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Enjoy the good times while you can because when the economy BLOWS UP this next time, there is no plan B. Sure, we could see massive monetary printing by Central Banks to continue the madness a bit longer after the market crashes, but this won’t be a long-term solution. Rather, the U.S. and global economies will contract to a level we have never experienced before. We are most certainly in unchartered territory.

Before I get into my analysis and the reasons we are heading towards the Seneca Cliff, I wanted to share the following information. I haven’t posted much material over the past week because I decided to spend a bit of quality time with family. Furthermore, a good friend of mine past away which put me in a state of reflection. This close friend was also very knowledgeable about our current economic predicament and was a big believer in owning gold and silver. So, it was a quite a shame to lose someone close by who I could chat with about these issues.

While some of my family members know about my work, I don’t really discuss it with them. If they ever have a question, I will try to answer it, but I found out years ago that it was a waste of time to try and impose my knowledge upon them. Which is the very reason I started my SRSrocco Report website… LOL. So, now I have a venue to get my analysis out to the public. I don’t care about reaching everyone, but rather to provide important information to those who are OPEN to it.

…click on the above link to read the rest of the article…

The Seneca Cliff Explained: a Three Dimensional Collapse Overview Model

December 9, 2017

The Seneca Cliff Explained: a Three Dimensional Collapse Overview Model

A Three Dimensional Collapse Overview Model

In this post, Geoffrey Chia illustrates one of the fundamental characteristics of the “Seneca Effect”, also known as “collapse,” the fact that it occurs in networked systems dominated by feedback interactions. This is a qualitative interpretation of collapse that complements the more quantitative models that I report in my book “The Seneca Effect.” (U.B.)

The Limits to Growth was published in 1972 by a group of world class scientists using the best mathematical computer modelling available at the time. It projected the future collapse of global industrial civilisation in the 21^st century if humanity did not curb its population, consumption and pollution. It was pilloried by many “infinite growth on a finite planet” economists over the decades.

However, updated data inputs and modern computer modelling in recent years (particularly by Dr Graham Turner of the CSIRO in 2008 and 2014) showed that we are in reality closely tracking the standard model of the LtG, with industrial collapse and mass die-off due sooner rather than later. The future is now.

The LtG looked only at 5 parameters, with global warming being a mere subset of pollution. Dramatic acceleration of ice melt and unprecedented, increasingly frequent, extreme weather events over the past two decades clearly demonstrate that global warming is progressing far faster and far worse than anyone could possibly have imagined back in the 70s. Global warming certainly deserves a separate category for consideration on its own, quite apart from the other manifestations of pollution.

The LtG did not include a specific category looking at the human dynamics of finance, economics and political manoeuvrings, which was fair enough, because it is impossible to mathematically model such capricious irrationality.

…click on the above link to read the rest of the article…

The Soft Belly of The Oil Industry: an Upcoming Seneca Collapse?

November 20, 2017

The Soft Belly of The Oil Industry: an Upcoming Seneca Collapse?

Ugo Bardi explains his idea of an impending “Seneca Collapse” of the world’s oil industry at the session on climate change of the meeting of the Club of Rome in Vienna, on 10 Nov 2017. What follows are not the exact words said, but a text which maintains the gist of this brief comment. It was focused on the concept that the oil industry has a “soft belly” in the fact that it produces mainly fuel for engines used for transportation. If this market were reduced by the introduction of electric vehicles and other transportation innovations, the whole industry could collapse. That would be a good thing for the earth’s ecosystem and for humankind in general.

Dear colleagues, we are having an interesting discussion on how to stop climate change and I think I could add some thoughts of mine on the basis of my recent work that I published in the form of the book titled “The Seneca Effect“.

The problem we have been discussing is how to limit emissions and we saw that it needs to be done fast and even drastically if we want to avoid the worse effects of climate change. Obviously, it is not easy. (image from Skeptical Science)

Most of what has been said today was based on a “top-down” approach, which I may also describe as supply-limiting. That is, we are speaking of a carbon tax, of emission limits, and the like; measures that governments should take in order to limit the production of fossil fuels. I don’t have to tell you that it is an effort that has been ongoing for several years and yet emissions keep growing. It doesn’t seem to work

So, can we take the opposite approach? That is, look at the demand side in a “bottom-up” approach?

