot. They might need to cut a bit of spending but otherwise they'll keep as a wealthy nation. Qatar will also probably be fine. They have lots of money and built lots of infrastructure which they can open to the world.
Actually, I think post-oil, we'll finally have peace in the region. Nothing to fight over any more.
When it comes to the international scene I think it's pretty clear that the "haves" coming will have strong reasons to make sure that the "have-nots" aren't devolving into anarchy since that causes global problems. Whether they act intelligently isn't something I can comment on - but there are clear benefits to everyone involved.
Yeah, because we've done a great job of stewarding middle-east so far.
Even with the best intentions, it's not clear this " statebuilding" is even remotely realistic
Reducing their oil income will mean they are terrible states with less money to fund their terrible activities across the entire world.
If Saudi Arabia runs out of oil money, the only things that will happen is their population will shrink dramatically as the vast majority of the population, who are immigrants from the rest of the world go back to the far more populous countries they come from, and they will have less money to fund Islamic terrorism across the world, and especially in Asia, probably greatly reducing whatever efficacy these organizations currently have.
Yes, the ecological benefits shine. But we need to prepare for the sociopolitical and socioeconomic fallout. Given how prepared we've (not) been for addressing climate change, it's difficult to imagine we'll be prepared for the unintended consequences of renewables. What leader or elected official is going to be that messenger?
Why not? Equipment at that scale is complicated, and requires a lot of skill and experience to operate.
Not to mention responsibility. When you screw up, people die. Very likely including you.
Given the pay rate of oil workers, few are going to plan ahead and switch careers to something paying less. Keep in mind, that new pay drops further as the supply (of devs) increases.
In theory, I agree with you. However, the reality is inertia is a key force in life. My life. Your life. All our lives. And a magic wand - Poof! You're a software developer - has little proof of effectiveness to date under such circumstances. Yes, some success stories, but none the less limited. More software bootcamps are the answer? I'd like to see evidence of that.
We're not going to solve real problems with fantasy based on disconnected from reality. If we could this conversation would not be necessary.
First, you are correct, not everybody is just going to "learn to code", and that's not where I was going.
The industrial revolution replaced, to a large degree, muscles with machines, but still required human minds to work those machines.
This enabled an explosion of wealth across the entire world, giving everybody, in essence, access to the economic equivalence of an entire village's worth of labor. Goods which were once difficult to produce, and thus available only to the wealthy, became commonplace.
You see this in design trends: ornate designs were favored until mass manufacturing rendered them trivial to reproduce, and then the world embraced Futurism and Bauhaus.
In the information revolution, we are replacing minds with machines.
We don't need as many muscles, nor do we need as many minds, and where we seem to be headed is a sort of neo-feudalism, as those that control the machines have all the power, and our societies are ill adapted for all the muscles and minds that find themselves no longer economically necessary.
Nobody has a good answer to this. UBI, if implemented properly, may solve part of the problem, but human beings derive a great portion of their psychological nourishment from being valuable to their tribes.
Just as how not everybody is going to learn to code, not everybody wants to be an artist or a musician, either.
That's not even the ugliest problem.
Two: There tends to be a very common assumption amongst the technorati, of which I suppose I am a member, that "lesser" folks, those who learned a trade instead of getting a computer science degree, can't learn how to code.
I personally hate this attitude, and push back against it wherever I can. Yes, not everybody can be even a mediocre programmer; but, a great programmer can come from anywhere.
People keep talking about the cost of renewables, but in fact, money is the one renewable resource that we do have.
All of the above are majorly important questions. Maybe renewables aren't so renewable after all.
It's not on the way out. Fossil fuel use is increasing and projected to increase for the next 3 decades at least.
solar/wind/etc account for pretty much nothing today.
https://ourworldindata.org/grapher/global-energy-substitutio...
And the 2050 projection shows that petroleum and natural gas use will increase and that even coal will rebound by 2050.
https://www.eia.gov/todayinenergy/detail.php?id=41433
Also, that huge spike for "renewables" is mostly dams. Not wind or solar.
