# A Crude Awakening: The Oil Crash **URL:** \ **Category:** Great Debates\ **Created:** [June 8, 2007, 12:55am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205 "2007-06-08T00:55:41Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 9, 2007, 3:47pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/41 "2007-06-09T15:47:04Z")
Here’s a doom-and-gloom scenario from [_The City in Mind,_](http://www.amazon.com/City-Mind-Notes-Urban-Condition/dp/B0000C2W6A/sr=8-1/qid=1166738461/ref=pd_bbs_1/002-9788122-0265632?ie=UTF8&s=books) by James Howard Kunstler, chapter on Atlanta, pp. 73-75: > [@](#): > > A current popular belief in America is that “alternative fuels” could replace gasoline in the vehicles we use and that the system could merrily roll along without petroleum as if nothing had happened. This a dangerous delusion. The truth is that no known “alternative technology,” including hydrogen, fuel cell, electricity, nuclear, or alcohol from biomass, can take the place of gasoline in the way we have organized our lives, especially where cars and trucks are concerned. None of the touted alternative fuels is as versatile as gasoline, or can be produced for anything close to the cheap price of gas we’ve been accustomed to, or can be stored or transported as easily. The electric car is not going to save Atlanta. > > * * * > > I believe the world is entering a long era of chronic instability in oil markets that no amount of wishing or pretending will hold back. By the time this book is published – a year from now – I shall be surprised if we are not experiencing the initial effects. The two oil-producing regions that allowed America to postpone this reckoning for twenty-five years, the Alaskan North Slope fields, and the North Sea fields (belonging to Britain and Norway), are scheduled to pass their production peaks this year, and after that, most of the oil in the world will be controlled by people who don’t like us, or contained in regions too chaotic to engage in the complex business of oil extraction. The Middle East regions containing the greatest reserves will be the last to peak, but long before they do, the oil markets will destabilize. In the current American mood of narcotized inattention, the point can’t be emphasized enough that it is not necessary for oil reserves to run out before world oil markets are severely destabilized. And when that occurs, industrial economies will be painfully compromised. > > We Americans cherish a set of delusions to minimize or deflect the seriousness of this. As already touched on, we believe that we can run a drive-in civilization on some fuel other than petroleum. The actual prospects for this are dim, but we base our belief (a wish, really) on the spectacular cavalcade of technological achievements that occurred in the previous century, one astonishing novelty after another: airplanes, movies, radio, TV, antibiotics, Teflon, computers, automobiles themselves. (The lingering “victory disease” from our great triumph in World War Two still stokes our delusions of invincibility.) Alternative energy sources such as natural gas, biomass, coal, nuclear power, solar power, fuel cells, and so forth, will fall far short of compensating for disrupted oil markets. It will be a hard lesson. The world’s fleet of eleven thousand jet airplanes will not run on coal or plutonium. Massive disruptions to transportation and business will occur. The “global economy” as touted in recent years – meaning the long-range transport of enormous quantities of cheap goods virtually everywhere – will join mercantile imperialism in the history books. Food production, which depends heavily on oil-based fertilizers, will be affected by oil market disturbances. The Caesar salad that travels twenty-five hundred miles from California to somebody’s table in Atlanta will become an object of nostalgia. Farming will have to become much more labor-intensive, will have to be practiced on a far smaller scale, and done much closer to market. Half a million other products, from medicine, asphalt, paint and detergent to plastic trash bags, are also derived from oil. As the oil markets destabilize, shortages and fluctuating prices in oil will hinder industry from even addressing the problem of converting societies to other forms of energy. On the bright side – Peak Oil might save us from Global Warming! 🙂 (My observation, not Kunstler’s.) ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 9, 2007, 3:49pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/42 "2007-06-09T15:49:33Z")
[QUOTE=Tully Mars] I know how to plow with a team of horses; I’ve done it before. Do you? [/QUOTE] Well, yes, as a matter of fact . . . Oh, wait. You said, “plow **with** a team of horses.” Never mind. ---