…click on the above link to read the rest of the article…

The Seneca Paradox: If mineral depletion is a problem, how is it that we don’t see its effects?

November 8, 2017

The Seneca Paradox: If mineral depletion is a problem, how is it that we don’t see its effects?

The recent workshop held in Oxford, “Strategic Minerals in a Low Carbon Future” saw a very interesting debate on resource availability in which two opposite views emerged: one says that the gradual depletion of natural resources is a serious problem, already affecting the economy, the other that depletion is irrelevant or, at best, a marginal problem that can be solved by technological progress. The debate is ongoing, but the apparent lack of relevance of depletion in the current economic situation may be just an illusion generated by the “Seneca Effect.” It is an insidious kind of effect that hides future risks behind an apparently safe and robust growth.

The story of the Club of Rome starts with the issue of natural resources, mineral ones in particular. In the 1960s, it had become clear to the Club’s founder, Aurelio Peccei, that the world’s resources were not infinite. The question was how that was to affect humankind. It was the origin of the first and the best-known report to the Club of Rome, “The Limits to Growth,” published in 1972.

The 1972 report already provided answers to the question of the relevance of depletion. It turned out that resource scarcity would limit the growth of the world’s economy and, eventually, lead to a decline. This conclusion was often misunderstood as meaning that humankind would soon “run out” of oil, gas, or some other resource; but that was never stated in the report and it never was the point. The problem is not, and never was, running out of anything. It is that the gradual depletion of mineral ores makes extraction more expensive and that’s a burden on society that we cannot ignore.
…click on the above link to read the rest of the article…

A Seneca Cliff for the Web as we know it?

November 1, 2017

A Seneca Cliff for the Web as we know it?

We can’t ignore the evidence any longer. The “Web”, intended as a constellation of independent information providers is dying. It is going through a Seneca Cliff of its own, being replaced by a “Trinet”, controlled by the three giant companies, Google, Amazon, and Facebook.

I have been noticing it with the stats for “Cassandra’s Legacy”. You can see how the decline in the number of contacts has been steady over the past year. Here are the stats:

We don’t yet see a Seneca Cliff, that is a rapid drop in the audience (don’t look at the drop at the end of the graph; it is just because the data are for the current month). I think it is mainly because I have been trying to contrast the decline by publishing more posts, but that has not been sufficient to change the trend. Here are the data for another blog of mine, “Chimeras”

In this case, the blog used to be visited by students looking for text to cut and paste for their term papers on mythology. They are not coming anymore; evidently, they found other sources of information. Or maybe the search engines don’t lead them to my blog anymore. Hard to say, but it is a fact.

So, what’s happening? As always, things change and, in our times, tend to change fast. Many of us can remember the “age of mass media,” now obsolete as steam engines and mechanical calculators. It looks incredible that there existed a time when everyone was exposed to the same information, provided under strict control by the government. In the Soviet Union, it was under control of the Communist Party.

…click on the above link to read the rest of the article…

Biofuels: Can They Save the Airlines from the Seneca Collapse?

October 31, 2017

Biofuels: Can They Save the Airlines from the Seneca Collapse?

Painting planes green is much easier than making them run on biofuels.

“Can the airlines be run on biofuels?” As it often happens, this simple question doesn’t have a simple answer. First of all, it is a question that makes sense only in terms of a “sustainable” plane, that is one that doesn’t run on fossil fuels. That’s a major technological problem. Whereas cars can be made to run on battery-powered electric motors, the power/weight ratio of the combination is simply unacceptable for a passenger plane that could provide a performance comparable to that of current jet planes. Hydrogen planes have been proposed, but they are a nightmare for several reasons and it is unlikely that they could become practical in the short and medium term future.

That would leave only biofuels as a “sustainable” fuel that could power the current fleet of jet planes. Indeed, a small number of tests have been carried out showing that it is possible to fly planes using biofuels. But can it be done on the large scale needed to get rid of fossil fuels?

