I highly recommend you check out Steve’s latest interview at Palisades HERE.
I wanted to add an intellectual discussion as part of my solar purchasing series. For those looking for KWH break downs and my monthly solar bill, this isn’t the piece for you. For this one, I want to talk a lot about Steve’s “energy cliff” and his recent interview on Palisades Radio.
Steve has been sometimes curt and rude to me on Twitter, acting rather pompous at times. Part of it may be he sees me as uninformed or not knowing enough to even have the discussion with him. Part of it can be Twitter and how things typed can come across arrogant when not meant to be so. That being said, I greatly appreciate Steve’s research in this area and what he brings to the table from an intellectual discussion perspective. Even though I’m probably a thorn in his side, I love the ideas and conversation that comes from this. I listen to his interviews and it just gets my mind racing. Very cool!
My physics education and background might disagree with Steve’s ability to dismiss me, right away, at least. My physics teacher may disagree with me when he gave me a D in general physics 2 when I had a problem calculating the newtons of force and trajectory needed to kick a football through the uprights at 40 yards away if the wind was coming in at 7 mph WNW. Point is I know a little about the subject to discuss here, but not enough to go toe to toe with a graduate in physics from MIT.
Let’s dig in.
I’m an ideas guy. As I’ve told some of you, my friends in high school and myself were all ideas-driven type of people. My close friends all ended up with PhDs, with one of them now a colonel. I’m the ugly duckling with two master’s degrees. I shared a close friend with Chad Hurley – the founder of YouTube. Yes, he knows who I am and we hung out a decent amount in high school in our clicks. Grew up a mile from me. No, we lost touch after high school and unfortunately I’m not on his speed dial. Fun fact, I heard he is the one who designed the PayPal logo when he worked there, so I have one degree of separation to Elon Musk – being Chad Hurley, the founder of YouTube.
The point is, our culture in high school was very much to discuss big ideas. And while I don’t agree with SOME of Steve’s findings, I find the conversation and discussion absolutely fascinating to have. This is one of those situations where I see myself at one of these metals shows 5 years from now and there’s a circle of us discussion this stuff over scotch and we all go back and forth. He might throat punch me, but I find his interviews a MUST to listen to if you are an ideas guy. So Steve, if you somehow end up with 10 minutes to read this – I love a lot of your work and have polite disagreements with a few things. Please don’t throat punch me.
In the culture where I work, which I don’t talk about here for obvious reasons if anyone stalked me on LinkedIn, when you bring a problem to a superior, you also come in hand with possible solutions to said problems. This culture is not about throwing a problem in a superior’s lap and running away – it’s about completely understanding a problem and recommending a COA (course of action) to proceed. Your commander then is aware of the situation and can either poke holes in your recommendation, deny it for many reasons, or perhaps even get you resources to assist you in your COA.
So when I hear about the energy cliff, my mind races to understand the problem, but also do a lot of mental gymnastics about big ideas about how to solve the problems.
Part 1 – My critiques of the “energy cliff”….
- Today’s problems are not energy cliff problems, they are political problems not using available energy like coal in favor of more “green” energies. Problem is, anyone that lives in California or many other places can attest to the fact that there isn’t enough green energy here, yet, to power things. Meaning, this is a self inflicted gunshot wound and not a lack of energy. Politics in Japan have led to them shutting down a lot of nuclear energy after Fukishima. They can produce a lot more with spot uranium, but it was a political decision to use gas. I think Steve said they were using LNG. I might have that wrong. Point is, CURRENTLY, we aren’t dealing with energy cliff issues, we are dealing with politics creating energy problems. Why? If there are power outages in California, a sane person would then turn the lights back on with more coal. A Californian thus says we don’t have enough solar and these outages are reasons to then approve more solar. So the current energy shortages you see may be politically driven to get more approval for more green energy – completely discounting the coal plants that are around. I don’t know WHY Lebanon went dark, but I don’t think there’s a shortage of anything at the moment – it’s the will to not use “dirty” energy.
