Monday, May 08, 2006

The peak oil transition: difficult but not deadly

There's an excellent article from the Economist on 'peak oil' reprinted at the Ecological Economics Blog.

The gist is that the peak is coming, but not here yet, and that it should be a fairly slow process rather than a crash: oil will become gradually more and more expensive as existing reserves slowly decline and become more expensive to extract. This means that adjustments, while not being easy, should be smooth: peak oil shouldn't create economic chaos.

What are those adjustments? As the price of oil rises, new, more expensive oil sources (eg, tar sands) will become economic, as will alternative fuel sources such as biofuels. On the demand side, more energy efficient technologies and practices will cushion some of the blow.


Rob Dawg said...

Understand; tar sands and shale oil and coal gasification are economical at SUSTAINED prices of $50-$60/bbl equivalents. That there is not massive crash program investment in these multidecadal supply sources is a clear indicator that current oil prices are not sustainable.

The US has extracted far more oil than was known to exist in 1975 yet has as many reserves today as they had in 1975.

The problem remains that any move away from dependence upon continued buying of $38/bbl oil at $70/bbl will be met with oil producers crushing the competition.

Peak oil is a fataly flawed geophysical theory. No, I'm not talking about dead dinosaur alternatives, I'm talking about economic recovery. On the margin we ran out of $10/bbl oil decades ago, $20/bbl years ago, maybe $30/bbl about now. We have hundreds of years of $100/bbl oil and at $150/bbl oil starts becoming a chemical/plastics industry curiousity.

HDZ said...

Thanks for the link. I have been so bombarded by the Peak Oil zealots in recent months that I needed some balance.

I don't want to get into a tit-for-tat argument about whether or not we have lots of oil (after all, the experts can't agree) but I do think that the Peak Oil argument is possibily less rather than more useful in helping develop more sustainable transport.

hmm. I feel an article coming on :-)

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