Civilization goes over the net energy cliff in 2022 — just 6 years away

[ Below are excerpts from 3 posts by Louis Arnoux (see the full versions here) and a 1-hour video explaining the Hill’s group report here .   Basically this explains the Net Energy Cliff and why it drops off so quickly rather than being a bell curve.

Oil extraction costs have been shooting up and can only become higher as nearly all of the ‘easy oil’ has been found. Once more energy is used than gained, exploration and production end.

For the average barrel of oil this may happen in 2022 — just 6 years away

So by 2022 half the oil industry is likely to be out of business. Oil production won’t end — there will still be “above average” barrels produced, but dramatically less and less as we fall over the energy cliff, with the tail end around 2095.

  • The rapid end of the Oil Age began in 2012 and will be over within some 10 years. By 2022 the number of service stations in the US will have shrunk by 75%.
  • The critical parameter to consider is not the million barrels produced per day, but the net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally.
  • We are in an unprecedented situation.  As stressed by Tainter, no previous civilization has ever managed to survive the kind of predicament we are in.  However, the people living in those civilizations were mostly rural and had a safety net, in that their energy source was 100% solar, photosynthesis for food, fiber and timber – they always could keep going even though it may have been under harsh conditions.  We no longer have such a safety net; our entire food systems are almost completely dependent on the net energy from oil that is in the process of dropping to the floor and our food supply systems cannot cope without it.

The Hills Group has models that predicted the price of oil going down before it began in 2014, and several other models all arrive at the same conclusion that the end of the age of oil for most of us ends around 2030 — though really 2022 since 2030 assumes total energy efficiency. If you need a kick in the pants to change your life and location, I can’t imagine a more important document to read (ignore the math, the methods and results in the charts are clear). And besides, it’s good brain exercise to prevent Alzheimer’s)

The Hill’s Group. March 1, 2015. Depletion : A determination for the world’s petroleum reserve. A reserve status report  # HC3-433 Version 2

Or for an easier read look at this short summary of Dr. Alister Hamilton’s talk “Brexit, Oil and the World Economy” here, and view the hour video here  on YouTube. 

Alice Friedemann  author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report ]

Louis Arnoux. July 12, 2016. Some reflections on the Twilight of the Oil Age – part I.


Since at least the end of 2014 there has been increasing confusions about oil prices, whether so-called “Peak Oil” has already happened, or will happen in the future and when, matters of EROI (or EROEI) values for current energy sources and for alternatives, climate change and the phantasmatic 2oC warming limit, and concerning the feasibility of shifting rapidly to renewables or sustainable sources of energy supply. Overall, it matters a great deal whether a reasonable time horizon to act is say 50 years, i.e. in the main the troubles that we are contemplating are taking place way past 2050, or if we are already in deep trouble and the timeframe to try and extricate ourselves is some 10 years. Answering this kind of question requires paying close attention to system boundary definitions and scrutinizing all matters taken for granted.

It took over 50 years for climatologists to be heard and for politicians to reach the Paris Agreement re climate change (CC) at the close of the COP21, late last year. As you no doubt can gather from the title, I am of the view that we do not have 50 years to agonise about oil. In the three sections of this post I will first briefly take stock of where we are oil wise; I will then consider how this situation calls upon us to do our utter best to extricate ourselves from the current prevailing confusion and think straight about our predicament; and in the third part I will offer a few considerations concerning the near term, the next ten years – how to approach it, what cannot work and what may work, and the urgency to act, without delay.

Part 1 – Alice looking down the end of the barrel

In his recent post, Ugo contrasted the views of the Doomstead Diner‘s readers  with that of energy experts regarding the feasibility of replacing fossil fuels within a reasonable timeframe. In my view, the Doomstead’s guests had a much better sense of the situation than the “experts” in Ugo’s survey. To be blunt, along current prevailing lines we are not going to make it. I am not just referring here to “business-as-usual” (BAU) parties holding for dear life onto fossil fuels and nukes. I also include all current efforts at implementing alternatives and combating CC. Here is why.

The energy cost of system replacement

What a great number of energy technology specialists miss are the challenges of whole system replacement – moving from fossil-based to 100% sustainable over a given period of time. Of course, the prior question concerns the necessity or otherwise of whole system replacement. For those of us who have already concluded that this is an urgent necessity, if only due to Climate Change, no need to discuss this matter here. For those who maybe are not yet clear on this point, hopefully, the matter will become a lot clearer a few paragraphs down.

So coming back for now to whole system replacement, the first challenge most remain blind to is the huge energy cost of whole system replacement in terms of both the 1st principle of thermodynamics (i.e. how much net energy is required to develop and deploy a whole alternative system, while the old one has to be kept going and be progressively replaced) and also concerning the 2nd principle (i.e. the waste heat involved in the whole system substitution process). The implied issues are to figure out first how much total fossil primary energy is required by such a shift, in addition to what is required for ongoing BAU business and until such a time when any sustainable alternative has managed to become self-sustaining, and second to ascertain where this additional fossil energy may come from.

The end of the Oil Age is now

If we had a whole century ahead of us to transition, it would be comparatively easy. Unfortunately, we no longer have that leisure since the second key challenge is the remaining timeframe for whole system replacement. What most people miss is that the rapid end of the Oil Age began in 2012 and will be over within some 10 years. To the best of my knowledge, the most advanced material in this matter is the thermodynamic analysis of the oil industry taken as a whole system (OI) produced by The Hill’s Group (THG) over the last two years or so (

THG are seasoned US oil industry engineers led by B.W. Hill. I find its analysis elegant and rock hard. For example, one of its outputs concerns oil prices. Over a 56 year time period, its correlation factor with historical data is 0.995. In consequence, they began to warn in 2013 about the oil price crash that began late 2014 (see: In what follows I rely on THG’s report and my own work.

Three figures summarize the situation we are in rather well, in my view.

Figure 1 – End Game


For purely thermodynamic reasons net energy delivered to the globalized industrial world (GIW) per barrel by the oil industry (OI) is rapidly trending to zero. By net energy we mean here what the OI delivers to the GIW, essentially in the form of transport fuels, after the energy used by the OI for exploration, production, transport, refining and end products delivery have been deducted.

