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$100 Trillion Shift From 'Just-In-Time' To 'Just-In-Case'

Bill James profile picture
Bill James


  • The $100 trillion shift, 40-year shift in energy and transportation markets from "Just-in-Time" to "Just-in-Case".
  • "Just-in-Case" indicators are: Saudis announce $2 trillion "post-oil era" fund; China announces $50 trillion solar effort; JPods and Hyperloop make progress for solar-powered mobility networks.
  • Fracking is the subprime of energy - energy neither the industry nor the consumer can afford.
  • US Oil peak oil was in 1970. Since US peak fracking in June 2015, oil production is down half a 1973 oil embargo. And will continue to decline until collapse.
  • Energy need is to power the 365-day food cycle; the 33.8 Days of Supply is 91% risk, not a "glut".

I do not know if the precise number is $100 trillion, but that it is well above $57 trillion is clearly stated in US need, Saudi and Chinese declarations.

This article provides indicators of a $100 trillion market shift from "Just-in-Time" to "Just-in-Case" in transport/energy investments. Based on the "Extra Energy Tooth" following US peak oil in 1970, this will push all energy prices higher for 10 years:

  • Saudi Arabia announced a $2 trillion to their "post-oil era" fund.
  • China recently announced a $50 trillion plan to deploy solar and wind energy networks.
  • The American Society of Civil Engineers Report Card on Infrastructure grades the US with a D+. They estimate investments of $3.6 trillion are required.
  • "Reed Hundt, former chairman of the Federal Communications Commission, compared the switch from fossil fuels to clean energy with the 1990s transition from analog technology to digital technology - ' a feat that took more than a trillion dollars of U.S. investment during a period of eight years. If we invested that much money in clean energy, he argued, we could similarly transform our energy system in the next eight years.'"
  • The Physical Internet® will be built to change urban mobility. My guess is this market is about $5 trillion in the US and $25 trillion in the world. See payback in the Physical Internet section.
  • In October 2015, 193 nations signed the Sustainable Development Goals.

The current "Just-in-Time" market psychology is focused on improving inventory turns to minimize costs to the oil companies and prices to customers. It pays little attention to the risks of outages.

The "Just-in-Case" market psychology is focused on minimizing risks of supply disruptions.

The sections ahead in this article illustrate Productive Paranoia, Syria's "Just-in-Time" failure, "Just-in-Case" efforts, the hubris (excessive self-confidence) which delayed US action for 46 years, charts providing technical indicators, and triggers for psychological

This article was written by

Bill James profile picture
Bill received a BS in 1972 from West Point with concentrations in math, physics, chemistry, and engineering. He was an NCAA All American Wrestler and captain of the wrestling team. He is an eight-year infantry veteran, Airborne, Ranger, Arctic Light and Mechanized Infantry in the United States Army. His industrial experience started in 1980 with working for Honeywell for six years setting up manufacturing capabilities around the US and Europe. In 1986 he founded Applied Statistics to develop and sell the software, electronics, and tools to implement Statistical Process Controls for manufacturing processes. In 1989, he founded JITCorp to create the software to clarify and proactively manage the selling process. JITCorp’s principal products are WebClerk and CommerceExpert. In 1998 he began working on the patent for applying distributed collaborative computer networks to improving the mobility process (6,810,817). JPods LLC was founded to implement the re-tooling of transportation in the niche of highly repetitive, commuter range transport of people and cargo with payloads less than 1200 pounds. Bill is the author of Desktop Hosting, A Developer’s Guide to Unattended Communications (http://search.barnesandnoble.com/Desktop-Hosting/Bill-James/e/9780471207672&prid=9780471207672&lkid=J15005220&pubid=K17117) (Wiley), which outlines technology and concepts for networking the supply matrix. He holds Patent 6,810,817, Intelligent Transport, which applies distributed collaborative computer networks to moving physical packets, a Physical-Internet™. Bill is married with grown children and is a runner.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

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Comments (31)

As one who feels I have some handle on the big picture, I find it refreshing to see an article that attempts to look at things as an holistic system. It is disheartening to see all the comments tearing it down. While the author may not be right on all that is presented here, he has thought beyond the next move ahead and one thing I am sure of is that we are about to see a leap just as stated in one of the comments above. When and how it will occur, and how much pain we need to go through to force it, I don't know but it will happen in the next one to three decades. As one that has lost a boatload on anticipating this revolution, I've been humbled into realizing that just because you can see a clear path doesn't mean you should invest the farm because the timing of the jump is ill-defined and will occur when the pressures of doing it wrong become so high that the dam bursts.
Bill James profile picture
Hi MegaSolar

