I saw that site a few days ago. The scary thing about the peak oil theory is that oil production is supposed to peak in 2005. I prefer my doomsday senarios to be a little further out please.
I believe that's the one that prof goose is contributing to. He comments here sometimes and has an anonyblog, which was getting increasingly focused on oil until he moved those contributions to the oil drum. He's a poli sci professor at some research U. Second job, junior level.
I did a peak oil project with one of my classes this semester. I later met a GM engineer working on cutting edge engines and asked him if he bought the hubbert's peak argument and he said he did, completely. I asked if that was conventional wisdom at GM, and he just shrugged his head and said who knows what those people think.
I wonder if, in the 21st century, the world will be more concerned with the depletion of oil or the shortage of drinkable water.
I certainly don't have the knowledge necessary to judge whether the Hubbert scenario is upon us or not. However, I feel pretty certain that the powers that be in the energy industry know ALL about it, and I notice just how many of them are members of the Bush administration. Then I look at the rush to invade Iraq before the inspectors could prove they were not producing banned weapons, coupled with the 14 "enduring" military bases we're building there.
After all that, I pull my tin foil helmet securely into place and exclaim, "I'll be goddamned. It really was all about oil, wasn't it?"
After all that, I pull my tin foil helmet securely into place and exclaim, "I'll be goddamned. It really was all about oil, wasn't it?"
I think that will likely be the judgment of future historians, who no longer have to compete with an endless soundtrack of "USA! USA!" Resources are an embarrassingly common reason for great powers to invade other countries.
I am suspicious of doomsday claims about oil. I'm not sure how our usage of oil breaks out (driving, heating, etc.), but when the price passes the right point, we'll start looking for substitutes. Maybe we'll get more public transportation. Maybe we will all have to live close enough to work to justify existing city housing prices. Maybe we'll stop pretending that people who live in rural areas are worth whatever trouble we've gone through to date. Maybe alternative fuels actually get used. Maybe we'll revenge ourselves on those SUV motherfuckers (OK, not a substitute, but clearly a silver lining). But European gas costs a lot more than ours, and they've managed to keep on keepin' on.
Oil is much more than just filling our cars' gas tanks, though. Our entire economy is based on moving goods in bulk across long distances, so increased gasoline prices equal increased almost everything prices. Also, plastic, which is petroleum-based, is one of the main materials in nearly everything now.
It's a wise policy to be suspicious of doomsday claims in general. However, unlike, say, the Y2K scare, this one isn't a matter of if, but when. Only so much of the stuff in the ground that we can extract.
Maybe we'll get more public transportation. Maybe we will all have to live close enough to work to justify existing city housing prices.
Also, these are not insignificant maybes. As I understand it, for instance Phoenix (the sixth largest city in the US) has to cease to exist in its current from.
I'd love more public transport and people living closer to work, because I like walkable cities, but this would be a not insignificant adjustment.
Thanks for the link, ogged. :)
Apos: I have been using Y2K as an illustration quite a bit...because that's what the whole peak oil thing feels like. your point is well-stated that it's not...peak oil, if one accepts that there is one pie's worth of the stuff, is going to happen sooner or later. the real controversy is when, and that's where we've been spending a lot of our time lately, especially on the Saudi fields...because they've said they would raise capacity about 5 times over the past year, and they are really tangibly yet to do so. and why wouldn't they make as much money as they could if they could do so? because the big fields can't squirt out anymore.
oh, after researching this stuff (the same info that the admin had), I have no doubt that Iraq was about oil, and probably to the Bush admin, this was a benevolent act to try to preserve our way of life, yadda yadda yadda. (My tin-foil hat has velvet on the inside, I've been wearing it so much lately.)
SCMT: your point about Europe is true, but remember...the difference is mostly tax. I believe the European average right now is around $4.50, of which around 60% is various types of taxation. While Europe can lower its tax a little bit to compensate as the price in the market goes up, they have grown dependent on the gas taxes for infrastructure and other redistributive policies. That means if prices go up, they are going to have even less flexibility to deal with it than we are in many respects.
To ogged's other point, I am a political science professor and my partner (Heading Out) is a mining engineer. I've been doing various reading on this for about a year, but it's only in the last few months that I've really been voracious about it. HO's been thinking about it for a very long time and has knowledge on both the policy and extraction angles.
but when the price passes the right point, we'll start looking for substitutes.
yes, but changing entire industries does not happen at the drop of the hat, usually innovations percolate for years before there's a massive shift in usage.
more public transport would be great! how long did it take to plan, fund, and build the last major project in your area?
I think this is the point of the more measured books in this area - like "out of gas" by some caltech physics guy. There are substitutes, but it's going to take a hell of a lot of work and pain to get them in place. A bit of anticipation could go a long way. Yesterday, DeLong mentioned a Goldman Sachs report predicting a "superspike" in oil prices. These are the kinds of shocks that destroy businesses that might have survived a more gentle transition.
CW: one of the parts of the argument I agree with Savinar (http://lifeaftertheoilcrash.net, but he's a tad alarmist for even my tastes) on is the lack of scalable and trasportable alternatives to petroleum products.
I mean when you think about everything petroleum goes into (just to rattle off a list, heat, pesticide, plastics, transportation, ergo, food, technology, etc., etc.), you have to start thinking about articles in daily life in terms of barrels of oil! (I ran across a conversion chart somewhere at some point, I'll try to find that, but it had equivalents of computers=10 bbl of oil, etc., etc.). There are no materials that could substitute.
