Citing climate change, Obama rejects Keystone XL Oil Pipeline construction plan

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Job killer! This one action could cost dozens of jobs in the famine-relief industry and refugee resettlement.


This is good - and unexpected - news!

I suppose this is the kind of thing that the fracking boom ennables us to do.

It’s a bit of a shell game, but domestic natural gas is probably better than oil pipelines in most cases, and renewable energy sources, which this helps the demand for, would be better than that!

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I have been won over by Gail Tverberg’s analyses of the economy and peak oil (, so I’m actually a little worried about this.

The short story is that while I am very concerned about climate change, I am even more concerned about total civilizational breakdown when the power grid goes down. That the power grid will go down within the next few decades is a near certainty – not because of high energy prices, but because high energy prices cause recessions, which cause deflationary spirals, which cause commodity prices including energy to drop to a point where oil companies can no longer profitably drill and refine.

We’re already there, in fact. Oil companies are ceasing to be profitable and are cutting costs everywhere they can. Fracking firms are mostly in the red and are only staying in business because banks have been far more lenient with them than they typically are with homeowners on a mortgage.

So if the pipeline could have kept energy prices down at all, it would have been a good thing. Renewables are always high cost*, so they increase the average price of energy which brings us closer to the recession from which we won’t be able to recover. Then billions die either through violence or starvation because our society creates a large proportion of its food calories directly from fossil fuels.

On the upside, the collapse of civilization would slow AGW/climate change. But I don’t think the price is right.

*Before you cite the price per watt of solar, please bear in mind I’m talking about system-wide costs. Solar is intermittent, but grids can’t be intermittent. Fossil fuel-powered generators are needed to even out the contribution from intermittent sources, so that extra capacity needs to be written into the cost of renewables at which point renewables stop being cost effective.


There’s some interesting solutions to that problem coming out in the near-term.

I’m also not entirely convinced that high energy prices are as inevitably tethered to recessions and grid failures. That implies there’s no flexibility in the demand side of the market, and there definitely is - folks use a lot of energy today in part because it’s cheap to use a lot of energy today.


I left out the bit about how real wages haven’t risen since the 70’s. That really cuts into the demand side of the equation.

When energy prices go up, people’s expenditures on gas and food go up. Their fixed costs (e.g. servicing debts) stay constant. Their wages haven’t gone up since the 70’s. What do they do? Cut back on discretionary spending. They don’t buy TVs and cars, so electronics and auto manufacturers lay off workers. Deflationary spiral.

High prices are not tied to grid failures. High prices would be great – it would let us use high-priced renewables instead of fossil fuels.

The problem is that since there has been no growth in wages, the economy cannot support high energy prices. This leads to a deflationary spiral which causes low energy prices – too low to profitably produce energy. (This is when price < cost.)

When energy and fossil fuel companies can no longer pay their employees – that is what’s inevitably tied to grid failures.

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I can hear the weeping GOP from my desk, it’s pathetic and sad.

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This doesn’t have much to do with energy prices, though. This is true today, and we’ve got very low energy prices!

Not as inevitable as all that - oil companies are not necessary for a functioning grid. There’s a lot of stages of infrastructure to go in between there, and it’s entirely possible to transition to other fuels. Germany’s done quite well themselves doing it, and this is not a horrible starting point to expand from.

ONE solar or wind farm is intermittent. Over a large region - connected by that grid you mention - alternative power becomes more reliable. Some areas have favorable weather while others don’t.

Beyond that, as an example, Wisconsin has made a deal to exchange power with Manitoba:

When the wind is blowing on Wisconsin’s wind farms, it will send power to Manitoba. Manitoba will cut the flow through its hydro dams, storing more energy behind them. When the wind stops in Wisconsin, Manitoba will increase the flow through its dams and send power to Wisconsin.


Yes it does.

Seriously, I’m not going to sit here and argue with you about this. Look at a graph of energy prices over time with US recessions overlaid. You’ll see a very clear and apparently causal pattern.

We’ve got very low energy prices over the last year because of ZIRP, the fracking bubble, and Saudi Arabia and Russia’s response to the fracking bubble. We produced a glut. But look at a graph of energy prices through 2008! They soared sky high, and then juuuuuuust about the time that Lehman Bros went broke…they fell into a giant hole.

That’s exactly the pattern I’m talking about.

You are vastly underestimating what is involved in maintaining an electric grid. To keep a grid functional, you need to keep your supply balanced with your loads. Intermittent supplies make this incredibly complicated, and absolutely require fossil fuel-powered reactors that you can bring up at night or in low wind and then shut down again during the day or good wind conditions.

Moreoever, if we can’t afford to maintain the infrastructure we have now, then we certainly can’t afford to overhaul it for a new untested energy regime.


Had Harper won the election, this would mean that the Energy East pipeline is a go. With Trudeau, it means that Energy East won’t happen until oils prices go back up.

The math is beyond me but I can’t help but think that no matter what choice is made, oil will continue to be extracted at the same rate and the oil companies, without a pipeline, will continue to ship via truck and rail. I’m just not sure what harms the environment more - a pipeline or trucks and rail burning fossil fuel to move fossil fuel.

