Guest Post: Oil Limits And The Economy - One Story; Not Two

Tyler Durden's picture

Submitted by Gail Tverberg of Our Finite World blog,

The two big stories of our day are:

(1) Our economic problems: The inability of economies to grow as rapidly as they would like, add as many jobs as they would like, and raise the standards of living of citizens as much as they would like. Associated with this slow economic growth is a continued need for ultra-low interest rates to keep economies of the developed world from slipping back into recession.


(2) Our oil related-problems: One part of the story relates to too little, so-called “peak oil,” and the need for substitutes for oil. Another part of the story relates to too much carbon released by burning fossil fuels, including oil, leading to climate change.

While the press treats these issues as separate stories, they are in fact very closely connected, related to the fact that we are reaching limits in many different directions simultaneously. The economy is the coordinating system that ties together all available resources, as well as the users of these resources. It does this almost magically, by figuring out what prices are needed to keep the system in balance—how much materials of which types are needed, given what consumers can afford to pay.

The catch is that the economic system is not infinitely flexible. It needs to grow, to have enough funds to (sort of) pay back debt with interest and to make good on all the promises that have been made, such as Social Security.

Energy use is very closely tied to economic growth. When energy consumption becomes slow-growing (or high-priced—which  is closely tied to slow-growing), it pulls back on economic growth. Job growth becomes more difficult, and governments find it difficult to get enough funding through tax revenue. This is the situation we have been experiencing for the last several years.

We might think that governments would be aware of these issues and would alert their populations to them.  But governments either don’t understand these issues, or only partially understand them and are frightened by the prospect of what is happening. The purpose of my writing is to try to explain what is happening in terms that people who are used to reading the Wall Street Journal or Financial Times can understand.

I am not an economist, so I can’t speak to the question of what economists are saying. I do know that what economists say tends to change from time to time and from researcher to researcher. For example, in 2004, the International Energy Agency prepared an analysis with the collaboration of the OECD Economics Department and with the assistance of the International Monetary Fund Research Department (Full Report, Summary only). That report said, “.  . . a sustained $10 per barrel increase in oil prices from $25 to $35 would result in the OECD as a whole losing 0.4% of GDP in the first and second year of higher prices. Inflation would rise by half a percentage point and unemployment would also increase.” This finding is consistent with the issues I am concerned about, but I expect that not all economists would agree with it. Oil prices are now around $100 per barrel, not $35 per barrel.

The Tie of Oil and Other Forms of Energy to the Economy

Oil and other forms of energy are used to power the economy. Historically, rises and falls in the use of oil and other types of energy have tended to parallel GDP growth (Figure 1).

Figure 1. Growth in world GDP, compared to growth in world of oil consumption and energy consumption, based on 3 year averages. Data from BP 2013 Statistical Review of World Energy and USDA compilation of World Real GDP.

Figure 1. Growth in world GDP, compared to growth in world of oil consumption and energy consumption, based on 3 year averages. Data from BP 2013 Statistical Review of World Energy and USDA compilation of World Real GDP.

There is disagreement as to which is cause and which is effect—does GDP growth lead to more oil and energy demand, or does the availability of cheap oil and other types of energy power the economy? In my view, the causality goes both ways. Oil and other types of energy are needed for economic growth. But if people cannot afford oil or other types of energy products, typically because they don’t have jobs, then energy use will drop. And if oil prices drop too low, we will be in real trouble because oil production will stop.

How Oil Limits Work

People tend to think of limits as working in the same manner as having a box with a dozen eggs. Once the last egg is gone, we are out of luck. Or a creek dries up from lack of rainfall. The water is no longer available, so we have lost our water source.

With the benefit of the economy, though, limits are more complicated than this. If we live in today’s economy, we can purchase another box of eggs if we run short of eggs, assuming markets provide eggs at a price we can afford. If the creek runs dry, we can figure out a different approach to getting water, such as buying bottled water or hiring a tanker to get water from a source at a distance and bringing it to where it is needed.