However, things break down well before reaching “ground zero”; i.e. within 10 years the OI as we know it will have disintegrated. Actually, a number of analysts from entities like Deloitte or Chatham House, reading financial tea leaves, are progressively reaching the same kind of conclusions.[1]

The Oil Age is finishing now, not in a slow, smooth, long slide down from “Peak Oil”, but in a rapid fizzling out of net energy. This is now combining with things like climate change and the global debt issues to generate what I call a “Perfect Storm” big enough to bring the GIW to its knees.

In an Alice world

Under the prevailing paradigm, there is no known way to exit from the Perfect Storm within the emerging time constraint (available time has shrunk by one order of magnitude, from 100 to 10 years). This is where I think that Doomstead Diner’s readers are guessing right. Many readers are no doubt familiar with the so-called “Red Queen” effect illustrated in Figure 2 – to have to run fast to stay put, and even faster to be able to move forward. The OI is fully caught in it.

Figure 2 – Stuck on a one track to nowhere


The top part of Figure 2 highlights that, due to declining net energy per barrel, the OI has to keep running faster and faster (i.e. pumping oil) to keep supplying the GIW with the net energy it requires. What most people miss is that due to that same rapid decline of net energy/barrel towards nil, the OI can’t keep “running” for much more than a few years – e.g. B.W. Hill considers that within 10 years the number of petrol stations in the US will have shrunk by 75%

What people also neglect, depicted in the bottom part of Figure 2, is what I call the inverse Red Queen effect (1/RQ). Building an alternative whole system takes energy that to a large extent initially has to come from the present fossil-fueled system. If the shift takes place too rapidly, the net energy drain literally kills the existing BAU system.[2] The shorter the transition time the harder is the 1/RQ. 

I estimate the limit growth rate for the alternative whole system at 7% growth per year. So growth rates for solar and wind, well above 20% and in some cases over 60%, are not viable globally. However, the kind of growth rates, in the order of 35%, that are required for a very short transition under the Perfect Storm time frame are even less viable. As the last part of Figure 2 suggests, there is a way out by focusing on current huge energy waste, but presently this is the road not taken.

On the way to Olduvai

In my view, given that nearly everything within the GIW requires transport and that said transport is still about 94% dependent on oil-derived fuels, the rapid fizzling out of net energy from oil must be considered as the defining event of the 21st century – it governs the operation of all other energy sources, as well as that of the entire GIW. Therefore the critical parameter to consider is not that absolute amount of oil mined (as even “peakoilers” do), such as Million barrels produced per year, but net energy from oil per head of global population, since when this gets too close to nil we must expect complete social breakdown, globally.

The overall picture, as depicted ion Figure 3, is that of the “Mother of all Senecas” (to use Ugo’s expression).  It presents net energy from oil per head of global population.[3] The Olduvai Gorge as a backdrop is a wink to Dr. Richard Duncan’s scenario (he used barrels of oil equivalent which was a mistake) and to stress the dire consequences if we do reach the “bottom of the Gorge” – a kind of “postmodern hunter-gatherer” fate.

Oil has been in use for thousands of year, in limited fashion at locations where it seeped naturally or where small well could be dug out by hand. Oil sands began to be mined industrially in 1745 at Merkwiller-Pechelbronn in north east France (the birthplace of Schlumberger). From such very modest beginnings to a peak in the early 1970s, the climb took over 220 years. The fall back to nil will have taken about 50 years.

The amazing economic growth in the three post WWII decades was actually fueled by a 321% growth in net energy/head. The peak of 18GJ/head in around 1973, was actually in the order of some 40GJ/head for those who actually has access to oil at the time, i.e. the industrialized fraction of the global population.

Figure 3 – The “Mother of all Senecas”

arnoux-peak-net-end-user-energy-1970sIn 2012 the OI began to use more energy per barrel in its own processes (from oil exploration to transport fuel deliveries at the petrol stations) than what it delivers net to the GIW. We are now down below 4GJ/head and dropping fast.

This is what is now actually driving the oil prices: since 2014, through millions of trade transactions (functioning as the “invisible hand” of the markets), the reality is progressively filtering that the GIW can only afford oil prices in proportion to the amount of GDP growth that can be generated by a rapidly shrinking net energy delivered per barrel, which is no longer much. Soon it will be nil. So oil prices are actually on a downtrend towards nil.

To cope, the OI has been cannibalizing itself since 2012. This trend is accelerating but cannot continue for very long. Even mainstream analysts have begun to recognize that the OI is no longer replenishing its reserves. We have entered fire-sale times (as shown by the recent announcements by Saudi Arabia (whose main field, Ghawar, is probably over 90% depleted) to sell part of Aramco and make a rapid shift out of a near 100% dependence on oil and towards “solar”.

Given what Figure 1 to 3 depict, it should be obvious that resuming growth along BAU lines is no longer doable, and that incurring ever more debt that can never be reimbursed is no longer a solution, not even short-term

Part 2 – Inquiring into the appropriateness of the question

Let’s acknowledge it, the situation we are in, is complex. As many commentators like to state, there is still plenty of oil, coal, and gas left “in the ground”. Since 2014, debates have been raging, concerning the assumed “oil glut”, concerning how low oil prices may go down, how high prices may rebound as demand possibly picks up and the “glut” vanishes, and, in the face of all this, what may or may not happen regarding “renewables”. However, my Part 1 data have indicated that most of what’s left in terms of fossil fuels is likely to stay where it is, underground  because this is what thermodynamics dictates.

We can now venture a little bit further if we keep firmly in mind that the globalized industrial world (GIW), and by extension all of us, do not “live” on fossil resources but on net energy delivered by the global energy system; and if we also keep in mind that, in this matter, oil-derived transport fuels are the key since, without them, none of the other fossil and nuclear resources can be mobilized and the GIW itself can’t function.

In my experience, most often, when faced with such a broad spectrum of conflicting views, especially involving matters pertaining to physics and the social sciences, the lack of agreement is indicative that the core questions are not well formulated. Physicist David Bohm liked to stress: “In scientific inquiries, a crucial step is to ask the right question. Indeed each question contains presuppositions, largely implicit. If these presuppositions are wrong or confused, the question itself is wrong, in the sense that to try to answer it has no meaning. One has thus to inquire into the appropriateness of the question.”