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That’s great, but you’ve really just made the situation even more complicated and failure prone because now you have to balance thousands of intermittent sources against each other.

Maintaining the grid wasn’t easy when everything was fossil fuel or nuclear. All these intermittent renewables makes that problem harder.

And I haven’t even mentioned a really serious problem that none of y’all are addressing: right now, we cannot produce intermittent renewables without huge expenditures of fossil fuels (either to smelt aluminum and iron, or to make solar cells, etc. – there are probably thousands of dependencies from renewables to fossil fuels).

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The grid is already designed to handle the unexpected loss of a power source and intermittent loads.

If it gets worse, we can add some 1970s-era computer technology to handle it.

Correlation, causation, these things are not the same things. Recessions are complex, multi-faceted things, reducing them to a single variable is overly simplistic and verging on the dogmatic.

Oh, I’m intimately aware. Your flaw seems to be in presuming a fragility that just isn’t true. If every oil company went completely out of business overnight, we’d have a problem, but the slow death of much of the oil industry (along with a ramping up of various other energy solutions) is certainly something that can be done.

The grid doesn’t handle unexpected loss of power sources gracefully. It requires huge teams of engineers constantly monitoring huge sections of the grid to even out that kind of thing. It is probably one of the highest costs of maintaining the grid in the first place.

It can handle intermittent loads because it has to – the grid wouldn’t be nearly as useful if you could only use your appliances at specific times of day. But same deal. Huge teams of engineers constantly monitoring the grid and constantly reconfiguring the ins and outs.

I will bet you the teams of engineers are using the latest computer technology and still are only barely keeping things together.


This is a really frustrating thing to say to me at this point in the discussion. I can continue to support my case, but not if you’re just going to try to shut me down by labeling me “dogmatic”. I have good reasons for making the claims I am making.

Nowhere did I say or imply that correlation or causation are the same things. Nowhere did I say or imply that recessions are not complex or multi-faceted things. However, even if both of those things are true, it does not imply that one variable won’t have a huge effect on the occurrence of recessions. And if you bothered to look at a graph like I asked you to, I think you’d find it hard to escape the conclusion that energy prices and recessions are very, very tightly coupled.

In addition, there are a great many theoretical and empirical reasons for thinking the relationship is causal rather than merely correlative.

But GFY if you’re going to assume I’m just being dogmatic. My opinion is based on having studied the issue. Furthermore, it has changed in the last few months as I’ve done more study. That is the opposite of dogmatism. Dogmatism is more like accusing someone else of dogmatism because you don’t like the conclusions they’ve come to.

That’s where we differ. You think it can be done. I think it cannot – for a set of specific reasons that I have started to outline above.

Again, it all comes down to what prices the market can bear. If the market can deal with high energy prices then we are fine, and you are right, and we can replace oil with higher-cost energy sources. But if the market can’t deal with high energy prices (say, because real wages have been stagnant for decades), then we cannot ramp up because there will be no economic growth to support the borrowing/debt/credit needed for R&D of the new energy sources.

Also, you guys seem to assume energy is infinitely substitutable, but it is simply not. Switching from oil to gasified coal requires a huge overhaul of infrastructure, which again means huge amounts of borrowing/debt/credit that the current anemic economic growth won’t be able to support.

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Here. A graph of economic growth against growth in energy supply:

Tell me again about how economic growth and energy use have nothing to do with each other?

Doesn’t prove it’s causal. But here’s a similar graph on a shorter timescale:

Which is the leading indicator? What does that imply about possible causal relationships?

Edit: more graphs


I’ve lived through supply shortages multiple times, it’s not really a big deal. For example, a large interconnect went down as a result of wildfire reducing capacity by 30% and undersupplying the city by 10%. The immediate solution was load shedding from large consumers, but as this was a multiweek outage, people reduced demand through reduction in airconditioners. As a further result, sales of PV home systems increased notably. Next time the problem will be lessened.

In general, the grid is symmetric from a load and supply point of view. The same techniques that deal with load jumps from kettles after the football match, blackouts over suburbs, or aircons after work also deal with supply changes from gusty wind and cloudy weather.

It’ll work out. Not so sure about climate change.


I’ve long suspected that the Dec '07 beginning of the Great Recession was caused by a chain of events that kicked into motion with gas prices rising from a “pricey” but manageable and not unheard-of $2.16 in January 2007 to a record high of $3.22 four months later. Gas prices stayed above $3.00 for 7 weeks.

If you can remember back, the news stories quickly turned from “Can you believe how expensive gas is? We interview angry motorists” to “falling sales at Walmart as customers can’t afford gas anymore”. By July, the sustained gas prices were causing people to have to choose between paying their mortgage or being able to drive to work. The housing stock in the US shows the effect clearly - in January there were 7.2 months’ supply of houses on the market, by the end of the summer, it was up to 9.2 months as the first wave of foreclosures hit the market. It would dip slightly in October before skyrocketing, along with gas prices, to even higher records the next summer (11.3 months and $4.11).

That said, I disagree with your premise of the grid needing to be dependent upon fossil fuels for base load generation. Small-scale nuclear is a possibility down the line, and there are current renewable base-load sources (which may or may not be totally fucked by climate change) like hydro or geothermal.