Oil limits are a kind of limit we often hear concerns about. Being able to drill oil wells at all and refine the oil into products of many kinds requires a complex economy, one that can educate engineers working in oil extraction and can build paved roads, pipelines, and refineries. The economy needs to be able to produce high tech equipment using raw materials from around the world. Thus, there must be an operating financial system that allows buyers at one end of the globe to purchase materials from the other end of the globe, and sellers to have the confidence that they will be paid for contracted products.

If a company wants to extract oil, it can almost always figure out places where this theoretically can be done. If a company can gather together all of the things it needs—trained workers; enough high tech extraction equipment of the right type; enough pollution-fighting equipment, to prevent oil spills and spills of radioactive water; and leases on land where drilling is to done, then, in theory, oil can be extracted.

In fact, the big issue is whether the extraction can be done in a sufficiently cost-effective manner that the whole economic system can be supported. Even if the cost of extraction “looks” fairly cheap, such as in Iraq, or in some of the older installations elsewhere in the Middle East, the vast majority of the revenue that is generated from oil extraction (often as much as 90%) goes to support the government of the country where the oil is extracted (Rogers, 2014). This revenue is needed for many purposes: desalination plants to provide water for the people; food subsidies, especially when oil prices are high because food prices will tend to be high as well; new ports and other infrastructure; and revenue to provide jobs and programs to pacify the people so that the government will not be overtaken by revolt.

A major issue at this point is the fact that most of the easy-to-extract oil is already under development, so companies that want to develop new projects need to move on to locations that are more difficult and expensive to extract (Bloomberg, 2007). According to oil industry consultant Steven Kopits, the cost of one major category of oil production expenses increased by an average of 10.9% per year between 1999 and 2013. In the period between 1985 and 1999, these same expenses increased by 0.9% per year (Kopits, 2014) (Tverberg, 2014).

When production costs are higher, someone loses out. It is as if the economy is becoming less and less efficient. It takes more people, more energy products, and more equipment to produce the same amount of oil. This leaves fewer people and less energy products to produce the goods and services that people really want, putting a squeeze on the economy. The economy tends to grow less quickly because part of the goods and services available are being channeled into less productive operations.

The situation of the economy becoming less and less efficient at producing oil is called diminishing returns. A similar problem exists with fresh water in many parts of the world. We can extract more fresh water, but it takes deeper wells. Or we have to ship in water from a distance, using a pipeline or trucks. Or we need to use desalination. Water is still available but at a higher per-gallon price.

Diminishing Returns is Like a Treadmill that Runs Faster and Faster

There are many ways we can reach diminishing returns. One easy-to-illustrate example relates to mining metals. We usually extract the cheapest-to-extract ores first. An important cost consideration is how much waste material is mixed in with the metal we really want–this determines the ore “grade.” As we are gradually forced to move from high-grade ores to lower-grade ores, the amount of waste material grows slowly at first, then dramatically increases (Figure 2).

Figure 2. Waste product to produce 100 units of metal

Figure 2. Waste product to produce 100 units of metal

We know that this kind of effect is happening right now. For example, the SRSrocco Report indicates that between 2005 and 2012, diesel consumption per ounce of refined gold has doubled from 12.7 gallons per ounce to 25.8 gallons per ounce, based on the indications of the top five companies. Such a pattern suggests that if we want to extract more gold, the price of gold will need to rise.

The economy is affected by all of the types of diminishing returns that are taking place (oil, fresh water, several kinds of metals, and others). Even attempting to substitute “renewables” for nuclear and fossil fuels electricity production acts as a type of diminishing returns, if such substitution raises the cost of electricity production, as it seems to in Germany and Spain.

If the total extent of diminishing returns is not very great, increased efficiency and substitution can act as workarounds. But if the combined effect becomes too great, diminishing returns acts as a drag on the economy.