I do not trade for exactly the reason of timing. The direction is fixed by the mass of logistics, the way tectonic plates move. That an event will trigger is certain, when it will trigger is uncertain.
I wish I'd taken a leave out of your book 11 months ago before the train wreck started.
The limit on the adoption of electrical power to replace fossil fuels in transport is simple: its the energy storage density, right now each gallon of fuel is simply a higher energy storage medium than any equivalent electrical battery. There is a great quote about how the only obstacle to the widespread adoption of the electric motor vehicle was the lack of a sufficiently capable battery, that quote was from 1910 if memory serves me. So electrical storage was and remains the limit some 100 years later. This is changing with new battery technologies (carbon nanotubes et al) and truly massive R&D globally but we are still some years away from batteries which can compete in every sense with a humble gallon of hydrocarbons. To use a computing analogy today's battery technology is somewhere like where personal computing was in 1975.
Bill James profile picture
Hi ghiblinewt

Energy storage is an issue that can be substantially side-stepped. Reduce the parasitic mass of the vehicle, and it requires a lot less energy. Hence less storage.
Bill, unfortunately, the energy density issue can't be sidestepped as its the limit on EV range, and indirectly its charge time and lifespan. Vehicle masses are already very low with modern high tensile alloys and Fibre Reinforced composites (FRCs) and polymers there may be a weight reduction possible on the order of 20-40%. Here is an article discussing the energy density issue which is a consequence of fundamental electrochemistry:

"A gallon of gasoline (roughly 4.5 liters) weighs approximately 6 pounds (less than 3 kilos), occupies a mere 230 cubic inches but contains the equivalent of 36 kWhs of electrical energy. For better or worse, this is the energy density standard to which the driving public has gotten accustomed over the years. Anything heavier, bulkier or with less energy density would be considered inferior, hence the main obstacle to popularity of PEVs.

Most current EVs use lithium-ion batteries that store no more than the equivalent of 16-24 kWh of energy in a single charge, short of the amount of energy in a gallon of gasoline. The Tesla, currently among the most powerful PEVs on the market, can store the equivalent of 53 kWh when fully charged. A subcompact car with a 10-gallon gas tank can store the energy equivalent of 7 Teslas, 15 Nissan Leafs or 23 Chevy Volts, according to industry sources."

So a gallon of gas is currently 7 times higher energy density than the state of commercial art Tesla, while probable mass savings maybe 20-40%. Remember the mass of the passengers can't be reduced.Energy density remains the limit on EV development.
Bill James profile picture
Hi ghiblinewt

The way to apply solar to mobility is to replace the networks. Here is a presentation to NJDOT.

As more people chose PHEV and mpg increase on all new cars, do more ride share services and use more public transportation services, the use of gasoline will decline. Once the price per gallon reaches $5 to $7 in the U.S. many will have no other choice but conserve. Once the EV charging network is in place many will chose the EV over ICE as it becomes more convenient and cost effective. The U.S. has plenty of natural gas and I know the ICE can be converted to burn it, it can be made into a liquid fuel. The people in the energy business will always provide us with the energy we need, we just may not like the price.
Lots of spare capacity. But it is based on the price of oil. Fuel or oil can be made from junk at the right price.
siliconhillbilly profile picture
Today, converting solar energy to a liquid fuel is the only way to "store" solar energy. That combined with a cost effective, portable fuel cell might just solve the problem. Oops, we don't have a good technology for the conversion process OR the fuel cell.

Electrical storage via electrochemical "batteries" is still far too expensive on a dollar/[total kWh] basis. High front end costs and unacceptable cycle life are the current state of commercially available systems. Notice that all larger systems announced are funded by guvmint money to some extent. That includes rebates and hidden taxes. I know of NO purely commercial EC storage systems.

But not to worry, the fedguv will set up yet another boondoggle and throw money at it to "fix the problem". The fedguv cronies will again do very well.

A true solution might be high temperature fission reactors producing H2 or some other product that can be efficiently converted to a liquid fuel. But fission reactors are BAD! Ask any greenie.
45Cal profile picture
LMT is working on that future technology as we speak.
Oppseee...there is another BAD company greenies don't want to hear.
Windwood Trader profile picture
Re: Free solar-

Don't worry- Congress will find a way to tax it.

45Cal profile picture
They sure will, it'll be solar and carbon tax! LMAO
change is the only constant profile picture

Like your investment idea about JPODS. Not sure about the rest. I think highly improbable and paradox are mixed up with your analysis. The former is unlikely to happen but possible, the latter is cannot be done at all. There is a subtle but important difference between knowing improbable and impossible. 100 trillion is a big number. Most people, most of the time can't tell impossible from improbable; and probabilistic from deterministic. That's why some things are called miracles; like $100 trillion of them. It could happen.