Here it is important, in terms of system analysis, to differentiate between the global energy industry (GEI) and the GIW. The GEI bears the brunt of thermodynamics directly, and within the GEI, the oil industry (OI) is key since, as seen in Part 1, it is the first to reach the thermodynamics limit of resource extraction and, since it conditions the viability of the GEI’s other components – in their present state and within the remaining timeframe, they can’t survive the OI’s eventual collapse. On the other hand, the GIW is impacted by thermodynamic decline with a lag, in the main because it is buffered by debt – so that by the time the impact of the thermodynamic collapse of the OI becomes undeniable it’s too late to do much about it.

At the micro level, debt can be “good” – e.g. a company borrows to expand and then reimburses its debt, etc… At the macro level, it can be, and has now become, lethal, as the global debt can no longer be reimbursed (I estimate the energy equivalent of current global debt, from states, businesses, and households to be in the order of some 10,700 EJ, while current world energy use is in the order of 554 EJ; it is no longer doable to “mind the gap”).

Crude oil prices are dropping to the floor

Figure 4 – The radar signal for an Oil Pearl Harbor


In brief, the GIW has been living on ever growing total debt since around the time net energy from oil per head peaked in the early 1970s. The 2007-08 crisis was a warning shot. Since 2012, we have entered the last stage of this sad saga – when the OI began to use more energy within its own production chains than what it delivers to the GIW. From this point onwards retrieving the present financial fiat system is no longer doable.

This 2012 point marked a radical shift in price drivers.[4] Figure 4 combines the analyses of TGH (The Hills Group) and mine. In late 2014 I saw the beginning of the oil price crash as a signal of a radar screen. Being well aware that EROIs for oil and gas combined had already passed below the minimum threshold of 10:1, I understood that this crash was different from previous ones: prices were on their way right down to the floor. I then realized what TGH had anticipated this trend months earlier, that their analysis was robust and was being corroborated by the market there and then.

Until 2012, the determining price driver was the total energy cost incurred by the OI. Until then the GIW could more or less happily sustain the translation of these costs into high oil prices, around or above $100/bbl. This is no longer the case. Since 2012, the determining oil price driver is what the GIW can afford to pay in order to still be able to generate residual GDP growth (on borrowed time) under the sway of a Red Queen that is running out of thermodynamic “breath”. I call the process we are in an “Oil Pearl Harbor”, taking place in a kind of eerie slow motion. This is no longer retrievable. Within roughly ten years the oil industry as we know it will have disintegrated. The GIW is presently defenseless in the face of this threat.

The Oil Fizzle Dragon-King

Figure 5 – The “Energy Hand”


To illustrate how the GEI works I often compare its energy flows to the five fingers of the one hand: all are necessary and all are linked (Figure 5). Under the Red Queen, the GEI is progressively loosing its “knuckles” one by one like a kind of unseen leprosy – unseen yet because of the debt “veil” that hides the progressive losses and more fundamentally because of what I refer to at the bottom of Figure 5, namely were are in what I call Oil Fizzle Dragon-King.

A Dragon-King (DK) is a statistical concept developed by Didier Sornette of the Swiss Federal Institute of Technology, Zurich, and a few others to differentiate high probability and high impact processes and events from Black Swans, i.e. events that are of low probability and high impact. I call it the Oil Fizzle because what is triggering it is the very rapid fizzling out of net energy per barrel. It is a DK, i.e. a high probability, high impact unexpected process, purely because almost none of the decision-making elites is familiar with the thermodynamics of complex systems operating far from equilibrium; nor are they familiar with the actual social workings of the societies they live in. Researchers have been warning about the high likelihood of something like this at least since the works of the Meadows in the early 1970s.[5]

The Oil Fizzle DK is the result of the interaction between this net energy fizzling out, climate change, debt and the full spectrum of ecological and social issues that have been mounting since the early 1970s – as I noted on Figure 1, the Oil Fizzle DK is in the process of whipping up a “Perfect Storm” strong enough to bring the GIW to its knees. The Oil Pearl Harbor marks the Oil Fizzle DK getting into full swing.

To explain this further, with reference to Figure 5, oil represents some 33% of global primary energy use (BP data). Fossil fuels represented some 86% of total primary energy in 2014. However, coal, oil, and gas are not like three boxes neatly set side by side from which energy is supplied magically, as most economists would have it.

In the real world (i.e. outside the world economists live in), energy supply chains form networks, rather complex ones.  For example, it takes electricity to produce many products derived from oil, coal, and gas, while electricity is generated substantially from coal and gas, and so on.  More to the point, as noted earlier, because 94% of all transport is oil-based, oil stands at the root of the entire, complex, globalized set of energy networks.  Coal mining, transport, processing, and use depend substantially on oil-derived transport fuels; ditto for gas.[6]   The same applies to nuclear plants. So the thermodynamic collapse of the oil industry, that is now underway, not only is likely to be completed within some 10 years but is also in the process of triggering a falling domino effect (aka an avalanche, or in systemic terms, a self-organising criticality, a SOC).

Presently, and for the foreseeable future, we do not have substitutes for oil derived transport fuels that can be deployed within the required time frame and that would be affordable to the GIW. In other words, the GIW is falling into a thermodynamic trap, right now. As B. W. Hill recently noted, “The world is now spending $2.3 trillion per year more to produce oil than what is received when it is sold. The world is now losing a great deal of money to maintain its dependence on oil.”

In the longer run, the end effect of the Oil Fizzle DK is likely to be an abrupt decline of GHG emissions.

However, the danger I see is that meanwhile the GEI, and most notably the OI, is not going to just “curl up and die”. I think we are in a “die hard” situation. Since 2012, we are already seeing what I call a Big Mad Scramble (BMS) by a wide range of GEI actors that try to keep going while they still can, flying blind into the ground. The eventual outcome is hard to avoid with a GEI operating with only about 12% energy efficiency, i.e. some 88% wasteful current primary energy use. The GIW’s agony is likely to result in a big burst of GHG emissions while net energy fizzles out. The high danger is that the old quip will eventuate on a planetary scale: “the operation was successful but the patient died”… Hence my call for “inquiring into the appropriateness of the question” and for systemic thinking. We are in deep trouble. We can’t afford to get this wrong.