- Steve does not appear to be discounting higher energy prices (supply) which cause lower demand. We see this a lot – during travel season, prices go sky high, people travel less, supplies get caught up, prices come down. We also saw this during COVID lock downs how demand plummeted with no one driving in to work or traveling. I believe if we see $100 oil again anytime soon – in this green environment, you are dealing with $4-$5 per gallon gas here in the states. This is not politically sustainable, and OPEC already told Biden to pound sand. One of two things will happen – we will extract more oil at higher prices, or we will travel/drive less. With Telework proof of concept here tested during COVID, you will have a LOT more people teleworking with higher gas prices.
- I believe higher energy prices will also lead to people like myself looking at solar. IF I can get a solar panel system now to replace my energy bill at current prices, the thinking is I avoid much higher energy bills down the road. With coal being an enemy of the “green”, it stands to reason higher energy prices could be here to stay. With that, I believe the case for solar gets even stronger for homes. Meaning – a result of higher energy prices is a lot more homes moving off of the grid so demand of the grid goes down. I also believe many people like myself may look to get more solar than we need to anticipate more energy usage down the road with electric cars, and extra energy can be sold back to the grid.
- Battery tech – Steve more or less dismisses battery tech as “not having nearly enough”, but I have some thoughts on this that might surprise you and him. He just dismisses outright, but I put a factor of time and innovation with this I believe is compelling for the next 10-30 years.
- Managed de-growth – to me, this is an option, of course, but I think he’s missing the bigger picture. Problems and crises tend to force change. For example, IF Japan faced an energy crisis, it could change their position on nuclear. They don’t have a 20 year turnaround. It’s getting fuel and turning them on. China has a ton of nuclear plants in the making. To ME, if more energy is required and the choice is between blackouts and burning coal until you get nuclear online, there’s no one choosing black out. Sorry. In the SHORT term, blackouts can be used as a tool to generate conversation on “more green”, but the patience for that is only so much IF you have viable power generation you can turn on that minute. The lead time for nuke plants might be 10-20 years and have a large up front cost, but I believe this might be something Steve is discounting. You just make more of these. This doesn’t solve your diesel fuel problem, but it does reduce the need for coal and gas for generating power at plants.
- 80% loss of energy in transmission. I don’t know the numbers on this. He might be 100% correct on this. I remember the physics equations on this from college was like V=IR or something like that where the resistance increases with distance and the power is given off with heat. Well, think about how we use fiber optic line now rather than coax, cat 5, or cat 3 or the like in IT. IF more homes got solar and batteries, it may be stupid-crazy savings in energy production. Think about it. If my home used 13,000 KWH last year (according to my electric bill) he is stating that 65,000KWH needed to be generated to get 13,000KWH to my house, if 80% was lost in transmission. So if I get solar to replace the power used, I am not saving the electric company 13,000 KWH, but 65,000 KWH. So not sure about his numbers there, but the point is much higher energy bills will lead more people to get solar. This in turn would significantly reduce the load generated at the plants. Meaning – the “cliff” is a problem fixed with higher energy prices to have people generating power themselves.
- More advanced technology consumes more energy – this may be correct to an extent, but false in another sense. I’m leaning towards wrong on a lot of levels – but I didn’t hear his specific examples. I work in IT. My entire industry is about efficiency of productivity. 15 years ago I worked at a place where I managed 250 servers for SCCM worldwide (patching and OS delivery) in 8 different languages to support 125,000 people. A technology came out from 1e called NOMAD where it’s a lot of peer to peer sharing. So in a sense, those 250 servers could be reduced to maybe 5. Computers use less watts than before. I remember the days of the towers and 300W-450W power supplies. My laptop now has a solid state drive and barely takes any energy. TVs are more efficient. Monitors. Power policies on computers may have them turn off overnight with a tool like 1e night watchman. Your washer and dryer may be more high tech with gadgets, but the heating units may be more efficient. Look at the energy guide when you buy appliances – you are replacing your appliances with more efficient machines every day. Car tech increases and so does fuel efficiency at the same time with this. My point is that tech actually DRIVES energy efficiency, it doesn’t drive more power need. More power usage is a result of two things – more people being born, and more people getting connected to a power grid and using power for the first time.
