The statement that there can be no economic activity
without energy and that fossil fuels are
finite contrasts with the fact that money is not finite and can be created by governments
via their central banks at zero marginal cost whenever needed.
An important fact about COAL, GAS and OIL (even
when produced via fracking) is that their net energy ratios are falling rapidly.
In other words the energy needed to extract a given quantity of fossil fuels is
constantly increasing. This ratio (Energy Invested on Energy Returned - EIOER) provides
yet another warning that we can no longer rely on fossil fuels to power our
economies. We cannot wait until the ratio falls to 1/1 before we invest seriously in alternative sources of energy, because by then industrial society as we know it doday will have ceased to exist.
PS: A link between growth in energy consumption and GDP
growth is clearly illustrated on slide 13 of Gail Tverberg's presentaion
entitled ''Oops! The world economy depends on an energy-related bubble''. In
fact, the slide shows that growth in energy consumption usually precedes GDP
growth.
