"We can no longer assume (economic) growth"

A number of commentators have made the connection between energy supplies peaking, the resulting end of economic growth and the consequences thereof. Nicole Foss of The Automatic Earth springs to mind. But there are others inlcuding Dr Mike Haywood who spoke in Edinburgh recently. And, of course Chris Martenson. But it is not often you get to hear a stockbroker talking about the end of economic growth.

Here's an introduction and transcript of a short section of the In Business BBC radio  4 programme Over a Barrel kindly brought to my attention and introduced here by engaging Scottish peak oil speaker and net energy expert Mandy Meikle.

But I was most interested in what Tim Morgan was saying (25.20mins in). He's head of research at the London brokers Tullett Prebon (http://www.tullettprebon.com/strategyinsights/about_timmorgan.aspx) & sounds at times like he's giving my energy talk! Hadn't heard of him but in addition to thinking that everything we do boils down to energy (i.e. he understands basic physics!), he says, "...energy is all the same thing and if, therefore, the output of the economy is ultimately an energy equation, then money is simply a way in which we tokenise into a convenient form the energy dynamic which drives the economy". He doesn't use the term 'net energy' but talks about the fact that we've used up the high yielding oil & the impacts of that on growth (see below).

(27min) TM: "...the advocates of peak oil argue that production is now going to go into decline because we've used up half the original oil... We haven't ... but what we have done is we've cherry-picked the best of it so the energy that gives us the highest return of energy for the amount of energy we put in extracting it, that's been pretty much used up and we're getting into successively less efficient forms of energy and therefore the ability to deliver continuing growth, and indeed to feed a still-growing population, depends on us maintaining access to high-returns energy and that's the big question: can we and how?

TM: Well, we look for other forms of energy. We also I think have to look at using it dramatically more effectively... Are there ways in which we can prioritise the ways in which we use energy because the cornucopian abundance, if you like, that we've assumed for the last 250 years since the industrial revolution is rapidly ceasing to be the case.

Peter Day: What does that mean for us then?

TM: It means that we can no longer assume growth.

That answer seems to flummox Peter Day who actually asks if we should replace energy with imagination. No science background there then!

TM: Well, we look for other forms of energy. We also I think have to look at using it dramatically more effectively... Are there ways in which we can prioritise the ways in which we use energy because the cornucopian abundance, if you like, that we've assumed for the last 250 years since the industrial revolution is rapidly ceasing to be the case.

We could argue about Tim's assertion that we haven't used up half the oil, but I'd rather refer the interested reader to this video by Jean Laherrere a petroleum geophysicist and joint author, along with Colin Campbell, of the seminal 1998 article, The End of Cheap Oil.

Tim Morgan is bringing out a book Life After Growth. According to the Tullett Prebon website

.... his main focus is on the new discipline of "Exponential Energy Economics" (EEE). This new philosophy argues that the global economy consists of a series of population, economic and financial exponentials made possible only by exponential access to surplus energy, and addresses the issue of what might happen if the energy exponential were to continue to weaken.

Which is really what the Transition movement is all about at a local level.

And of course, Richard Heinberg is bringing out a new book, The End of Growth, which you can read sections from here.

But the limits we are hitting were predicted in 1972 in the book The Limits to Growth which sought to explore exponential growth in a finite world.