Part 3 – Standing slightly past the edge of the cliff

At least since the early 1970s and the Meadows’ work, we have known that the globalized industrial world (GIW) is on a self-destructive path, aka BAU (Business as usual). We now know that we are living through the tail end of this process, the end of the Oil Age, precipitating what I have called the Oil Fizzle Dragon-King, Seneca style, that is, after a slow, relatively smooth climb (aka “economic growth”) we are at the beginning of an abrupt fall down a thermodynamic cliff.

The chief issue is whole system change. This means thinking in whole systems terms where the thermodynamics of complex systems operating far from equilibrium is the key.  Understanding the situation requires moving repeatedly from the particulars, the details, to the whole system, improving our understanding of the whole and from this going back to the particulars, improving our understanding of them, going back to considering the whole, and so on.

Whole system replacement, i.e. going 100% renewable, requires a huge energy embodiment that is not feasible.  Having the “Energy Hand” in mind (Figure 5), where does this required energy come from in a context of sharp decline of net energy from oil and the Red Queen effect, and concerning renewable, inverse Red Queen/cannibalization effects?  

Solely considering the performances and cost of this or that alternative energy technology won’t suffice.  Short of addressing the complexities of whole system replacement, the situation we are in is some kind of “Apocalypse now”.  The chief challenge I see is thus how to shift safely, with minimal loss of life (substantial loss of life there will be; this has become unavoidable), from fossil-BAU (and nuclear) …

We currently have some 17 TW of power installed globally (mostly fossil with some nuclear), i.e. about 2.3kW/head, but with some 4 billion people who at best are grossly energy stressed, many who have no access to electricity at all and only limited transport, in a context of an efficiency of global energy systems in the order of 12%.[9]

Going “green” and surviving it (i.e. avoiding the inverse Red Queen effect) means increasing our Energy Hand from 17 TW to 50 TW (as a rough order of magnitude), with efficiencies shifting from 12% to over 80%.

It should be clear that under this predicament something would have to give, i.e. some of us would get even more energy stressed and die, or as the Chinese and Indians have been doing use much more of remaining fossil resources but then this would accelerate global warming and many other nasties. 

Whole system replacement (on a “do or die” mode) requires considering whole production chain networks from mining the ores, through making the metals, cement, etc., to making the machines, to using them to produce the stuff we require to go 100% sustainable. Given the very short time window constraint, we can’t afford to get it wrong in terms of how to possibly getting out of there – we have hardly enough time to have one go at it.

Remaining time frame

We no longer have 35 years, (say up to around 2050).  We have at best 10 years, not to debate and agonize but to actually do, with the next three years being key.  The thermodynamics on this, summarized in Part 1, is rock hard.  This time-frame, combined with the Oil Pearl Harbor challenge and the inverse Red Queen constraints, means in my view that none of the current “doings” renewable-wise can cut it.

Weak links

Notwithstanding its apparent power, the GIW is in fact extremely fragile.  It embodies a number of very weak links in its networks.  I have highlighted the oil issue, an issue that defines the overall time frame for dealing with “Apocalypse now”.  In addition to that and to climate change, there are a few other challenges that have been variously put forward by a range of researchers in recent years, such as fresh water availability, massive soil degradation, trace pollutants, degradation of life in oceans (about 99% of life is aquatic), staple food threats (e.g. black stem rust, wheat blast, ground level ozone, etc.), loss of biodiversity and 6th mass extinction, all the way to Joseph Tainter’s work concerning the links between energy flows, power (in TW), complexity and overshoot to collapse.[11]  

These weak links are currently in the process of breaking or are about to break, the breaks forming a self-reinforcing avalanche (SOC) or Perfect Storm.  All have the same key time-frame of about 10 years as an order of magnitude for acting.  All require a fair “whack” of energy as a prerequisite to handling them (the “whack” being a flexible and elastic unit of something substantial that usually one does not have).

Cognitive failure

The “Brexit” saga is perhaps the latest large-scale demonstration of cognitive failure in a very long series.  That is to say, the failure on the part of decision-making elites to make use of available knowledge, experience, and expertise to tackle effectively challenges within the time-frame required to do so.

Cognitive failure is probably most blatant, but largely remaining unseen, concerning energy, the Oil Fizzle DK and matters of energy returns on energy investments (EROI or EROEI).  What we can observe is a triple failure of BAU, but also of most current “green” alternatives (Figure 7): (1) the BAU development trajectory since the 1950s failed; (2) there has been a failure to take heed of over 40 years of warnings; and (3) there has been a failure to develop viable alternatives.

Figure 8 – The necessity of very high EROIs

  • With an EROI of 1.1 :  1   at the production well we can pump oil out and look at it…that’s all – there is no spare energy to do anything else with it
  • 1.2 : 1    We can refine crude oil into diesel fuel…and that’s all
  • 1.3 : 1    We can dispatch the diesel to a service station…and that’s all
  • 3 : 1        We can run a truck with it as well as enough spare energy to build and maintain the truck, roads, and bridges…and that’s all
  • 5 : 1        We can put something in the truck and deliver it…and that’s all
  • 8 : 1        We can provide a living to the oil field worker, the refinery worker, the truck driver, and the farmer…and that’s all
  • 10 : 1      You may have minimal health care, some education…and that’s all
  • 20 : 1      You may have the basic set of consumer items such as refrigerators, stoves, radios, TV, a small car…and that’s all
  • 30 : 1      Or higher – you can have a prosperous lifestyle and the spare energy to deal with ecological issues and to invest in a secure energy future

This is expanded from similar attempts by Jessica Lambert et al., to perhaps highlights what sliding down the thermodynamic cliff entails.  Charles Hall has shown that a production EROI of 10:1 corresponds roughly to an end-user EROI of 3.3:1 and is the bare minimum for an industrial society to function.[15]  In sociological terms, for 10:1 think of North Korea.  As shown on Figure 7, currently I know of no alternative, either unconventional fossils based, nuclear or “green” technologies with production EROIs (i.e. equivalent to the well head EROI for oil) above 20:1; most remain below 10:1.  I do think it feasible to go back above 30:1, in 100% sustainable fashion, but not along prevalent modes of technology development, social organization, and decision-making.