Taleb's work is the best example of this in finance. Its not a bad idea to plan for black swans, just don't invest with a calendar and have to pay a mortgage with the proceeds. The highly improbable is highly uncertain for many reasons. And all of them (reasons) become apparent only after its too late to change direction.
Bill James profile picture
I agree with Taleb that, "history does not crawl, it leaps". We are about to see one.
DigDeep profile picture
Free Lucas?
doubleguns profile picture
In less than 20 years, solar will be available to 100% of the global population for free!

Nothing is free. Who pays for the panels, installation, maintenance, transportation and manufacture. They do not fall from heaven like manna.

A thinking article but still lots of hopium included.
45Cal profile picture

TY for providing some down to earth common facts to our inexperienced child, Lucas.
Lucas_Wyrsch profile picture
Solar is free and available to everybody!

In less than 20 years, solar will be available to 100% of the global population for free!

No smogs, no health issues due to fossil or nuclear sources of energy
45Cal profile picture
Gezzz Lucas!

"Solar is free and available to everybody!"

No you have resorted to outright lying, please stop it while your behind.
Monsieur Greenbubbles profile picture
Free skin cancer! No charge, come back for seconds if you like.
bently profile picture
Good news, bad news ... Brokers are loving the resulting windfall in trading commissons as shorts and longs are pressured to go in and out. Meanwhile, the long-termers are still hesitant about the oppportunity cost of locking into the energy sector if things will be retreating. Exciting times for all. In aso far the opening looks good for UWTI. Anyone have a straegy for this one?
Bill James profile picture
I do not trade, but I do watch the TWIP inventory reports. My guess is as the 33.8 Day of Supply depletes (543 mb), at some point, fear will trigger. The "Extra Energy Tooth" demand (4 mb/d) following US Peak Oil in 1970 will be repeated as the Chinese and Saudis implement their plans. It takes a lot of energy to build $52 trillion in infrastructure.

DigDeep profile picture
Bill why will the 33 day supply deplete? or what time frame do you think?
Spot prices for any commodity is volatile as we've found out.
Bill James profile picture
It takes a lot more energy to maintain current infrastructure while applying energy to build new infrastructure. The Extra Energy Tooth is 4 mb/d for 10-years. To reduce 33.8 to 24 Days of Supply is about 150 million barrels. That is only 40 days. But it will take time to ramp to 4 mb/d, so it will take longer.
Nothing is too expensive if you need it.
45Cal profile picture
Yeah cruise27...
Like a tesla and an apple cell phone?
Want & need are two different things with two different price tags in
today's world.
45Cal profile picture
Very opinionated and speculative indeed.
Oil is a sure play for the next 30 years.
Think I'll buy more stock in my "finite oil" holdings.

BTW, how are your "solar" stocks doing lately?
Since you like to mention energy ETFs, how is your buddy TAN doing?
Opppseee... down -22.26% ytd!
Well that isn't putting food on the table, or buying your Tesla.
Good luck.
Lucas_Wyrsch profile picture
Doubt that oil is a sure play for the next 30 years dear 45Cal!

Solar will have won the entire energy game in less than 20 years is the opinion of some experts!

Not only solar at night but far more wide reaching solar technologies will make that all our energy needs will be costless!

Oil could go down to 5¢ per barril, it still would be more expensive than free solar!

Think and grow richt!
45Cal profile picture

Your comment is purely speculative, and mine is based on over 100 years of the crude oil industry. I don't doubt that there will be alternative energy sources in the future to replace hydrocarbons. The world is set up and depends on the best & most affordable source for now, which is hydrocarbon based fuel. Solar may or may not have it's day, but it can't be forced on society and industry before it's time.
Hello failed Solydra? What a HUGE waste of tax payer's money!

To put all your chips on the table and expose yourself saying that "solar will have won the entire energy game in less than 20 years", boarders on stupidity imo.

As it stands today, solar has ~25% efficiency rate. This is due to the fact of night, storms, and other factors that limit solar's ability to be 100% efficient, like hydrocarbons are. Sorry, but the "experts" you are quoting are 100% wrong, solar will NEVER be 100% efficient, this fact is due to the simple laws of nature.

Your own buddies on the green side are already raising concerns about solar panel farms. They're claiming they are harmful & unnatural the eco system as well as looking just plain ugly.
Don't blame me, I'm just the messenger to that fact.

So tell me, when are we going to have solar powered passenger & cargo jetliners that can haul several tons and go thousands of miles in a relative short period of time? LOL

When will we see your solar powered sea bearing super freighters? LOL

When will we see your all solar military? LOL

When will we see your all solar rockets and spacecraft enter and exit our atmosphere? LOL

When will we see your 'all solar environment' replace all the
beneficial byproducts and chemicals provided only from petroleum? LOL

We have to answer these questions logically, answer... NEVER!!!

Petroleum will be replaced one day dear Lucas, but NOT in our lifetime.
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