Oil Increases are Already Higher than the Economy Can Comfortably Absorb

For oil, we can estimate the historical impact of increased efficiency and substitution by looking at the historical relationship between growth in GDP and growth in oil consumption. Based on the worldwide data underlying Figure 1, this has averaged 2.0% to 2.4% per year since 1970, depending on the period studied. Occasional years have exceeded 3%.

The problem in recent years is that increases in the cost of oil production have been much higher than 2% to 3%. As mentioned previously, a major portion of oil extraction costs seem to be increasing at 10.9% per year. To make this comparable to inflation adjusted GDP increases, the 10.9% increase needs to be adjusted (1) to take out the portion related to “overall inflation” and (2) to adjust for likely lower inflation on the portion of oil production costs not included in Kopits’ calculation. Even if this is done, total oil extraction costs are probably still increasing by about 5% or 6% per year—higher than we have historically been able to make up.

According to Kopits, we are already reaching a point where oil limits are constraining OECD GDP growth by 1% to 2% per year (Kopits, 2014) (Tverberg, 2014). Efficiency gains aren’t happening fast enough to allow GDP to grow at the desired rate.

A major concern is that the treadmill of rising costs will speed up further in the future. If it is hard to keep up now, it will be even harder in the future. Also, the economy “adds together” the adverse effects of diminishing returns from many different sources—-higher electricity cost of production, higher metal cost of production, and the higher cost of oil production. The economy has to increasingly struggle because wages don’t rise to handle all of these increased costs.

As one might guess, when economies hit diminishing returns on resources that are important to the economy, the results aren’t very good. According to Joseph Tainter (1990), many of these economies have collapsed.

Why Haven’t Governments Told Us About these Difficulties?

The story outlined above is not an easy story to understand. It is possible that governments don’t fully understand today’s problems. It is easy to focus on one part of the story such as, “Shale oil extraction is rising in response to higher oil prices,” and miss the important rest of the story—the economy cannot really withstand high oil (and water and electricity and metals) prices. The economy tends to contract in response to a need to use so many resources in increasingly unproductive ways. We associate this contraction with recession.

We have many researchers looking at these issues. Unfortunately, most of these researchers are focused on one small portion of the story. Without understanding the full picture, it is easy to draw invalid conclusions. For example, it is easy to get the idea that we have more time for substitution than we really have. Financial systems are fragile. The world financial system almost failed in 2008, after oil prices spiked. We are still in very worrisome territory, with many countries continuing a policy of Quantitative Easing and ultra low interest rates. We may have only a few months or a year or two left for substitution, not 40 or 50 years, as some seem to assume.

Of course, if governments do understand the worrisome nature of our current situation, they may not want to say anything. It could make the situation worse, if citizens start a “run on the banks.”

The other side of the issue is that if governments and citizens don’t understand the full story, they may inadvertently do things that will make the situation worse. They certainly won’t be looking long and hard at what collapse might look like in the current context and what can be done to mitigate its impacts.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
0b1knob's picture

Units of waste production per 100 units of metal.

Is that in femto metric tons per cubic furlong?   Metric or english system?

FieldingMellish's picture

Its a ratio so its unitless.

Flakmeister's picture


It is another way of expressing declining ore quality...

Skateboarder's picture

Used to be shitloads of little fake marshmallows in the bowl of cereal. Mostly oats nowadays.

kaiserhoff's picture

It is mindless Luddite propaganda to claim that all human progress is forever limited by cheap oil, the concentration of ore, or any other "SHORTAGE".  It demonstrates a lack of knowledge of history, economics, innovation, and a profound and pathetic laziness about real work and real problems.

ZH deserves better.


knukles's picture

Thank you.

BTW if that unit of waste per lump of you know what is rounded to the nearest whole number is it "pointless"?

kaiserhoff's picture

Rounding the toxic waste to zero?  Sounds like something we should do to Barry;)

A drinking Buddy got this right.  He said if Barry wants to 'punish" Putin, he should approve the pipeline, sanction off shore drilling and wait for Putin to poop his depends.

