09/23/2013 03:44 pm ET Updated Nov 20, 2013

Do You Know the Rule of 70?

One of the most
important things I have learned from going to Association for the Study of Peak
Oil (ASPO) conferences is "The Rule of 70."

The Rule of 70 tells
you the doubling time of anything that is growing at a compound rate. For example, China's
economy is growing at 7 percent a year. How many years will it take for its
economy to double?

Seventy divided by
seven percent per year tells you that in 10 years, China's economy will double.

Once you know that, you can start to
ask the questions: Will they have enough oil? Where will it come from? How
about water? Etc. 

Professor Albert
Bartlett, an advisor to ASPO until he passed away this month, said that
the biggest shortcoming of the human race is its inability to understand this exponential function.

From the blog Resource Insights:


Albert Bartlett: On message about exponential growth to the end

Albert Bartlett might have been another obscure physics professor had he not put together a now famous lecture entitled "Arithmetic, Population and Energy" in 1969. The lecture, available broadly on the internet, begins with the line: "The greatest shortcoming of the human race is our inability to understand the exponential function."

The logic is surprisingly simple and irrefutable. Exponential growth, which is simply consistent growth at some percentage rate each year (or other time period), cannot proceed indefinitely within a finite system, for example, planet Earth. The fact that human populations continue to grow or that the extraction of energy and other natural resources continues to climb does not in any way refute this statement. It simply means that the absolute limits have not yet been reached....

"...exponential growth in the consumption of finite resources is unsustainable. At some point growth in the rate of extraction will cease. And, given the dependence of the economy on continuous growth of resource inputs including energy, this leads to instability and finally decline."

Read the rest

The message: Compound
growth of a finite resource is, clearly, not sustainable.

This is why the Big Island should
be using our geothermal resource for energy, and technology instead of oil in

Since the Big Island will be over our geothermal "hot spot"
for 500,000 to a million years, we can view geothermal energy as sustainable.

Let's say the State's
Employment Retirement Income Security Act (ERISA) needs an annual return of 7
percent. That means its money will need to double in 10 years. How?

How about Hawai'i's
economy doubling in 24 years? That would result from a compound growth of just
3 percent. Would we need double the number of hotel rooms? But if the price of
oil keeps rising, can we do that?

These are important considerations.

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