We are in an unprecedented situation.  As stressed by Tainter, no previous civilization has ever managed to survive the kind of predicament we are in.  However, the people living in those civilizations were mostly rural and had a safety net, in that their energy source was 100% solar, photosynthesis for food, fiber and timber – they always could keep going even though it may have been under harsh conditions.  We no longer have such a safety net; our entire food systems are almost completely dependent on the net energy from oil that is in the process of dropping to the floor and our food supply systems cannot cope without it.

Arnoux responds to readers comments:

It is important to not confuse EROI or EROEI at the well head and for the whole system up to the end-users. The Hill’s Group people have shown that the EROIE as defined by them passed below the critical viability level of 10:1 around 2010 and that along current dynamics by circa 2030 it will be about 6.89:1, by which time no net energy per barrel will reach end-users (assuming there is still an oil industry at this point, which a number of us consider most unlikely, at least not the oil industry as we presently know it). Net energy here means what is available to end-users typically to go from A to B, the energy lost as waste heat (2nd principle) and the energy used by the oil industry having been fully deducted – as such it cannot be directly linked in reverse to evaluate an EROI.

We are considering the whole system, from oil exploration to end-users. The matter is that relative to the early stages in the development of the oil industry, the total energy costs of producing the energy reaching end-users has been increasing steadily barrel after barrel and we are now getting close to a point when no significant energy will reach end-users. We expect that the industry will breakdown well before this critical point is reached.

The idea of collapse remains taboo in numerous circles and understandably is rather unpalatable. However, increasingly the awareness of the dangers appears to be progressing rapidly, all the way notably among very wealthy people who now constitute a booming market segment for underground luxury bunkers where, as the marketing goes, they could survive 5 years without going back to the surface in case of heavy turmoil…

In energy matters inequality is prevalent. Some regions are likely to retain access to residual net energy from oil longer than others and to the detriment of others, and this isn’t shaping up as a nice and smooth affair. Prof Micheal Klare has spoken of a global “30 Year War” (Klare, Michael, 2011, “The New Thirty Years War”, in European Energy Review, 5 September). However, war requires a lot of oil-based energy, so war is likely to accelerate thermodynamic collapse dynamics. For example, in the Middle East a number of researchers have noted the contribution of years of drought and displacement of about 1 million farmers to Syrian cities that has led to the present tragedy. However, few realize that another factor contributing to turmoil in the region is the competition between two sets of pipelines projects and related political and military interests, one focused on Iran and the other on KSA to link those areas to the Mediterranean. It is not possible to read through a crystal ball at the regional level. It is likely that if mistakes can be made and atrocities committed, they will take place… All in all, however, I tend to agree with B. W. Hill that globally the tail end of the Oil Fizzle process is most unlikely to extend beyond 2030.

You ask “how are they to be convinced to abandon their investments prior to catastrophic collapse?” It’s clear to me that they are not going to be convinced and there is no point in trying to and above all not time left to do so. I have come to think that those who cling to BAU for dear life do not have much prospects to last long simply because they are no longer within a viable thermodynamic space. On the other hand there are millions currently innovating and doing their utter best to stay or come back within such a space. They do so mostly flying blind, mostly without enquiring into the appropriateness of the questions they ask, which makes their life a lot harder and riskier. As a result many will end up outside the viable space and vanish, however, given the numbers, I think that statistically quite a number will manage to live within that space and evolve new ways, probably enough for one or more new kind(s) of civilization(s).

For over a century the ratio of gold to oil has remained in a narrow range of 1g to 6g of gold per barrel of sweet crude – gold being an age old monetary means that goes by weight and is not subject to inflation and other vagaries it can be used as a fixed metric not amenable to much manipulations (as fiat currencies and price indices are). This ratio is presently close to 1.04g/bbl. However, as we have seen, the GIW does not “live” on crude but on net energy from crude, essentially in the form of transport fuels. Currently the net energy that reaches end-users is about 16% of the gross energy in an average barrel of sweet crude (it was about 70% in 1920). This gives a present shadow price of about US$277/bbl, a highly unpalatable figure for the GIW’s operations (or 6.5g of gold/bbl). Of course, as net energy keeps dropping, a time will come, very soon, when after a burst the shadow price also drops to the floor (a value of x times zero equals zero). Put in other words, gold and oil have begun to diverge since 2014. All currencies have been dropping against gold since 1971. The stable gold-oil relationship is breaking down because the fundamental was not the crude barrel but the amount of net energy able to “power growth”; since 2012 this is now fizzling out.

I am saying that when 1 barrel of sweet crude is traded at US$44 (actually as I write it’s at about $43 and a bit), the GIW has access to only 16% of the energy it contains, so the net financial impact for the GIW as a whole is yes, $277/bbl equivalent. The GIW can’t make money with the full barrel, only the 16% residual, so it all happens as if it was attempting to “grow” at a basic cost of $277/bbl, which these days is quite a challenge. Even adjusting for inflation, at the time of the 1978-79 crisis (based on BP inflation adjusted price data) with some 56% net energy available to end-users, the shadow price was around US$188/bbl equivalent, and back then the situation was dire. In New Zealand we had carless days… So now at $277/bbl? The main difference I see is that now the GIW lives fully on debt, with central banks “printing money” like there is no tomorrow, which is probably correct – there is no tomorrow for the GIW in this fashion. We are at the stage where thermodynamics comes back home to roost.

In practice, no one but businesses from the oil industry buys oil. End-users buy transport fuels, plastics, etc… Now, in the main transport fuels are used to generate economic activity. No one can generate as much economic activity per barrel now, with only 16% net energy that can be used to do so, as compared to say 1920 when about 70% net energy was available. So after quite a bit of speculation up and down by traders who by and large have not a clue about what is going on, progressively the price of crude adjusts in proportion to the economic activity that can be generated downstream. The globalised industrial world (GIW), taken as a whole, cannot afford to pay more for its fuel than the amount of economic “growth” that it can generate with it, not for a long time any way. The consequence, however, is that the GIW decelerates in proportion, which is what we are observing.