World coal consumption peaked in 2013, not sure why you believe it is coming back in 2050?!
Most of the new global energy production brought online is renewables, and has been for the last 4 years...The renewable fraction is also increasing. Not sure why you believe fossil fuel use will increase for the next 3 decades?!
Okay.
> World coal consumption peaked in 2013, not sure why you believe it is coming back in 2050?!
Because more than half the world's population has yet to industrialize.
> Most of the new global energy production brought online is renewables, and has been for the last 4 years..
Okay.
> Not sure why you believe fossil fuel use will increase for the next 3 decades?!
Firstly, because they are increasing. Secondly, more than half the world's population has yet to industrialize. Thirdly, tons of investment in natural gas.
Fossil fuel use is increasing in the US. Do you really think it'll slow in poor developing countries in south asia, south east asia and africa? I believe fossil fuel use will increase for the same reason EIA and every other major energy agency believes it will increase. Reality.
This was true when the projections were that renewables would be more expensive than fossil fuels, but “developed” countries would invest in CO2 reduction “for the greater good”.
However, as per the article, renewables (including batteries) are going to become significantly cheaper than fossil fuels.
Any reason to believe countries “looking to industrialize” will opt for the more expensive fossil fuel option?
Sure, it isn't cheaper or more economical. You are not going to industrialize with rooftop solar panels. Or wind farms which only produce electricity when its windy. For the same reason batteries or gas is cheaper than jet fuel but you can't power a plane on double a batteries.
There are major geopolitical "wars" happening right now over gas/oil pipelines.
https://www.bloomberg.com/news/articles/2020-11-29/nord-stre...
If "renewables" were cheaper or going to be cheaper, why would europe, russia, US, middle east, etc waste their time?
Or fight horrific wars over pipelines.
https://www.news.com.au/world/middle-east/is-the-fight-over-...
Here is the US oil production. Notice that huge spike the last 10 years?
https://en.wikipedia.org/wiki/File:US_Crude_Oil_Production_a...
Here is US gas production. Notice the huge spike the last 10 years?
https://en.wikipedia.org/wiki/File:US_Natural_Gas_Production...
The "renewables" are cheap and going to save the world are for naive children who don't know how the world works. The kind of naive people who think veganism is good for the environment/animals or that we can solve our landfill issues by flying garbage into the sun. Or the naive people who think renewables are actually good for the environment.
Renewable energy production is going to rise for sure, but much of that will be hydroelectric power via dams. Those cause their share of environmental problems.
If wealthy developed nations are opting for "more expensive fossil fuel", even to the point of going through costly wars, what do you think poor undeveloped countries are going to do? It's not rocket science.
The ony solution to our fossil fuel problem is a revolutionary breakthrough like fusion. That's it. Until then the world is going to burn fossil fuel for many more decades at the very least.
However, I think there also are reasons to believe things will be better:
1) the EIA forecasts linear growth of renewables, while its been behaving exponentially over the last 5-10 years. That gives me hope they’ve underestimated the long term growth rate. (It would be interesting to compare their older predictions vs actual)
2) nearly all of the energy consumption growth is non-OECD and will require newly built generation. If cost of renewables continues to drop, it might just be economic sense that pushes renewables over coal
3) at least on the EU side, fossil fuels are increasingly getting a negative connotation. On top of the financial comparison, I expect this could dampen new fossil growth as well.
The only way EIA will be off the mark is if we get something like fusion. Currently the major geopolitical issue is natural gas pipelines. Major nations wouldn't be fighting over gas pipelines if people believed fossil fuels were over.
> 1) the EIA forecasts linear growth of renewables, while its been behaving exponentially over the last 5-10 years.
And it still amounts to nothing. Solar/winds accounts for 1% of energy. And that's after 10 years of subsidies in the biggest economies around the world.