Mister Kitty's picture

No worries.  There's plenty of oil to go around.  Bitches.

CrashisOptimistic's picture

Gail and the peak oil folks spend a LOT of time trying to sound mild and reasonable because for some reason they care what other people get from their output.  Somewhat pointless perspective when faced with inevitability, unless they are fundraising.

There IS plenty of oil and there always will be plenty of oil.  It's underground and that's where it will stay.  It is in smaller and smaller bubbles of geologic porosity.  You can expend the effort (who cares about measuring it in dollars?) to get a coke can sized bubble of porosity, or you can just wisely decide the effort ratio is not favorable.  A coke can of oil doesn't go very far.  it doesn't even power the drill thru 100 feet of rock.

This is why the folks sneering at the concept are out to lunch.  They are RIGHT.  There IS and WILL BE plenty of oil.  They can't grasp that they are right and are going to die of scarcity anyway.

daveO's picture

Monopoly power helps drive prices. I remember back in the 70's when the Ad Council was running commercials about oil running out. This, while Carter(a Rockefeller stooge) was hog-tying the nuclear industry. Alternative energy was all the rage. I remember an office building being built with Solar Panels on the roof. 'Solar's gonna save us'. Then Volcker raised rates back above the market. A few years later the oil boom turned to bust. Solar panels and alternative energy went into hibernation. Alternatives are being hyped by the same monopolists who endeavor to keep oil off the market. Solyndra is a perfect example, funded with taxpayer money funnelled to the well connected. 

Flakmeister's picture

I'll give you a F for the revisionist history lesson...

Rakshas's picture

Mister Kitty, 

unlike a good number of ZH members who don't appear to need the soothing support that your blog brings I, having recently suffered a personal loss, enjoy a return to the innocence of the internet of years past and find myself visiting your blog whenever it is proffered in kind I would like to share with you a Site dear to my heart in hopes you too can benefit as I have from your kindness.



daveO's picture

Well, we know that ain't gonna happen. Oil prices started going up after the majors all merged back in the late 90's. BHO's just another one of their puppets. Add in artficially low interest rates for most of these years and voila, $100+/barrel oil. Bring rates back to normal, and watch things normalize.  

css1971's picture

Have you read my "delusions" post?

I happen to be somewhat sympathetic to your view, as opposed to CrashisOptimistic... Putting me on the optimistic side. However, even in the best case, the world is going to be very different, a large proportion of what you see around you is going to "go away" and be replaced by something else. It's possible a very large number of people are going to "go away" as well, "progress" may not be what you expect.


chemystical's picture

"The world will end in this year" or "...on this day" for the truly bold predictors.

Said these notables:

Simon bar Giora 70 A.D.

Martin of Tours 400 A.D.

Hippolytus A.D.

Sextus Julius Africanus 500 A.D.

Gregory of Tours 806 A.D.

Pope Sylvester Jan 1, 1000 A.D.

Sandro Botticelli 1504 A.D.

Martin Luther 1600 A.D.

Sabbatai Zevi 1648 A.D.

Christopher Columbus 1656 A.D.

Cotton Mather 1697 A.D.

Jacob Bernoulli 1719 A.D.

John Wesley 1836 A.D.  ................ fast forward

Jean Dixon 1962 A.D, and 2020 A.D. (after the earlier prediction failed

Jim Jones 1967 A.D.

Charles Manson 1969 A.D.

Pat Robertson 1982 A.D.

Benjamin Creme 1982 A.D.

Edgar Whisenant 1988, 1988 (different day) and 1989 A.D.

Louis Farrakhan 1991 A.D.

Harold Camping 1994, 1994, 1994 A.D. (different days after the earlier prediction failed), 2011 and 2011 (different days after the earlier prediction failed).  Persistent little bugger.  A failure but a persistent failure.

Marshall Applewhite 1997 A.D.

Nostradamus 1999 A.D.

Charles Berlitz 1999 A.D.