Part 2 – analysis
That all being said, Steve puts out a TON of great information in this. Not going to go through all of the numbers but you need to listen. While I disagree with the end result on this, where he talks about a civilization collapse (possible, if not for our tech today), I do believe he is an early adopter of recognizing the problem. I just don’t agree with how this is going to end up. I very much respect his arguments and completely, 100% offer he could be correct – if we fail to innovate. However, virtually, I’m sitting across a table from him and poking some holes in his argument. Perhaps this can tighten his thesis? I am offering this up as a matter of intellectual discourse – not to besmirch his good name or reputation. So this is not a “him vs me” thing. It’s “here’s his thesis, how can it be tested”? I’d like to add thoughts into this conversation – as I agree a cliff of sorts exists, I just think the cliff aspect would be averted by higher prices causing change and innovation.
Let’s put our thinking caps on. How would you solve the upcoming energy crisis? Below, I want to look into what I would do to solve the energy problems.
Short term (1-5 years)
- Battery tech at hydro and solar plants. Most people do NOT understand that most power generation is “as needed”. Let’s assume a hydro plant can produce 100 units at peak conditions. Perhaps the demand is 130. This may then have other sources of power spun up to then assist this demand. When the sun goes down and people go to sleep, perhaps this demand is now 50 units. Not only is the auxiliary power stood down, but they turn off turbines at the hydro dam to tune their output to exact needs. Meaning, there’s a lot of lost power generation not happening. What if you have giant batteries that can store the extra power that’s generated during the night and then act as the auxiliary power during the day? You then don’t need that extra gas or coal power stood up. From what I heard, I believe Tesla was going to sell a battery to a local city in Texas? Keep your eyes on this, it could really change the game for hydro generation. Also – if you have excess wind or solar, wouldn’t it be nice to store? Fun fact – I worked at a hydro company as an IT lead for over 4 years where I learned a ton about hydro plants.
- Battery tech in homes. I had thought about solar over the years, but it was an ROI discussion. Why would I pay $200 a month for solar if my energy bills were $150? My thoughts have changed. It’s now to me about getting power here and storing what I can for continued use during power outages. IF there’s a California-like grid moment due to lack of green energy, I want my battery to work and generate power during the day. What I envision with Steve’s thesis is, in fact, energy costs will increase….by a LOT. What that SHOULD do is drive a lot more people to get solar at their house. IF I can get a battery to store excess solar production, I can more or less mostly not need anything from the grid. If more and more homes do this due to skyrocketing energy prices – guess what – less demand. Price, in theory, should fall. However, if you have more and more homes with batteries and solar – over a 5 year period – it should dull the shocks of any cliff. In California, all new homes need solar, as part of law. If 80% of energy is lost in transmission – it makes sense then to generate at the home.
- Smart home sensors and conservation efforts – many have these already, but if energy prices skyrocket, more and more people will buy these. Additionally, you will see more people conscious about turning off the lights and ensuring things not used are turned off. I know with me teleworking a lot that my energy bill is much higher because I keep my house at a constant 67. Before when I was at work, the smart stuff may have had it at 72 all day. So maybe if prices go crazy, I keep it at 70 and consume less electric. People aren’t grasping how much higher energy prices significantly affect demand.
- Driving less – I believe if gas prices hit $5-$6 here, all hell breaks loose. First, they are trying to pass a driving tax in the states based on your usage. I live 90 mins from where I work, so they are going to tax me on these miles. Idea is to help pay for roads with those who use them the most. Well, I can tell you a lot more people will do a lot more teleworking, if possible. I interview people as part of my job and every last one of them today asks about telework. Companies who do not offer telework will go extinct. So when gas prices go up like this, and taxes follow – people will inevitably drive less. Yes, I am aware not all positions can telework. But a vast majority of work can be done remote now.