The first problem is whether biofuels are truly carbon-free. Most likely, the current fuels made from crops are not; in the sense that they involve extensive use of fossil fuels for their manufacturing. In many cases, however, even the current generation (“1st generation”) of biofuels can provide a significant saving in the use of fossil fuels for the same amount of energy produced. This is the case, in particular, for ethanol produced from sugarcane in Brazil. But there is a more fundamental question is: what would be the consequences of ramping up biofuel production to the levels needed to power the current airline fleet?
…click on the above link to read the rest of the article…

The Seneca Cliff as an Effect of Bureaucracy

September 27, 2017

The Seneca Cliff as an Effect of Bureaucracy

The idea of the “Seneca Cliff” is that a certain entity, from a company to an empire, tends to fall rapidly when it is subjected to a dearth of resources and, at the same time, affected by pollution. More than once I noted that there are many forms of pollution; in the model, the term indicated any kind of phenomenon that tends to grow at the expenses of the capital stock of a society. Bureaucracy clearly satisfies the definition and an excess of it may be a major cause of collapse. Here, Miguel Martinez discusses the concept on the basis of his experience in Italy, a country that seems to be especially plagued by overbureaucracy. Martinez notes several interesting phenomena, including the fact that the decline in economic resources reinforces also the problems created by excessive bureaucracy generating a near complete standstill in everything that can be overcome only by acting illegally, which creates other problems as well. So, it seems that the only cure for over bureaucracy is the Seneca Collapse!

Bureaucracy and the Seneca Cliff

Ugo Bardi’s blog is always a great mental stimulant. His Seneca Curve made me think of another parallel curve. Imagine two lines: the first has to do directly with resources. The other has to do with the rules which govern the resources and how they are used.Rules, laws, regulations, contracts, terms, provisions, standards, obligations, whatever…

Whoever issues them, the ultimate enforcement comes from some entity related to the state; and enforcement can be quite painful, implying the end of a career, severe financial damage, heavy expenses for lawyers, gaol or at least the stress of years of worrying about all of this, whatever the outcome.

Let’s start with the line of resources. Basically meaning the relationship among available resources, extraction costs and waste.

…click on the above link to read the rest of the article…

The Dutch love affair with natural gas: A cautionary tale for the United States?

March 5, 2017

The Dutch love affair with natural gas: A cautionary tale for the United States?

The story sounds familiar. For decades oil and natural gas drilling have been proceeding and creating prosperity for those involved. At some point significant earthquakes occur in areas where they were formerly very rare or nonexistent. Those quakes are linked to oil and gas drilling and production. The industry denies the link.

The quakes continue, get worse and finally get strong enough to do damage.

To those living in the United States, this reads like stories coming out of the fracking boom in states that include Oklahoma, Texas, Ohio, Kansas and Arkansas. To those living in Europe, it’s the story coming out of The Netherlands, home to the Groningen Gas Field, one of the largest natural gas finds ever.

The Groningen field has been both a blessing and a curse for the Dutch. Since its discovery in 1959 the Dutch have reaped huge financial benefits from having their own secure and abundant source of natural gas. Beyond that, the country has until recently been a major exporter of natural gas to its European neighbors.

But the field has also proven to be a drag on the rest of the economy, inflicting what has been dubbed the “Dutch disease.” In short, the Dutch disease refers to negative effects that a huge natural resource find can visit upon a society. These include a decline in other sectors of the economy and a strong currency which makes exports less affordable to foreign buyers. The moniker “Dutch disease” results from the fact that The Netherlands was the first place such effects were studied in detail.

What has caught the Dutch by surprise–and may someday soon catch America by surprise–is the speed with which its decades-long reliance on a large initial endowment of natural gas has turned into a liability.

…click on the above link to read the rest of the article…

Another Example of a Seneca Cliff

October 16, 2016

Another Example of a Seneca Cliff

The results of a Google Trend search for “Friendster”, an old social network. It is a nearly perfect “Seneca Shape.” Ruin is rapid, indeed!

“Friendster” was a social network that, in many ways, pre-dated Facebook. Friendster collapsed rapidly, starting in around 2009, providing us with an impressive example of a “Seneca Shape“, a curve where decline is much faster than growth, or, as Seneca the philosopher said long ago, “ruin is rapid”.

The demise of Friendster has been studied in at least two recent papers. One by Garcia et al, (2013) “Social Resilience of online communities” and another by Yu et al., (2016) titled “System crash as dynamics of complex networks” These papers interpret the collapse in terms of the dynamic evolution of a network, whereas, earlier on, I had proposed a model where this specific shape could be derived from system dynamics. Basically, there must be more than one way to skin a platypus: both the studies cited are based on collective feedback effects, which is the crucial factor that makes collapses occur. So, network theory is more detailed, system dynamics one is more aggregated, but we are describing the same phenomenon, although from different viewpoints.