Timothy Dwight IV 1999 A.D.

Isaac Newton 2000 A.D.

Edgar Cayce 2000 A.D.

Sun Myung Moon 2000 A.D.

Aum Shinrikyo 2003 A.D.

Pat Robertson 2007 A.D.




css1971's picture

The risk is of a Dark Age, rather than the end of humanity.


BTW, the European dark age is represented in your list, if you'd care to plot the frequencies. circa 500 -> 1600.

August's picture

Please, let's give the High Medieval, not to mention the Renaissance, a little R-E-S-P-E-C-T. 

I'd go with 500 - 800 for true Darkness, with every man his own sovereign, just like Simon Black, and those white dudes in Montana.

prains's picture

....oh the good ol'days when the Llamas ran free and Simon was just a boy dreamin about how to catch them

chindit13's picture

Don't turn the lights out on Charles Martel!  Dark Ages, indeed!

Little known fact:  In order to fund the full-time army he felt he needed to fight then-modern wars, Martel held a bake sale at the monastery of St. Martin of Tours, where a small creme-stuffed yellow cake sold rather well.  It has been said that the remaining Merovingians, then near terminal decline, were rather too fond of the pastry and overconsumption made them dissolute, hastening their fall.  So popular was the cake, in fact, that some historians claim the recipe was the real goal of the Umayyad invaders, not the spread of Islam into northern France.

Martel and his professional army went on to defeat the Umayyads, France and Europe remained Christian, and the cake became the Twinkie. 

Now you know.

kaiserhoff's picture

Heysoos, the Nazerene.  Verily I say unto thee, there are many present here, who shall not taste of death before..., blah, blah, blah...

CrashisOptimistic's picture

The end of the world is when the last human dies.  Let's agree on definition.

6 billion out of 7 billion humans dying is thus not the end of the world.  That's what's coming.  Fairly soon, too.

Chief Wonder Bread's picture

THat seems likely. Who goes and who stays is the only issue. You can slice and dice it any way you want. By nation, region, tr_ _e, income level, education level, occupational specialty, age, sex, access to remaining resources...

I hate to even think about it but the pain won;t be evenly distributed.

Yes_Questions's picture



In a world after people, cockroaches, ferral dogs, and ZH Posters live in abundance.

See you on the other side.


I'll be the one with the tail.

Obese-Redneck's picture

May your McMansion always have central air.
May your monster trucks tank always be full.
May your gargantuan fridge and freezer always be full.
May your electric towel warmer always be toasty.
May your 4 bathrooms always have TP.
May your heart shape ensuite jacuzzi always be foamy.
May your 90 inch flat screen always have 1000 channels.
May your pool always be chlorinated.
These are the simple dreams of a simple people.

Errol's picture

Mr Redneck, thank you! I actually did LOL...

AGuy's picture

"6 billion out of 7 billion humans dying is thus not the end of the world. "

That all depends. If your one of the 6 Billion then its the end of the world for you!

Consider that there are 440+ nuclear reactors around the world. Each has a spent fuel pool containing enough waste material to render a radius of 1000 miles inhabitable. These spent fuel pools need constant cooling and attention, Disruption more than a week or two risks that a spent fuel pool will catch fire. Japan dodged a bullet since its Small Spent Fuel pool in Reactor 4 did not collapse. Had that single SFP collapsed All of Japan would have been render inhabitable. It would have also resulted in chain reaction, as It would have eliminated the support for Japans other reactors, eventually leading to the rest of Japans SPF from also catching fire. Japan's SFP's alone would render all of Asia and the Pacific inhabitable.

Our Nuclear Plants are the doomsday machine from Dr Stranglelove. Not only can this doomsday machine be triggered by war, it can also be triggler by an economic collapse, regional natural disaster, or any situation that brings down a grid for an extended period.

It seems very inprobably that humanity, or any vertibrates will survive a collapses as these SFP will render the entire globe inhabitable.

"That's what's coming. Fairly soon, too."

I hope not!