- Growing and sourcing – If you are seeing costs of food going through the roof at the super market, it’s perhaps also because they are trucking in avocados from California or getting grapes from Chile. IF you are seeing massive higher prices due to transportation costs, it then drives you to source more local with local farms and growing some things yourself. I have a local farmer I get quarter cows from. I paid $834 for a quarter cow for 92 pounds of meat in March (grass fed/finished, so it’s expensive). In the last 6 months, I’ve seen beef at the store go up 20-25%. Guess how much I paid this week for another quarter cow? $834. No price increase. I believe that more people will start to source more locally which then reduces the amount you have to truck/boat and reduces the amount of travel, and thus fuel used. I grow my own cherry tomatoes, and they no longer need to be trucked from Mexico. If everyone did that with a portion of their food budget, you could see 5-10% reduction in trucking/boating needs for food.
- Travel/vacations – after lockdowns happened, many people were excited to get out and about. Many got on planes and went to exotic locales. Guess what I did. Looked into an RV. Apparently, lots of people have been buying them. Idea is that the family trips with a plane, hotel, and renting a car may become too cost prohibitive. Get an RV and park at a campground for $30 a night anywhere in the country and enjoy nature. This may use fuel to move a camper, but if more people do this, it will crater the airlines and hotel industries – which became bloated on this never ending bull market. I am also looking to get an RV in the next year or two, but my problem is I don’t know what I can pull with a RAM 1500. I got a rating of like 9500 pounds, but then there’s a lot of other factors that go into it. I think a lot more people look into campers, RVs, or just buying a damn tent. When plane tickets go crazy in price due to jet fuel, people don’t fly.
Medium term (5-10 years out implementation, start looking at now)
- Battery tech in trucks. Steve seems to think that forever, that diesel would be used for extracting resources from the earth to make things. He might be right. But IF I was an electrical engineer, today, in the days of a Tesla and Solar City – I’m thinking that I might be looking to make batteries for trucks. While this may never come to be, consider this concept. You have a mine with a solar field around it – or in the case of First Majestic’s San Dimas, perhaps a hydro plant. A heavy duty truck today that runs on diesel could be a modular vehicle with the bottom half with the tires and battery, and the cab and other parts on an upper piece. When a low battery comes up, you drive if back to base, and put the top half on a fully charged bottom half and off you go. Remember, these heavy duty trucks have very heavy engines and transmissions. With a truck of tomorrow, you have a battery, motor, and tires. It’s possible the rest of the components could be lightweight polymers or something strong like that and these trucks can replace the diesel trucks. There is a tremendous amount of power these existing diesel trucks have, and the question then would be how big/dense can these batteries get to produce serious amps of power.
- City de-population. I agree with Steve on these points. I think cities as we know them are dead. They will come back in 20-40 years, but they are about to become deserts. More on this below. Think about all of the companies who leased giant sky scrapers like a Merrill Lynch. When COVID happened, these companies realized they can work 97% remote. My brother is full time remote from Pfizer. All of these companies spending thousands of dollars per square ft to lease these giant buildings? When these leases end, they are out. Or, they risk losing people to competitors. IF you no longer have to go into the office, you no longer have to ride the train or drive into the cities. Think about how many people will then move out of cities who haven’t already. Think of all of the small businesses and restaurants near these buildings that no longer have lunch time customers? I believe many of these people go to suburbs or rural. Think about it. If you lived in NYC in a small apartment with your family of 4, you could sell that apartment now for a premium and buy a 6,000 square foot house in Wyoming with your profits and have no mortgage. And, you can keep your job. These people moving will reduce the need of city grids – both from a skyscraper and apartment point of view. These people then move to a rural location and get solar on their roofs with batteries.
- Electric cars take over. I don’t think the metal or resources exist for them to meet their goals, but assume you have solar at your house that can generate 1500KWH per month and you are currently using 1000KWH. You see a special deal on a new ford electric truck being sold for $25,000. You buy it. You can then charge your truck up nightly in your garage with your battery. No car needing fossil fuels. Over 10 years, if they get 1 billion electric cars made by 2030-2035, there will be a massive, massive drop off in fuel needed at the pumps.