In both cases, anyway, we find that ruin is rapid. As long as it occurs to an obsolete social service, it is not a big problem. But if it were to occur to something massive and vital for civilization, such as the oil industry, then we could see something like this…. ouch…….

The end of the “population problem”? Another Seneca cliff in our future

June 23, 2016

The end of the “population problem”? Another Seneca cliff in our future

Image from “National Geographic”

If the demographic projections by the United Nations will turn out to be true, the world population should reach over 11 billion people by 2100. Some think that it will be a disaster, others see it as a good thing as it would bring more economic growth. But is it really possible to reach such numbers? Can we really think that women would be so stupid to continue making children even in the midst of the crisis caused by declining natural resources and worsening ecosystem disruption? (unless the Pope himself were to tell them to stop)?

Yet, some models tell us the human population could keep increasing even after the collapse of the world’s economy. There exists something called the “demographic transition” and it is a historical observation that may be extrapolated into the future. The data show a sort of “U-shaped fertility curve” that makes the poor and the very rich to be more fertile than those who are in the middle. When applied to the scenarios of “The Limits to Growth” of 1972, this idea generated a curious behavior, with the impoverishment of the population causing an increase in the birthrate that causes the population to continue increasing for a few decades after the collapse.

But, as it is always the case, extrapolating past trends into the future is extremely dangerous. In particular, it is at least improbable that the post-collapse world will be like running the same movie in reverse. The demographic transition has been observed to occur in growing economies, it won’t simply change sign and reverse itself in contracting economies. To see how it works we can look at the demographic trends in Russia.

…click on the above link to read the rest of the article…

EIA’s Annual Energy Outlook and the Seneca Cliff

May 19, 2016

EIA’s Annual Energy Outlook and the Seneca Cliff

The scenario above shows an Oil Shock Model with a URR of 3600 Gb and EIA data from 1970 to 2015 and the Annual Energy Outlook (AEO) 2016 early release reference projection from 2016 to 2040. The oil shock model was originally developed by Webhubbletelescope and presented at his blog Mobjectivist and in a free book The Oil Conundrum.

The World extraction rate from producing reserves must rise to 15% in 2040 to accomplish this for this “high” URR scenario. This high scenario is 100 Gb lower than my earlier high scenario because I reduced my estimate of extra heavy oil URR (API gravity<10) to 500 Gb. The annual decline rate rises to 5% from 2043 to 2047 creating a “Seneca cliff”, the decline rate is reduced to 2% by 2060.

blogchart/

The scenario presented above uses BP’s Energy Outlook 2035, published in Feb 2016. This outlook does not extend to 2040, maximum output is 88 Mb/d in 2035 at the end of the scenario. This scenario is still optimistic, but is more reasonable than the EIA AEO 2016. Extraction rates rise to 10.6% and the annual decline rate rises to 2.5% in 2042 and is reduced to under 2% by 2053.

A problem with the BP Outlook is the expectation that US light tight oil (LTO) output will rise to 7.5 Mb/d from 2030 to 2035, the BP forecast for US LTO from 2013, 2014, 2015, and 2016 is shown below.

blogchart/

A more realistic forecast would be a peak of 6 Mb/d in 2022 with output declining to 3 Mb/d by 2035. The scenario below shows roughly what World output might be with this more realistic, but still optimistic scenario. There is a plateau in output at 85 Mb/d from 2025 to 2030 with annual decline rate peaking at 2.1% in 2044 and then falling under 2% per year from 2048 to 2070.

blogchart/

…click on the above link to read the rest of the article…

The Physics of Energy and the Economy

February 8, 2016

The Physics of Energy and the Economy

I approach the subject of the physics of energy and the economy with some trepidation. An economy seems to be a dissipative system, but what does this really mean? There are not many people who understand dissipative systems, and very few who understand how an economy operates. The combination leads to an awfully lot of false beliefs about the energy needs of an economy.

The primary issue at hand is that, as a dissipative system, every economy has its own energy needs, just as every forest has its own energy needs (in terms of sunlight) and every plant and animal has its own energy needs, in one form or another. A hurricane is another dissipative system. It needs the energy it gets from warm ocean water. If it moves across land, it will soon weaken and die.

