“If we want to reduce poverty and misery, if we want to give to every deserving individual what is needed for a safe existence of an intelligent being, we want to provide more machinery, more power. Power is our mainstay, the primary source of our many-sided energies.” ~ Nikola Tesla
By Catherine Austin Fitts
I am working on an outline for a discussion on breakthrough energy this evening with Joel Garbon, President of the New Energy Movement. Sharing my notes with you may inspire questions and ideas and contribute to a framework for a highly complex, but exciting discussion.
The inspiration for the interview was an ongoing discussion of the factors contributing to current pricing in the oil and gas market – both commodities prices and equity valuations which also translate into and influence currency values and country market valuations and sovereign credit ratings.
Whenever the price of a key commodity swings by such a large percentage, there are bound to be winners and losers through the global economy. We have been getting questions from subscribers: Is this just the oil card, or is this the symptom of a global slow down or is breakthrough energy technology at play?
Let’s take a look at some of the factors that are likely impacting supply and demand:
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I. THE OIL CARD
Fossil fuel currently provides approximately 87% of energy demands globally. Both a growing population and a growing global middle class have resulted in a steady increase in usage through 2013. I have not yet seen 2014 numbers.
The US is intentionally manipulating the oil price down (alternatively, allowing the price to fall towards the market price given that the price has hovered significantly above average finding costs) is a tactic of economic warfare targeted at Russia. Lowering the oil prices is one of the only effective weapons the US has at this point. The US-European failure to craft a diplomatic solution in the last week or two means more pressure on the oil price. Hence, we see Citigroup yesterday spinning that the oil price could go to $20.
If you have not listened to our interviews with Jim Norman on the Oil Card, they are highly recommended! You can find them in your Energy Library.
II. GLOBAL ECONOMIC SLOWDOWN
The global economy is slowing – which relatively reduces demand. A great deal of that slowing relates to efforts to control – including access to energy and energy technology – through violence or fraud and other behaviors that create risk.
III. NEW TECHNOLOGY – OTHER THAN BREAKTHROUGH ENERGY
I know of no reliable statistics on this point, but this factor has the potential to be quite disruptive of global demand.
1. Smart Phone revolution – digital technology and communications
Simply, more ways for the global population to destruct demand for natural resources through increased intelligence and communication particularly where market prices are allowed to function.
2. Advances in material sciences
If we significantly lower the weights of everything from cars, to machines, to planes and increase efficiency, the impact can be dramatic.
Note the Swiss announcing that they have increased solar panel efficiency by essentially double by using graphene.
3. Fracking technology
While fracking is clearly a transition technology, the US has made a huge bet on natural gas and its relative natural gas costs are currently an important economic advantage.
4. Increased investment in renewables energy; increased productivity
The renewable energy market share is growing steadily – 13% in the US and 23% globally.
2013 Statistics on renewable energy published by DOE in December 2014
Germany and Japan are two of the wildcards given their scientific and engineering.
Germany is highly dependent on Russia oil and gas – approximately 25%. After the disaster in Fukushima, they announced they were phasing out nuclear energy. Doing that plus avoiding dependence on Russia puts them in a squeeze that will likely result in the application of both existing and new technologies.
Japan is deeply dependent on imported fossil fuels and nuclear – so they are in a similar squeeze as Germany.s.
Worth noting, the push in Europe to integrate conservation and renewables has significant impacted the valuations of European utilities.
German Village Achieves Energy Independence
European Utilities: How to lose half a trillion euros
Not so in the US, utilities have been on a steady climb.
Yahoo Finance: US Utilities ETF – XLU
I suspect, in part, because the US has instituted a regulatory structure and insisted on “smart meters” so that the utilities can generate steady profits and dividends no matter what happens with technology, conservation and any moves to household or local self sufficiency.
5. Thorium Reactors
Thorium reactors were essentially rejected in the 1970’s. Now they are back on the drawing boards – offering a much safer form of nuclear technology.
Efforts with thorium reactors appear to be quite long lead time. However, if the Chinese and/or Indians do make a major commitment to thorium, obviously that could swing future projections of fossil fuel demand.
In a sense, the picture looks like an unraveling of the overall Bretton Wood’s system. The pressures for energy independence are so great, that the efforts to police the oil standard are unavailing as well. Consequently, at this point it is impossible to think about this issue with looking at the demand coming from the emerging markets and the dance between the US, Russia and China and the squeeze it is placing on Europe, particularly Germany, and Japan.
Of course, given that the US dollar is on an oil standard, this also puts the discussion smack dab in the middle of the global currency wars.
IV. NEW TECHNOLOGY – BREAKTHROUGH ENERGY
Given the various tensions globally and the growing demand for energy, the question now is whether or not the time has come for breakthrough energy to finally move into practical application beyond the breakaway civilization (that is, other than in UFOs and underground bases where someone IMO is clearly using technology well beyond fossil fuels)
Joel Garbon of the New Energy Movement has been working on test standards which would make it much easier and economic to test new inventions. See the link below.
In the standards that Joel Garbon provided, he provided the following overview of breakthrough energy technology:
• Electrical
• Magnetic
• Thermal
• Mechanical
• Chemical
• Nuclear
I had been thinking of organizing our discussion in terms of applications:
1. Residential & Commercial Real Estate
2. Transportation – Cars, Planes, Ships and Trains
3. Industrial Production and Equipment
I will ask him to explain cold fusion – and the dance between the recent announcements from the Russians and Lockheed Martin. If you have not read Dr. Farrell’s posts on this, I encourage you to do so. Here is Joseph’s latest on Cold Fusion.
OK, these are my notes so far. Do post thoughts, questions, ideas. This is quite a complex phenomenon, but there is rich opportunity for all of us if we can understand what is happening. It will, no doubt, take all of us!
RELATED READING
New Energy Movement: Protocols for Assessment of BET Performance Claims
US Department of Energy: 2013 Renewable Energy Data Book
Royal Dutch Shell: New Lens Scenarios
Goldman: Here’s Why Oil Crashed—and Why Lower Prices Are Here to Stay