- Efficiency. The house I live in I built new 7 years ago. Better windows. My old house I now rent out was built in 1900 and my gas bills in the winter were crazy town. Every year we get more efficient insulation. Windows. Building materials. Less heat escapes. Cool air lasts longer. Hydrothermal stuff. More efficient solar panels (they are near peak efficiency). The ICE engines are only 27% efficient, at best. Aerodynamics help efficiency with cars. Electric cars may be significantly more efficient in 10 years. Think about tires and co-efficient of friction which may require more energy to push something forward. Road surfaces may be better. Your appliances may get even more efficient. Better battery compounds and metals may store more energy for longer. Think about computers using even less energy – and the data centers behind everything getting even more efficient with possibly quantum computing which won’t produce the same heat. Perhaps these data centers, by law, must have solar to then produce the A/C locally.
- Robotics. I think this is something completely overlooked. Increases in productivity from robotics and AI. Many think these will displace workers and thus a UBI is needed. However, what if it simply augments humanity and allows for MORE productivity? I talk about the battery trucks above. What if these trucks were part of an AI network and no drivers or operators were needed for these mines? IT could reduce costs of mining from labor, and if you are generating all of your energy from solar or local hydro, your costs of mining are significantly less than today. Your first thought is, “all of these miners are now out of work”. Well, yes. However, it doesn’t mean they could not do other things. Entertainment, mechanic to work on the robotics, programmer to work with the engineers to design the robots for that industry. Writer. Open a food truck. Build houses. Farm. Weld. Point is, robotics and AI could reduce the need for a lot of labor, but this labor which could be highly calorically intense (think about how many calories chopping wood could burn in 8 hours) these positions could then be more desk-driven. So if a person needed 5,000 calories a day for highly intense labor jobs, they may only need 2,000 for desk jobs. Meaning, a society that needs less calories needs less food energy. Meaning, less food needs to be grown and transported.
- Less children. With higher costs, there no doubt many people today aren’t having 7 children – like both sets of my great grandparents on my dad’s side. I believe like in Japan, you see an aging population – and in China, where their one child policy is now crushing them to find people to work to support the aging population, you may have an era coming about in 10 years where our population growth RATE slides over the next decade. This is somewhat deflationary in that growth everywhere would slow. And so would the rate of energy needs.
Long term (10-30 years out implementation, start looking at now)
- Nuclear renaissance. I know we got the nuclear bros on Twitter here, but the green people will have a come to Jesus moment in the next 3-5 years if you are using Steve’s discussion as a guideline. Japan will fire up their 19 or so plants. China will have a lot of nuclear come on board. But how many power outages can you deal with in California before people get voted out? I just saw something yesterday that half of San Fran is planning to move away. That’s also dealing with the silicon valley. What you plan on having is massive amounts of spending and taxation in California, but there’s been a mass exodus out of there. Apparently, most people don’t like to walk down the streets with human shit everywhere and tents around. Who woulda thought. California lost population last year for like the first time in a very, very, very long time. As a small kid, I wanted to move there. As an adult, I don’t even want to visit there. It’s become a socialist state, and many industries and workers are moving out. These types of policies will have consequences 5-10 years down the road when there are no taxpayers left for these massive bills. Nuclear will be a great option as baseload energy to complement the new homes being built with solar on them. I think the US will start planning on adding a lot more in the next 5 years, and many of these could take another 10 years to fund and build.
