Lets talk about South Africa for awhile. Energy-rich country. Ran its transport systems on liquified-coal which was synthesised by a company called Sassol. This gave them energy independence and they would have been able to fight under conditions of embargo since liquified coal can go straight into diesel engines. I speak of Apartheid South Africa that would have been almost impossible to defeat had they wanted to defend their position.
Whats happened in the last few years is reminiscient of the dying days of Atlas Shrugged. The South Africans have been having forced promotions of black people and a lot of the dudded skilled people have left. So the power engine is running down. Instead of throwing their hopes behind John Galts engine they are now hoping to get hold of French nuclear energy. There are blackouts the whole time. Every time there is a blackout this must cost millions in lost production.
Once you get to such a dire situation there is no innovating your way out of it. There is no substitution towards different non-carbon technologies to get out of that sort of mess because energy and capital are one. Capital takes energy to build and energy to run and cheap enough energy to make the lengthening of the structure of production worthwhile.
A progressing (growing) economy grows by the lengthening of the structure of production. The Gross Domestic revenue must grow a great deal faster then the Gross Domestic Product. This means that growth implies DISSPROPORTIONATELY increased per capita energy consumption. With any energy efficiencies an afterthought.
Fortunately we have abundant energy. We just need the capital to gather it. Capital needs energy. Energy needs capital. Hence no talk of the vanity of solar, wind and other nutball bean-sprout-munching energy methods ought to be condoned as a way of dealing with a looming crises.
These vanities are to be invested in only when we are back under conditions of cheap energy. Which we won’t be for some decades thanks to the environmentalist movement.
Now supposing that the South Africans, who appear doomed by the way, suppose they didn’t get this French nuclear power to bail them out. And instead they engaged in endless chatter about seaweed-biodiesel and carbon taxes? Supposing whenever an investor thought of sticking up another coal-electricity generator alarm bells went off in his head at the contemplation of the harrassment, legal costs, and political hurdles he would encounter. And supposing the South Africans starting madly subsidising solar power, wind farms and solar towers?
Each of these measures would hasten their econonmic collapse. If their total economic collapse was fated for 5 years time, which is realistic from where I sit, instead that collapse would come in two years lets say.
Because Humphreys feels he is allowed to and within his best behaviour to merely DODGE rather than BEST arguments against his arguments …………. he has therefore not seen fit to educate himself in the understanding of the capital structure or of energy economics.
THE CAPITAL STRUCTURE
The amount of money spent between and within businesses vastly dwarfs GDP. And the whole thing runs on energy. I won’t address the issue of Keynesians here because they are lunatics who don’t understand economics at all. But neo-classicals have put GROSS INVESTMENT into the too-hard-basket. They think of capital as one big undifferentiated blob. They have to work hard in their mind to untangle physical capital spending with whatever it is a Hedge Fund is doing. Its a big confusion to them and they prefer to brush up on otherworldly theories of the firm and assure people of their credentials.
Now notice something strange and entirely bogus about GDP.
We have these gross figures lumped together. But I is NET investment. Which is something of an accounting fiction since it contains highly processed notions of retained profits and depreciation.
What if we were dealing with GROSS INVESTMENT?
As it turns out Gross investment is the whole deal in econonmics. The figure of Gross investment vastly dwarfes the other figures. It is internal spending within and between business. Its a massive figure. Its where all the important economic action is. Its where the vast bulk of the energy is consumed AND NEOCLASSICAL ECONOMISTS ARE TRAINED TO VIGOUROUSLY BLOCK IT OUT OF THEIR MINDS.
So they cannot see the economy as such. They cannot think about it properly. They do not register the importance of so many things. And so the notion that you could run 1000 households with some solar tower sounds like relevant information to them because they vaguely see the shops and the ships and they see the households in their minds eye….. but they are trained not to see most of the economy most of the time.
So thouroughly are they trained not to see the bulk of the economy, that they come up with all sorts of daft notions like the “service economy” and the “information economy” and they imagine we can all be landscape gardeners, fast-food franchise operators and hedge-fund managers.
THE FRAGILITY OF ELECTRICITY GENERATION. EXCESS CAPACITY IS CRUCIAL.
Now you have a turbine running. Its turning through a magnetic field which is creating a resistance. You have all these transformers all over town.
That giant turbine cannot be let slow down because it will take hours to fire it up again. So if its slowing the resistance must be eased. The strength of the field must be reduced. Hence electricity generation must be reduced if the giant turbine is losing momentum.
The transformers are all over town. They might be dealing with 132000 volts or something. ACDC. And they cannot allowed tot drop below about 49.95 Hertz or they will do just enourmous damage, screwing up everyones electrical equipment.