Errol's picture

AGuy, here's one of the dots for you: there is limited intermixing of atmosphere between the Northern and Southern hemispheres.  Here's a second dot: the vast majority of nuclear plants and weapons are in the Northern Hemisphere.

Here's a bonus dot: former CIA chief Daddy Bush owns a huge estancia in the Southern part of Argentina.

Feel free to connect the dots any way that comes to mind...


AGuy's picture

"Limited intermixing of atmosphere between the Northern and Southern hemispheres"

The Oceans will become complete contaminated, and there will be enough contamination between the hemisphere to kill everyone in the south.  There is no escape.

" former CIA chief Daddy Bush owns a huge estancia in the Southern part of Argentina"

Few of the rest of the elite have estates in the Southern Hemisphere. I would say 99% of the .1% are completely clueless about the dangers of the SFPs.



ebworthen's picture

Well, plot the rise in population to those dates and you might get to the real "oops!".

mickeyman's picture

Are you sure it didn't happen?

babarian gourd's picture

The Myans and John Cusack 2012 A.D.

Kreditanstalt's picture

Must be one of these "technology will solve all our problems and we can continue driving to the mall as ever" types...

CrashisOptimistic's picture

If you're an American, choosing to conserve and not drive to the mall is just saving gasoline for some Chinese or Indian.

No point in inconveniencing yourself.

Matt's picture

That is assuming there is nothing better that you could be allocating your finite resources towards, rather than driving to the mall.

Seer's picture

Yeah, I'm doing my best to burn through it so we can get this thing started on the next cycle...

But seriously, you've got a point.  Energy-importing nations are going to really feel the pain (can you say "Ukraine?" or "[in general] European ones?").

Location, location, location...  Food, Shelter and Water.  One need only compare the historical norm (of humanity) against what you see/have to figure out how one's situation is going to be entropically adjusted...

teslaberry's picture

i up voted you -----even though i disagree with you. 


ZH definitely does not deserve better. you are giving it too much credit. the 1/3 of articles that are decent on ZH are more than sufficient to make for the 2/3 of shit like this. 


if there is a meaninful analogy to be made it's that looking for useful news on most of the internet blogosphere is like mining in ore deposits with less than .01%  metal concentration. 


zh mining is like  mining fore 33% concentrated ore.  

naked capitalism is like  1% concentrated ore. 

MSM on television and WSJ/NYT is more like reading for propoganda to study the propoganda offensive. and for that reason a seemingly more worthwhile activity than going to blogoreah anular news distribution sites like naked capitalism. 

but yes, it is luddite nonsense. people are led to believe that oil coal and hydrocarbons are unsustainable because they are slowly poisoning us and becomign more expensive. even though---peak oil has been thoroughly debunked , and 'peak cheap' oil has itself been a complex dynamic theory of the price of exploration and likely future discoveries-------people just want to believe that the world is ending because they don't like it. 


try walking on a superfund site. i have. it's totally sustainable when you live on a massive continent with devleoped superstructure government  and transport systems----- like the usa russia or brazil. after you lay waste to one area-----just gate it off and move on to the rest. there's plenty!

the only time you really do run into problems is when you live on an island, or have limited real estate. japan's fukushima herpes infestation seems to be a problem for the japanese. but even they can deal with the cancer rates going up. there's 120 million of them. oh yea, even on a small creeping cancer radius of an island like japan---------where the choice real estate is becoming slowly irradiated-----and the ocean for hundreds of miles , sick with radiation concentrating in a diluted layer on the seafloor----- humanity can deal with it. a few people die and the rest move on. the human termite itself may be weak, but nest extraodinarily strong. and the group of nests , nearly unstoppable for this epoch of history. even world war 3 won't stop this bitch.

it is more than obvious that the next few hundred years of human history will see the most unbelievably rapid devleopment and consumption of global forests , fisheries, and everything we have left. this cilvilzation aint done yet! not by a long shot.

a full scale nuclear war would probalby only set the world back by 20-30 years until full rebuilding brings the globe back to an even stronger, more rapidly progressing, technological beasting. 


you know whose fucked? elephants, whales, bears, wolfs, and large animals generally.


peak oil. no . peak species.  yes.