There is a fairly narrow range of acceptable energy levels–an animal without enough food weakens and is more likely to be eaten by a predator or to succumb to a disease. A plant without enough sunlight is likely to weaken and die.

In fact, the effects of not having enough energy flows may spread more widely than the individual plant or animal that weakens and dies. If the reason a plant dies is because the plant is part of a forest that over time has grown so dense that the plants in the understory cannot get enough light, then there may be a bigger problem. The dying plant material may accumulate to the point of encouraging forest fires. Such a forest fire may burn a fairly wide area of the forest. Thus, the indirect result may be to put to an end a portion of the forest ecosystem itself.

…click on the above link to read the rest of the article…

Climate change: can the Seneca effect save us?

April 26, 2015

Climate change: can the Seneca effect save us?

Nothing we do (or try to do) seems to be able to stop carbon dioxide from accumulating in the atmosphere. And, as a consequence, nothing seems to be able to stop climate change. With the situation getting worse and worse (see here for an example), we are hoping that some kind of international agreement can be reached to limit emissions. But, after many attempts and many failures, can we really expect that next time – miraculously – we could succeed?

Another line of thought, instead, has that depletion will save us. After all, if we run out of oil (and of fossil fuels in general) then we’ll have to stop emitting greenhouse gases. Won’t that solve the problem? In principle, yes, but is it going to happen?

The gist of the debate on the future of fossil fuel production is that, despite the theoretically abundant resources, the production rate is strongly affected by diminishing economic returns generated by depletion. This factor forces the production curve to follow a “bell shaped”, or “Hubbert,” curve that peaks and starts declining much before the resource runs out, physically. In practice, most studies that take into account the diminishing economic returns of productionarrive to the conclusion that the IPCC scenarios often overestimate the amount of fossil carbon that can be burned (see a recent review by Hook et al.). From this, some have arrived to the optimistic conclusion that peak oil will save us from climate change (see this post of mine). But that’s way too simplistic.

…click on the above link to read the rest of the article…

Seneca’s pyramids: how fast did the Mayan civilization fall?

January 14, 2015

Seneca’s pyramids: how fast did the Mayan civilization fall?

Monument building cycle of the Mayan civilization. From “Sylvanus G. Morley and George W. Brainerd, The Ancient Maya, Third Edition (Stanford University Press, 1956), page 66.”. Courtesy of Diego Mantilla.

Once you give a name to a phenomenon, you can focus your attention on it and learn more and more about it. So, the “Seneca Cliff” idea turns out to be a fruitful one. It tells us that, in several cases, the cycle of exploitation of a natural resource follows a forward skewed curve, where decline is much faster than growth. This is consistent with what the Roman philosopher Lucius Annaeus Seneca wrote: “increases are of sluggish growth, but the way to ruin is rapid.” With some mathematical tricks, the result is the following curve:

This curve describes the behavior of several complex systems, including entire civilizations which experienced an abrupt collapse after a long period of relatively slow growth. In my first post on the seneca cliff, I already discussed the collapse of the Mayan Civilization (*)

…click on the above link to read the rest of the article…

RESOURCE CRISIS: Seneca cliffs of the third kind: how technological progress can generate a faster collapse

December 16, 2014

RESOURCE CRISIS: Seneca cliffs of the third kind: how technological progress can generate a faster collapse.

The image above (from Wikipedia) shows the collapse of the North Atlantic cod stocks. The fishery disaster of the early 1990s was the result of a combination of greed, incompetence, and government support for both. Unfortunately, it is just one of the many examples of how human beings tend to worsen the problems they try to solve. The philosopher Lucius Anneus Seneca had understood this problem already some 2000 years ago, when he said, “It would be some consolation for the feebleness of our selves and our works if all things should perish as slowly as they come into being; but as it is, increases are of sluggish growth, but the way to ruin is rapid.”

The collapse of the North Atlantic cod fishery industry gives us a good example of the abrupt collapse in the production of resources – even resources which are theoretically renewable. The shape of the production curve landings shows some similarity with the “Seneca curve“, a general term that I proposed to apply to all cases in which we observe a rapid decline of the production of a non renewable, or slowly renewable, resource. Here is the typical shape of the Seneca Curve:

The similarity with the cod landings curve is only approximate, but clearly, in both cases we have a very rapid decline after a slow growth that, for the cod fishery, had lasted for more than a century. What caused this behavior?

…click on the above link to read the rest of the article…

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