[1] See for example, Stevens, Paul, 2016, International Oil Companies: The Death of the Old Business Model, Energy, Research Paper, Energy, Environment and Resources, Chatham House; England, John W., 2016, Short of capital? Risk of underinvestment in oil and gas is amplified by competing cash priorities, Deloitte Center for Energy Solutions, Deloitte LLP. The Bank of England recently commented: “The embattled crude oil and natural gas industry worldwide has slashed capital spending to a point below the minimum required levels to replace reserves — replacement of proved reserves in the past constituted about 80 percent of the industry’s spending; however, the industry has slashed its capital spending by a total of about 50 percent in 2015 and 2016. According to Deloitte’s new study {referred to above], this underinvestment will quickly deplete the future availability of reserves and production.”

[2] This effect is also referred to as “cannibalizing”. See for example, J. M. Pearce, 2009, Optimising Greenhouse Gas Mitigation Strategies to Suppress Energy Cannibalism, 2nd Climate Change Technology Conference, May 12-15, Hamilton, Ontario, Canada. However, in the oil industry and more generally the mining industry, cannibalism usually refers to what companies do when there are reaching the end of exploitable reserves and cut down on maintenance, sell assets at a discount or acquires some from companies gone bankrupt, in order to try and survive a bit longer. Presently there is much asset disposal going on in the Shale Oil and Gas patches, ditto among majors, Lukoil, BP, Shell, Chevron, etc….  Between spending cuts and assets disposal amounts involved are in the $1 to $2 trillions.

[3] This graph is based on THG’s net energy data, BP oil production data and UN demographic data.

[4] As THG have conclusively clarified, see

[5] The Meadows’ original work has been amply corroborated over the ensuing decades. See for example, Donella Meadows, Jorgen Randers, and Dennis Meadows, 2004, A Synopsis: Limits to Growth: The 30-Year Update, The Donella Meadows Institute; Turner, Graham, 2008, A Comparison of the Limits to Growth with Thirty Years of Reality, Socio-Economics and the Environment in Discussion, CSIRO Working Paper Series 2008-09; Hall, Charles A. S. and Day, John W, Jr, 2009, “Revisiting the Limits to Growth After Peak Oil” in American Scientist, May-June; Vuuren, D.P. van and Faber, Albert, 2009, Growing within Limits, A Report to the Global Assembly 2009 of the Club of Rome, Netherlands Environmental Assessment Agency; and Turner, Graham, M., 2014, Is Global Collapse Imminent? An Updated Comparison of The Limits to Growth with Historical Data, MSSI Research Paper No. 4, Melbourne Sustainable Society Institute, The University of Melbourne.

[6] Although there is a drive to use more and more liquefied natural gas for gas tankers and ordinary ship fuel bunkering.

[7] Dellingpole, James, 2013, “The dirty secret of Britain’s power madness: Polluting diesel generators built in secret by foreign companies to kick in when there’s no wind for turbines – and other insane but true eco-scandals”, in The Daily Mail, 13 July.

[8] As another example, Axel Kleidon has shown that extracting energy from wind (as well as from waves and ocean currents) on any large scale would have the effect of reducing overall free energy usable by humankind (free in the thermodynamic sense, due to the high entropy levels that these technologies do generate, and as opposed to the direct harvesting of solar energy through photosynthesis, photovoltaics and thermal solar, that instead do increase the total free energy available to humankind) – see Kleidon, Axel, 2012, How does the earth system generate and maintain thermodynamic disequilibrium and what does it imply for the future of the planet?, Max Planck Institute for Biogeochemistry, published in Philosophical Transaction of the Royal Society A,  370, doi: 10.1098/rsta.2011.0316.

[9] E.g. Murray and King, Nature, 2012.

[10] This label is a wink to the Sea People who got embroiled in the abrupt end of the Bronze Age some 3,200 years ago, in that same part of the world currently bitterly embroiled in atrocious fighting and terrorism, aka MENA.

[11] Tainter, Joseph, 1988, The Collapse of Complex Societies, Cambridge University Press; Tainter, Joseph A., 1996, “Complexity, Problem Solving, and Sustainable Societies”, in Getting Down to Earth: Practical Applications of Ecological Economics, Island Press, and Tainter, Joseph A. and Crumley, Carole, “Climate, Complexity and Problem Solving in the Roman Empire” (p. 63), in Costanza, Robert, Graumlich, Lisa J., and Steffen, Will, editors, 2007, Sustainability or Collapse, an Integrated History and Future of People on Earth, The MIT Press, Cambridge, Massachusetts and London, U.K., in cooperation with Dahlem University Press.

[12] See for example Armour, Kyle, 2016, “Climate sensitivity on the rise”,, 27 June.

[13] For a good overview, see Spratt, David, 2016, Climate Reality Check, March.

[14] For example, Jacobson, Mark M. and Delucchi, Mark A., 2009, “A path to Sustainability by 2030”, in Scientific American, November.

[15] Hall, Charles A. S. and Klitgaard, Kent A., 2012, Energy and the Wealth of Nations, Springer; Hall, Charles A. S., Balogh, Stephen, and Murphy, David J. R., 2009, “What is the Minimum EROI that a Sustainable Society Must Have?” in Energies, 2, 25-47; doi:10.3390/en20100025. See also Murphy, David J., 2014, “The implications of the declining energy return on investment of oil production” in Philosophical Transaction of the Royal Society A, 372: 20130126,

[16] Joseph Tainter, 2011, “Energy, complexity, and sustainability: A historical perspective”, Environmental Innovation and Societal Transitions, Elsevier

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13 Responses to Civilization goes over the net energy cliff in 2022 — just 6 years away

  1. Survivalist says:

    I’m not sure that figure 1 is correct. The blue line should be decreased from 1920 to 2015. Car engines are more efficient after all. And the yellow line for 2015 indicates an EROEI of approx 1:5. Perhaps the marginal barrels are this but not all barrels. I’m not a big fan of the Etp model.