So if demand for energy exceeds what the system can handle one of the transformers must be shut down causing millions of dollars in lost production.
So supposing we open up a lot more land for housing development or we have some sort of investment boom, double digit GDR growth and all that. The energy production must always be the first tent in the peg. We must have an investment environment that leaves us with massive overcapacity at all times.
If the new suburbs and economic growth goes ahead without this overcapacity we can bugger ourselves up.
I have anecdotal evidence that our system doesn’t have much excess capacity. In wartime a single bombed coal-electricity plant could screw us up bad. Could make it near impossible to conduct sane econonmic activity while our boys got on with the butchering.
A MANY AND VARIED CAMPAIGN.
The environmentalist movement has been pushing us into a situation of energy stress for three or four decades now. They have made everyone frightened of nuclear and coal. This energy-deprivation-crusade predates the global warming lying campaign by two decades at least.
We cannot be reinforcing their lies. It doesn’t take a total ban on nuclear, coal-to-electricity or coal-to-liquified-coal to set us up for disaster. Money is a coward.
MONEY IS A COWARD. Investors are easily discouraged. And for no reason at all Humphreys wants to discourage them more.
There is no alternative to coal and nuclear that can be put up in an age of energy stress. Post-war up until the 1970’s was a cheap energy age. It didn’t need to stop but we had to move to coal and nuclear. And the environmentalist movement wouldn’t let us.
Before 1973 when we left a room we’d leave the light on. Wouldn’t even bother to switch it off. Those were the good days when even mind-blowingly stupid Keynesian practices couldn’t stop economic growth. We can only get those days back with massive expansion of coal and nuclear use.
So we have to start talking differently, we have start taxing differently, and we cannot have policy which reinforces lies.
The plan of the energy-deprivation crusade is and always has been global energy rationing as spelled out this very day on Late Night Live. To promote carbon tax literally is not to promote carbon tax actually. To promote carbon tax is to promote a global scheme of per capita CO2-rationing. Which means energy-rationing, global governance, massive payments to socialist countries and on and on.
Why on earth does Humphreys imagine that if he promotes his policy he also gets to nuance it?????
This is a childish delusional fantasy that Humphreys and Soon entertain. You cannot both push and nuance policy. This was the one devastating anti-war point that Humphreys made against me on another subject. You push an idea you don’t get to nuance it.
But the Humphreys policy itself is typical neoclassical economic illiteracy. Since it fails to see the economy entire and its just one more nail in the coffin for energy investment.
(Tapping the hitman on the hand like the nazi in marathon man.)
The environmental movement did not kill tens of millions of black children through a total DDT-Ban. They killed them by a variety of methods including just simple discouragement.
DDT-discouragement. DDT-bureaucratisation. And a closed factory there. A price increase here. A ban here and there. And that was enough to get the job done. Millions of wailing Mothers screaming all night long. 300 million chronically sick people on top of the kiddie-killing.
And so it goes for this current campaign. Its a tax there. A stupid misconception there. Somebody over here is convinced to be fearful of nuclear power. Some kids are taught to be bigoted about CO2. Its a Lamberting campaign. And there is some nutball out there that keeps wanting a carbon tax. He’s a nutball whose out there and he refuses to fucking LISTEN!!!!!!!
This nutball that keeps wanting a carbon tax. We say why we cannot-must-not have one. And he just ignores our argument, waits another freaking month. And he springs it on us again.
Now what is going on here?
Now the other thing is this. All our readily profitable non-nuclear energy sources are hydrogen-poor and carbon-rich. So much so that they are solids. Hence the next move is towards heavy carbon fuels. And carbon tax will get in the way of that. Our vehicles will be dieselised. The gasoline is on the way out and diesel has to come in.
THIS MUST HAPPEN. Because of the basic hydrogen-dearth. Its got to happen. But money is a coward. And another tax sitting directly on this transformation will hobble us horribly. Its a total disaster that Humphreys is talking about here.
We will go to heavy fuels everywhere they can be applied. That means diesel and liquified-coal.
And this must continue until such time as we have saturation nuclear power, which will provide the extra hydrogen atoms that will progressively lighten the fuels towards the methane end of the spectrum.
Now all of you must understand everything I’ve said here. Just keep reading it, and reading it, and reading it until you understand it all the way down to your blood-and-bones …….marrow-and-mitochondria. You must understand the energy landscape viscerally to fight this ugly ugly environmentalists looming disaster. They have replaced a make-believe disaster in the space of the real one they are pushing us towards.
This is a matter of the utmost seriousness.