- Mining efficiencies. From what I had read, 1/3rd of gold production costs are energy. Diesel to dig and move things. I get it. What if what I write above with solar powered battery operated trucks happens? Could that reduce the production costs by 1/3rd? Maybe – but 10+ years from now, that also means the grade of a gold for strip mines that are now .5 gpt might be .25gpt and that might mean you need twice the energy to extract the same amount of gold. Point is that higher energy costs and degrading mine grades could lead to advancements in green energy and robotics. What if new technologies with magnetics and satellites could identify minerals better – so you know precisely where to dig, and how deep, so you aren’t drilling for 5 years before mining? With commodities, you see over years more efficient means of production. I would like to also extend these efficiencies to lithium, cobalt, nickel, copper, uranium, and oil. Imagine you are using a satellite with this special camera and you find 38 miles off of the coast of Texas the largest oil field in the world, but it needs to be 5,000 ft down. Perhaps then the better equipment and the energy ROI is solid for such a move. Just because we have degraded mines and oil wells now, doesn’t mean efficiencies and technology won’t exist 10 years from now to replace what we are using today.
- Productivity efficiencies – I’ve worked in a lot of factories in my career. In college at Dana Corporation where they made car parts from steel as a security guard and then a book binding plant. I worked at Harley Davidson production plant in IT. Voith Siemens Hydro in making turbines for hydro plants. All of them had massive power usages. But just like your refrigerator getting more efficient, production becomes more efficient. Perhaps less plants to do the same work? Machines that use less energy? 1/10th the employees? Solar on office buildings? Window efficiencies? HVAC advances? Giant office buildings closing for telework where each person has solar on their roofs and batteries. I think in 10-30 years, we will be even more efficient and using less energy. You cannot assume industry will just grow and take that energy consumption with it.
- The city of tomorrow. I don’t know about you, but I spent many hundreds of hours of my life playing SimCity. I can tell you that in the near term, cities are about to have real serious problems. You will see most major cities go through serious issues. I believe out of these ashes will come a renaissance of new cities that will be pretty green and efficient. I think the 100 story skyscrapers will be gone. I think in their places will be 3 story apartment buildings with solar, geothermal, and lots of nuclear power. I believe mass transportation will be much better, as a lot of these cities will be gutted block by block. The city of 30 years from now will be super efficient with power usage. I believe there will be no ICE cars anywhere near them. Factories will outline the cities, with easy transportation to any job. Cities will attract people based on food, entertainment, and jobs which require hands on work. Those who live in suburbs may be things like IT people, writers, accountants. Those in the suburbs may not need to drive to the office, like ever. Those who live in cities will most likely be those that work with their hands and need to BE at work. In this type of scenario, very few people will need to be driving, and those that do within 30 years will all have EVs that are charged from their solar roofs and batteries.
- Battery efficiencies. I think we are in an age that’s going to change the world for the next 500 years. I’m not talking about taking a space craft to Jupiter. Some of the most important inventions, EVER – Gutenberg’s printing press, which allowed knowledge to be rapidly transferred in books. Next I have steam engine. The telegraph. Then combustion engine. Then nuclear fission. Then microchip. Then internet. I feel the next great leap in humanity is the ability to store significant amounts of power for long periods of time, in an energy-dense way, for cheap. We aren’t there yet, or we would have battery powered trucks mining today. I feel the work Tesla and others are doing for EVs is ground breaking – however, imagine when you can design batteries the size of a shipping container that could store megawatts of power alongside a hydro dam. The hydro dam never cuts back production and excess stored in batteries. The next day at peak usage, power is drawn from the batteries to complement the hydro dam. I feel that someday, inside 30 years, there will be something that makes Lithium Ion look like the telegraph. IF we can create this battery, then there will be no need, ever again, for coal, gas, or oil. We still may need oil for plastics and a million other things, but usage as a fuel could disappear.
- De-population. I dare say it, but I think the rate of the world having children may be slowing. I wrote about this above, but imagine 30 years from now where many people have died off, but many of these people also never had children. Or had one. They aren’t being replaced. Certain countries may have significantly higher growth rates, but a lot of the western countries are having children far less. I first heard about this over a decade ago about Japan. Now 30 years of a “one child” policy in China is taking a toll. In the US, we have all kinds of baby boomers retiring, but many didn’t have a ton of kids. I’m 45, and I cannot believe how many people I know between 40-50 who have no children. Many waited until much longer to have them. My youngest is 16 months old. I was 44 when he was born. Love the little guy! But my grandparents were married at 18. Their parents married even younger. There’s more distance now between generations – which may have been 20 years, but now are more like 30-35 years apart. My overall point of this is that with EVERYTHING you see above, there’s a possibility 30 years from now we have about the same or less people on the planet. All of these people thinking we might double population in that time, might be off. Assuming we have 8 billion people now, and perhaps 10 billion then, it’s a 25% population gain. However, given everything I wrote about above, we could have 50% less energy usage. This means we may have 10 million people, but use the amount of energy 5 million people do today. I do not call that an energy cliff.