    • energyskeptic says:

      You may be right, you may be wrong. At, there is a long-running thread where readers criticize the Hills group (which Arnoux is explaining in this post). Hill and sometimes other readers reply to the critique. You can see the latest thread at The Etp Model, Q & A at:

      If Arnoux correctly translated their theory to this chart then you could ask Bill Hill if it’s correct at that forum.

      I think the Hills group sees the crisis starting when EROI is about 7:1, not sure which yellow line is 1:5

      Engines may be more efficient, but exponential growth of the human population and energy/resource consumption, plus Jevon’s paradox that when engines are more efficient, people drive more miles so the blue line may not need to be redrawn.

      But I’m not as enchanted with the Hills group as I was at first, after asking scientists with better math skills than I have what they thought. Though half thought this was a good model… My other issue is that so many have also come to similar conclusions that are far better stated. For example, Nate Hagens came to similar conclusions back in 2007 — back-of-the-envelope though, not as perfected but much easier to understand than the Hills group: “Peak Oil” – Why Smart Folks Disagree – Part II. The Oil Drum at

      On the other hand, since the Hills group model is TESTABLE, and Bill Hill has made predictions on it, including that things tank in 2017, we’ll be able to see if they got it right soon!

  2. Shawn says:

    Very sobering analogy. Interesting times await us.

  3. Rod Cloutier says:

    If there are more intelligent extraterrestrials out there now would be the time to intervene. We are a baby civilization which is about to crawl out on to the expressway, while holding a loaded carbon gun to our heads. We need outside help to bring our baby civilization back to the nursery and out of harms way.

    What are you waiting for?

  4. Jim Whyte says:

    An excellent posting, and a very easy to read update of what the Club of Rome referred to in 1968 as The Predicament of Mankind. With only the primitive information and models available at the time, the report they produced was presented in a wee book by Dennis Meadows & Co published back in 1972 and called THE LIMITS TO GROWTH. In terms of timing, it was never claimed to be accurate to the third decimal point but much that was prophesied back then is now coming to pass.
    In the forward to the book, a speech by the then Secretary General to the United Nations, U Thant in 1969 is quoted which is worth repeating today.
    “I do not wish to seem over dramatic, but I can only conclude from the information that is available to me as Secretary-General of the United Nations, that the Members of the United Nations have perhaps ten years left to subordinate their ancient quarrels and launch a global partnership to curb the arms race, to improve the human environment to defuse the population explosion and to supply the required momentum to development efforts. If such a global partnership is not forged within the next decade, then I very much fear that the problems I have mentioned will have reached such staggering proportions that they will be beyond our capacity to control
    That was back in 1969, but sadly, U Thant did not live to see his prophesy come true but died in November 1974 (aged 65)
    We of course now know that U Thant’s warnings were not heeded, the problems have indeed reached staggering proportions, and they are certainly now beyond our capacity to control”. Was it just that the right people were not paying attention?
    I myself frequently refer to the tattered old copy of the Limits that I bought in 1972 and since then one of the many other books I read on the subject was Twilight in the Desert by Mathew Simmons, who was of course Chairman of the Houston based investment bank to the energy industry, Simmonds & Co. Now I would have thought he was sure to have the Limits as bedtime reading, but no, and I quote below something that he himself wrote.
    “My curiosity about what the Club of Rome actually predicted in this The Limits to Growth book, was triggered in 1994 after hearing a talk by James Wolfenson, head of the World Bank, at a Global Harvard Business School Conference in Berlin.
    On my way back from Berlin, I kept thinking about the implications of the poor population of the globe finally becoming normal citizens of the world. This led me to muse about the whole Club of Rome issue. The more I mused, the more I began to wonder whether this group might have been correct in their concerns after all. Perhaps they were only wrong in their timing by 30 to 50 years. Or perhaps this group envisioned that by 2000, the world would have closed the gap between the rich and the poor, thus creating the shortages which their report warned would occur.
    As soon as I returned to the U.S., I had our librarian find a copy of the book which the Club of Rome had produced almost 30 years previously”.
    I am sure there are many other influential people like Matt Simmons who should have read the book but didn’t.
    Matt Simmons died in August 2010 (aged 67).

  5. Edward Marrs says:

    What scares me is not that we will soon no longer have access to enough energy to maintain the level of complexity to which we have become accustomed. I see this as a done deal. We are going down. My concern is that the majority of the population being energy consumers are completely energy illiterate while being completely dependent on the very thing they are ignorant of. Individuals and municipalities have neither the means nor the knowledge to produce any energy at all outside of building a wood fire. I am just one guy and I haven’t taken any surveys but from what I read and the people I meet my sense is that people have no idea of how they get their energy. They seem to imagine it as a magical by product of us being so smart. Who knows anything remotely technical about the workings of the vast complicated electrical supply network without which nothing in industrial society can function? All we know how to do is toggle the energy supply on and off. We know how to flip a light switch, put gas in our car maybe fill a propane tank but that is about the extent of our interaction with energy.

    Once our surplus energy intersects our fixed energy expenditures it will be impossible to reverse course. We have maneuvered ourselves into being dependent on efficient systems where the system cannot run outside of its narrow efficiency range. The efficiency requires all parts of the system have to function all the time. It cannot absorb any shocks. I cannot lose any parts. The electrical grid is dependent on computers. The computer industry is dependent on electricity. If one fails the other fails with the consequence that neither can be restarted without the other. This conundrum cannot be resolved. The only outcome is backsliding to a much lower level of activity based on local energy which in most places is not much. A lot of people are going to be completely blindsided by this. It is one thing to deal with a problem when you know what it is, you know it’s on its way and you know what to do. When you know none of these things it is not going to be pretty.