> 2) nearly all of the energy consumption growth is non-OECD and will require newly built generation. If cost of renewables continues to drop, it might just be economic sense that pushes renewables over coal
That will be all fossil fuels. The developing nations aren't going industrialize on solar/wind. Even developed nations can't do that.
> 3) at least on the EU side, fossil fuels are increasingly getting a negative connotation. On top of the financial comparison, I expect this could dampen new fossil growth as well.
Right... One of the biggest per capita producer of oil is norway.
https://en.wikipedia.org/wiki/List_of_countries_by_oil_produ...
The 2nd largest oil company in the world is a anglo-dutch company.
https://en.wikipedia.org/wiki/Royal_Dutch_Shell
And of course europe just invaded and took over libya for their oil. The EU is trying to take over venezuela for their oil. Etc.
The EU is one of the biggest direct consumers of fossil fuels ( and the largest consumer directly+indirectly ).
Fossil fuels aren't going anywhere. That's just physical reality. It's physics. Sure renewables may slow the rate of growth, but growing more slowly is still growing.
The only thing that will cause a decline in fossil fuels is economic collapse or a genuine scientific breakthrough like fusion energy.
I'll point out that the EIA has been off the mark wrt renewables in the past. For example: in 2010 [1], the EIA predicted renewables to grow by 30 Quadrillion BTUs in the next 20 years (2010-2030), that took only 8 years instead of 20. In their latest report they had to update that to a growth of 120 Quadrillion BTOs over the same timespan (2010-2030) (i.e. they were off by a factor of 4x).
As a thought experiment: The world doubled renewables in the last 10 years. If we maintain that CAGR until 2050, that would mean growth from ±100 Quadrillion BTU in 2020 to 200 in 2030, 400 in 2040 and 800 in 2050. If the totals from the EIA in 2050 are correct (±900 Qd BTU), then that would cover almost 90% of primary energy consumption globally.
Note: I realise this is oversimplified. We'd run into dampening factors (e.g. intermittency of solar/wind) far before we reach 90%. Nonetheless, based on the current growth I'm happy to argue that the EIA is underestimating growth potential of renewables.
> Right... One of the biggest per capita producer of oil is norway. > The 2nd largest oil company in the world is a anglo-dutch company.
The present doesn't have to describe the future:
- Shell is still huge company. Yet, had you invested in Shell 5 years ago, your stocks would be 33% lower today (-47% for Exxon). Had you invested in some of the established renewable energy players e.g. Orsted, Vesta, or Iberdrola, you'd be up between 75 and 350%.
- Same in the US: Nextera (US Wind and Solar player) is currently valued higher than BP, Total or Shell. ($147 bln), and doubled market cap in the last 5 years.
The Dutch version of the FT ran an article yesterday on how investors are increasingly wary of investing in fossil fuels, and moving more into renewables. They made the comparison to how it suddenly became undesirable to invest in e.g. Tobacco. [2]
[1]: http://large.stanford.edu/courses/2010/ph240/riley2/docs/EIA...
[2]: https://fd.nl/ondernemen/1366175/beleggers-draaien-van-fossi...
Now, instead of rooting for that change, we can think about the actual consequences. It's inevitable; fossil fuels are on the way out. What does that mean, besides lower carbon?
It means that countries which rely on fossil fuels for their economy, are going to see the same kind of crushing economic decline that, say, the UK coal industry has.
What do you suppose happens when, for example, Saudi Arabia can no longer feed itself? It just peacefully and gently starves to death?
To be clear, I'm not saying we should somehow try to prevent fossil fuels exiting the scene. The change in energy sources to lower-carbon ones is an old one, and there's no way to stop it, nor should we try. Wood gave way to coal and then oil and then natural gas, and the process will continue with zero-carbon sources like photovoltaics. That's a bullet that's already been fired, and there's no way to stuff it back inside the barrel of the gun.
But, do we really have a plan for the consequences, not only in Saudi Arabia but also every other nation that's dependent on oil? Hint: we do not.