Conclusion – I could be wrong?
How could I be wrong? Many thousands of ways. The big thing, as Steve points out, is enough raw materials for things. You just might not have enough cobalt/nickel for the batteries or silver for the solar panels. If you go by battery tech of 1978, we could not have cell phones today. Over time, technical advances increase energy density into batteries. My bet is over 30 years, lots will happen with battery tech. I think this is the moon landing of my lifetime. That’s how important I think battery tech is to civilization.
I also believe that higher prices may force people at the home level into solar – so much that if my industry goes away that is a sector I want to get into as a backup and make a killing on commissions over the next 5 years. Steve also puts out great research about silver that remains and how the grades have gone down significantly. What Steve might be missing is that things like silver are plentiful above ground, it just needs the right price to unlock it. At $23 silver, you are not selling grandma’s candlesticks. However, at $100 silver, you are selling grandma. There is about 5 billion ounces in investment silver in bars, coins, etc in banks and homes. There’s 25 billion ounces in silverware, electronics, stretchy pants, mirrors, etc. Then there’s 30 billion at the dump in TVs, band aids, etc. We won’t run out of silver. Prices will just go much higher to unlock home silver. When that gets low, price will go even higher to unlock the 30 billion in dumps. Recycling tech over the next 30 years will also be amazing. My guess is people will take machines into dumps and things will be shredded, chemicals added, and metals will come out in a solution and then the solution will be further processed to get the gold, silver, and copper out of it. It’s not economic at today’s prices, but $300-$500 silver 15 years from now might change this. $10,000 gold could also do it.
I believe once we have all of these amazing batteries made, and solar panels on roof tops, we will also have a ton of raw material mined and converted from candlesticks so that these items can be recycled at end of life. Meaning, we might have a need for 20-30 years of getting what we need, however we can, but once we get there – it’s possible we might then be reducing the needs of raw materials we need to mine, as recycling will play a massive part in production of this stuff going forward.
For example, if we are running deficits of about 100m oz silver today, and we 4x the need for solar panels, that takes yearly demand from 100 to 400m oz for photovoltaics. That then puts us at a 400m oz deficit. If we just raised price to $50-$100, we might unlock a good amount of the silverware and candlesticks. If we can unlock that 25 billion ounces, that could sustain us for 67 years. This is not counting the extra silver needed for EVs. OK – let’s add another 300m per year. That’s a 700m oz deficit. If price of silver is $100 and unlocks all of that, you are still looking at 35 years until we exhaust that. That’s before we even look into the dumps for recycling – now we are talking $200 silver. The silver used in most products is so small that it is tiny compared to the price of the product. So, there’s a lot of room to unlock supply down the road, if need be. IF we got to a point where we unlocked 20b of above ground supply – that could then be recycled down the road along with the 30b in the dumps.
Anyway – my point is here that we COULD run deficits on materials like copper, silver, cobalt for a period of time, but this triggers shortages in supply, at that price, and you need to go mine more or pay people a ransom for what they have.
As Rick Rule likes to say, “Either the price goes up, or the lights go out, and I’m betting the lights won’t go out”. Unless you live in California.
So I think Steve has a lot of great information about the downfall of a lot of these civilizations – especially how they may have invaded a country for the wood. Amazing. However, I think this cliff he’s discussing has a lot of ways not to happen. The problem is real, but I just see it playing out differently when prices start going parabolic with your power bills. The lights go off, or you are buying solar.