    • energyskeptic says:

      Great points, I love how you explain these complex matters so simply, especially “Once our surplus energy intersects our fixed energy expenditures it will be impossible to reverse course. We have maneuvered ourselves into being dependent on efficient systems where the system cannot run outside of its narrow efficiency range. The efficiency requires all parts of the system have to function all the time. It cannot absorb any shocks. I cannot lose any parts. The electrical grid is dependent on computers. The computer industry is dependent on electricity. If one fails the other fails with the consequence that neither can be restarted without the other.” I’ve written a lot on interdependencies, but efficiency is so important too

  6. MickN says:

    Very interesting blog!!!!
    I read the post by Jim Whyte with the quote from Matt Simmonds last night and it has resonated with me ever since. Our leaders in the developed world are many things but they’re not stupid. That’s why there has never been a really concerted effort to close the gap- it would have just have hastened the arrival of the situation we’re now facing. What I can’t understand is why there was no concerted effort at population control although I suppose the system requires continuous growth.

    At the time of Live Aid the population of Ethiopia was 40 million. Its now 90 million. Depressing and frightening.

  7. Suzette Williams says:

    Great post! I’m following the ETP model which seems to be successful so far and look forward to future postings about it, your analysis and links to other articles like that of Dr. Arnoux.

  8. Stephen says:

    The time to obsess over the technical analysis of the situation at this point is futile. We know enough to understand that the end of civilization as we know it is so very near.

    The best thing common folk can and should be doing is preparing *now*.

    The quickest way to start preparing and the best ways to get the most bang for your buck are:


    …and no, not that overpriced garbage companies sell.

    Wholesome rice and beans are the best storable foods AND the cheapest storable foods. There is a reason why poor people live off of beans and especially rice. For roughly a dollar a day, you can live off of 2700-3000 calories of rice. That more than enough calories all people need (men and women can easily live off of 1500-2000 cal per day).

    You can buy a 26 pound bucket of white dry rice for $22 and that bucket can last you 26 days or almost a month! That’s less than a dollar of food per day! That means 14 of those buckets can provide you a years worth of food for ONLY $308 dollars! That is dirt cheap. At that price there is NO excuse for anyone not to store at least 5-10 years of white rice alone.

    10 years worth of rice at that price will cost you only $3,080-3,100 dollars roughly! I personally will have 40 years of white rice stored.

    And concerning storage: white rice if kept dried will last pretty much indefinitely. Throw in some pure salt in to just to be safe and that’s all you need. The Asians stored white rice to live off of for decades so it definitely lasts long enough.

    Some storable seeds to plant foods would be great as well.


    Don’t waste time trying to grow a bunch of greens which don’t provide the calories to sustain life. Grow things you can live off of, like potatoes, corn, tomatoes, other grains, etc.

    Potatoes nutrition-wise are almost the perfect food. They contain almost all of the basic essential nutrients one needs including the calories needed to sustain life. They are also one of the easiest foods to grow.

    for this reason, I would learn how to grow potatoes. You can grow enough to store for winter as well.


    Have access to a river nearby for fresh water source but don’t just rely on that. ALSO buy a rain water catcher. Some rain water catchers can be attached to your house/gutter. Rely on these two things for drinkable water.

    “But you just cannot drink out of a river” someone may say. Yes, very true. This is why you should buy portable water filters. You can buy portable water filters that can filter out HUNDREDS OF THOUSANDS of water per device lifetime. That means just one of the filter will last the average human who needs a gallon of water per day a lifetime worth of clean drinkable water PER FILTER.

    These filters are VERY cheap. So to be on the safe side I would buy a bunch of them and not just rely on having only one or two or three (in case you lose them over the years).

    The two best filters which have been shown to filter out all common bad bacteria and viruses from ANY kind of fresh and natural water source are two brands:

    I would buy both brands to use to have a well rounded portable filter system. You can take these filters anywhere with you. I personally would own at least 10 of them. Just a couple can last a lifetime for a person but you always want extra incase a couple break or are lost down the road in the years ahead.


    Perma-matches or similar devices are best. They will give you a large or near unlimited amount of strikes. Buy a bunch (at least 20) and you will have heat assurance for your whole life. They’re cheap too.

    These ones will last you 15000 strikes per device:

    There are other similar ones other companies sell. Most are decent and work well.

    ALSO: make sure you have a wood burning oven/stove for heat in winter and live near a forest where you can have plenty of would to burn.



    Have plenty of first aid kits with all the basics needed. Make sure you have cheap tooth care supplies as well. Dental decay was a major issue people died from before the industrial revolution. Pure alcohol or vodka are great natural mouthwashes.


    Look, wherever you stand on the gun issue politically, it doesn’t matter. ignore ideology for a second and focus on reality.

    The fact is, you live in a country that will have plenty of guns. If you don’t have a means to protect yourself with something that is an equalizer, you won’t last the likely mobs of people who will be turning to violence and harming each other for food and water. And if you have plenty of storable foods/goods, you will need to protect those things. It will be a harsh world and if you give all your food away then you wont survive nor will your loved ones. You will have to look after yourselves and blind altruism will only lead to you or your family starving to death. So reality-wise, you will need to protect your goods which is your life-line. The only way to have insurance and protect that is to have at least a couple reliable fire arms and sufficient ammo. A good shot gun for home defense and a good rifle is really all that’s needed. Also, if worst comes to worst you can hunt with them too.

    it probably wouldn’t hurt to try to find a fresh water source where you can fish as well.


    Get some books on wild edible foods in your area. One common food anyone can find anywhere are acorns. yep, that’s right — acorns. Native American tribes had them as a staple in their diet!

    Acorns are nutty fruits. Shell them and cook them and they’re edible. The browns are more edible than the green ones which are not yet ripe. If worst comes to worst one can get plenty of those to help keep them through the winter and spring.

    9. TOOLS

    Have basic everyday tools you need, like sharp knives, etc.

    These are the very essential things all will need to have in place. If a person at least has these basic things in place, their chances of surviving and thriving go up dramatically.

    • energyskeptic says:

      I’d replace white rice, which has no nutritional value, with whole wheat, which stores longer than any other grain or bean — that’s why it has been the foundation of civilizations since they began thousands of years ago. And also a grain mill to make flat breads fast, since at the height of the crisis when everyone is burning everything cooking fuel may be hard to find (see

    • Rod Cloutier says:

      Thank you for this, I’m going to get all of these. Great to hear about the shelf life of white rice. Whether it is decline or collapse, it won’t hurt anyone to own these items.

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