In sum, preventing an oil crash would require an unprecedented amount of cooperation and policy development and coordination from the US government. Sadly, I don't see that happening with this current administration until the train is already upon us. I guess that's why I am trying to talk more and more about this, so that we can, at least among some of us, soften the blow and prepare.
I'm not an expert on oil, but I was lucky enough to get a copy of the "superspike" report (it's not what you know, it's who, etc etc)... my understanding of it was that the superspike, while it'll look really scary, will be transitory, and the real concern is that medium to long-term oil prices (say between here and 2010) will be in the 50-80, and not the 20-40 range we were looking at 5 years ago.
So while the "superspike" will be great fodder for local news stories, it's not affecting the way GS plans to value oil companies (which is what the report is really about), and shouldn't affect how we plan to diversify our energy base.
a couple of things Mike...if you standardize the prices of the 1979 oil crisis in today's dollars, a bbl of oil would have been about $80/bbl today, with the equivalent of about $3.20ish a gallon of gas. ($3/gal is the number where inflation really starts getting short-term unmanageable.) The Bush admin has admitted that it's been planning an economic doomsday scenario for $4/gallon of gas (that's around $100/bbl...which just happens to be the number in the superspike report as well).
the real point of the Goldman Sachs superspike report was this:
we depend on about 4.4Gb of imports a year...our biggest dependency is on:
Canada 584 (Mb/y)
Mexico 584
S.Arabia 548
Venezuela 475
If you think about it, even a small disruption in the supply chain (a refinery explosion, etc., something that even a small terrorist attack could cause) could have a dramatic influence on price. You can see how a .5 Mb/day decrease would really screw things up, that adds up to 182.5 Mb...and out of 4.4 Gb, that's enough to create a supply bubble that raises prices dramatically...especially in an era where Chinese and Indian demand for oil is growing exponentially...and will not slow down for anyone.
If we are indeed at peak oil, and there is no more supply capacity possible, and demand continues to grow...well, I will assume that most of the readers here have had econ 101...prices go through the roof and economies/ecologies change fundamentally...
by the way, the source on those oil import numbers is the US DoE.
ProfGoose, price is senstive to a disruption of output, but how long-term would those disruptions be? The impression I got from the GS report (and guess what I'm going to reread tonight, to make sure I understand it...) was that a disruption would result in a jump in spot price, but the (say) six-month average wouldn't be affected. Kind of like the jump we saw at the beginning of Gulf War I, which quickly settled back down to pre-war levels.
Mike, you wouldn't be wrong if the supply were continually increasing as it has been over the past 30 years to meet demand. But that's the first domino to fall.
Think about the ramifications of one price blip in an environment where states know supply is falling...they would begin to behave like addicts devoid of their crack, would they not?
...so, if the arguments about the timing of peak oil are correct (and that's probably the biggest controversy in all of this: when is the peak? (and will we know it beforehand?) was it yesterday? is it tomorrow? is it in 10 years?), supply is at best static if not on the way to decline. Combine this with ever-increasing demand from not just the US and Europe, but a even more quickly-growing India and China, and you have the recipe for a real jolt to the American lifestyle, if not a complete change to the American economy in relatively quick fashion.
Also, Kuntzler's piece (that ogged put a link too) prima facie seems like a multivariate house of cards that has to have a perfect scenario to take place...but if you look at the logic and time/path-dependence of the variables, the whole thing really looks sadly inevitable...
In the past there has been a reserve, that an increase in the price of oil justifies producing. The increase in flow that then occurs drops the price, your basic economics lesson brought to life.
Right now that is no longer the case with oil. There is no longer a reserve that can be brought on line to meet the growing demand for more than another couple of months or so. Suddenly economics meets geology. If you want to bet on Chairman Greenspan's interpretation I have only one, trivial, question - where is the extra oil coming from?
Oh, and the difference between now and in the past is that this is now an absolute situation, rather than a transient one.
I think the two of you make a lot of very good points, but you need to add the all-important caveat: we may be running out of oil (although no one actually knows when peak production will be), but we are not running out of energy.
There are many alternative sources of energy out there that are not currently used because they are uneconomical. Raise crude prices to $80 or $100/bbl, and a number of them start looking pretty attractive (tar sands, oil shale, biomass, geothermal). The US is a little tricky, since oil is largely used for transportation, but there's still plenty of capacity to replace gasoline with ethanol, for example. You'd probably also see natural gas taking a bigger share of the transportation sector. All the suckers with oil heating (like me) would switch to a different fuel.
Energy prices overall would be significantly higher than they are today, but there wouldn't be an unstoppable, spiraling increase. After all, there will still be many billions of barrels of oil produced each year for decades to come, so it's not like we'll need to switch out of the fuel overnight. We'll just need to increase efficiency and find alternative sources of energy for certain applications. Incidentally, I think the US is better positioned to handle high oil prices than are many other countries.
Peak production is certainly a problem, but it's likely a manageable one. That's probably more than can be said about global warming.
"I wonder if, in the 21st century, the world will be more concerned with the depletion of oil or the shortage of drinkable water."
Given what we have seen of the 21st century so far, I suspect both the Catholic church and the Republican party will be more interested in the vital questions of what is the holiest way people should starve to death, whether it counts as contraception if a woman is so malnourished that she can't have periods but she still has sex, and whether god wants Americans to kill all brown-skinned people, or only the uppity ones.
Something tells me that this is not a good sign.
Well, it's a good sign in the sense that it might do some good, and certainly can't hurt. It does suggest that lots of people are taking this oil peak thing seriously.
Aren't the days during those months short enough that this will just move the energy use from the evening to the morning? But I guess you're right - at least that wouldn't hurt.