Headbanger's picture

Wow!   That's excellent!  

However, (just to have one)  I suspect that Mother Nature has a way to deal with us humans getting out of control killing off other species. Like some incurable disease. And I suspect this is also what's causing evrybody to be gay so we don't reproduce as much. And look at Japan where many young men have no interest in sex one way or the other.

But it's more likely we will see a huge spike up in the rate we kill each other cause we're getting sick of each other on a global scale. Either that or the Ancient Aliens return en mass and erase us when they see we're so fucked up as a species.

Seer's picture

Wars will increase because of resource sarcity.  The "hate" is more about an excuse to fight someone (to the death) over resouces.

That which cannot coninue forever won't...

rum_runner's picture

Wars don't have any meaningful impact on population.  From wikipedia "The world population has continuously grown since the end of the Great Famine and the Black Death in 1350, when it was near 370 million."


So there you have it.. unless we unleash massive nuclear war, war will not slow down population growth.

Seer's picture

"Wars don't have any meaningful impact on population."

Care to speculate what things would be like without the decreases in population from all the big wars?

But, clearly, we've been more cooperative/tolerant than combative: that's the point made by Peter Kropotkin in his book Mutual Aid.

SRSrocco's picture

"mindless Luddite propaganda"  Funny, when individuals can no longer comprehend real data and information as it pertains to limits to growth on a finite planet.

I gather the individual who made this comment has no idea whatsoever the serious condition of the world's oceans.  Again.. failure to comprehend important data.

This is the problem with the world today.... LEFT HAND KNOWS NOT WHAT THE RIGHT HAND IS DOING.

Smegley Wanxalot's picture

Unitless.  So kinda like Yellen.

chemystical's picture

"Its a ratio so its unitless."

Where the fuck did you get the idea that ratios are ispo facto unitless?

What about this ratio:

clueless poster per zero hedge poster.

with all due respect of course

Flakmeister's picture


This might be one of the greatest Poe's ever...

css1971's picture

What is a poster divided by a poster?


No units left remaining. Though the context of the ratio is posters it doesn't refer to a specific number of them. e.g. 4 posters. and is therefore unitless. Units are a count of things. in this case, the count of the number of posters. The ratio of 1:2 clueless posters to total ZH posters doesnt tell you how many there actually are of each, so you don't have a count of things.

chemystical's picture

The fact that units might cancel during dimensional analysis is not relevant to the OP's question or to the graph. 

A ratio of 1:2 WITHOUT UNITS in the instance to which you (and I) referred is nonetheless a reference to zerohedge posters.  60 secs/1 min might be unity, but it doesn't mean that time disappears.

The graph would provide more information if it provided vector in addition to scale if you will.  What is DID do (and misleadingly so) is to use the term "unit" whilst FAILING to state what that unit is.


css1971's picture

The context of the graph is pretty clear. It's a ratio of waste to ore concentration. By definition you'll get X amount of waste for concentration Y, multiplied by grams, kilos, kilotonnes, megatonnes. The actual number of units is not the point but to show the increasing waste relative to the amount produced. Use whatever units you like the ratio remains the same and will remain similar if not exactly the same for small producers of a few thousand kilos vs producers of tens of thousands of tonnes. Indeed, the scary part about this is it applies to multiple different resources, equally to gold, copper, iron where the units are on entirely different scales, all are being depleted and are ruinning up that curve.

Also consider the audience. It's not a scientific, or industry paper, it's a blog explaining the problem. Including the units can be distracting, particularly if the numbers vary from source to source. You end up getting arguments over whether source A's 1.9 million tonnes figure is better than source B's 1.6 million tonnes, when there's now ~180 million tonnes of waste being sifted to extract the resource.