**Author:** ![Least\_Original\_User\_Name\_Ever](https://avatars.discourse-cdn.com/v4/letter/l/e480ec/32.png) [@Least\_Original\_User\_Name\_Ever](https://boards.straightdope.com/u/Least_Original_User_Name_Ever)\ **Post date:** [June 9, 2007, 3:56pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/43 "2007-06-09T15:56:33Z")
[QUOTE=Renob] I haven’t seen the movie, but I’ve heard similar ideas advanced in a few different places. Anyone who thinks the movie has a point has a very weak grasp on history and economics. Will oil run out one day? Sure, but so what? As prices increase there will be incentives for others to develop new energy options. It has happened in our past as we moved from using coal or whale oil to petroleum. As far as running out of oil, just read this article and see how ludicrous these claims are: [Home - CEEPR](http://web.mit.edu/ceepr/www/R2004-171.pdf). As the article shows, people have been thinking we’re running out of oil since the 1800’s. We haven’t yet, so I’m not too worried about it. [/QUOTE] This may be true, but wouldn’t you at least want to spend some brain power thinking about it? I’d assume that, because there’s no incentive, that’s why we’re still living in an oil-driven world. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 9, 2007, 4:30pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/44 "2007-06-09T16:30:06Z")
[QUOTE=Tully Mars] But throughout human history, the human species has shown a remarkable ability to adapt, to invent, and to overcome. Here’s a quick list of the formerly **known** as “impossible”. [ul]Traveling faster than 25 mph.[/ul] [ul]Traveling faster than 100 mph.[/ul] [ul]Traveling faster than the speed of sound.[/ul] [ul]Setting foot on the moon (the dust will explode under pressure).[/ul] [/QUOTE] Don’t forget [perpetual motion.](http://en.wikipedia.org/wiki/Steorn) ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [June 9, 2007, 4:31pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/45 "2007-06-09T16:31:31Z")
And in contrast to Kunstler, who offers no proof of any of his assertions, we have the financial markets which set the price for oil futures. This price represents the aggregate thinking of all the people involved in the oil business, and such prices have been proven to be the best forecast we have of what prices of commodities will be in the future. Guess what the futures price is for oil to be delivered in 2015? $68/bbl. That’s about $3/bbl more than the price of oil today. If Kunstler and the rest of the peak oil fanatics really believe what they say, why aren’t they loading up on futures contracts and driving the price up? For that matter, if their opinions are shared by leading experts in the field, why aren’t hordes of people buying up these cheap futures and driving the price up? Hell, if the Saudis know something we don’t, why aren’t THEY investing massive volumes of their own cash into oil futures they know to be grossly underpriced? You can always find fringe authors who have a pet theory that they are pushing. The longer they push it, and the more books they write about it, the more vested they become in seeing it be true. They can’t admit an error, or their standing as a futurist and author is in jeopardy. So they soldier on, with increasingly thin excuses for why their predictions have so far not panned out, and claiming credit for any changes that even remotely resemble those predictions. It’s the same old snake oil. In the meantime, his claim that there’s no other energy source that will take over where oil leaves off is currently true - but we don’t have one energy source. We have many. You won’t see an all-electric car fleet, or all-hydrogen, or all-bio fuel. You’re going to see a mixture of vehicles. Hybrids, plug-in hybrids, ethanol powered, LNG, regular gas-powered cars but much smaller and more efficient, all-electric vehicles, etc. As usual, people like you and Kunstler tend to think that we need a grand plan or strategy to ‘fix’ the problem. But the market will fix it just fine - just in unpredictable ways. Which technology will win out? Maybe all of them. Maybe the new transportation infrastructure will be much more fragmented than it is now. But basically all the alternatives will duke it out in the marketplace, and the winners will emerge when consumers decide what they like. Maybe we will all be driving electric cars. Or maybe they’ll be bio-fueled. Or maybe we’ll have both, just as we currently have vehicles that run on gas and diesel. But we know there are alternatives. We can see them just around the corner. We KNOW we can drive electric cars if we have to. No one wants them today because they have poor range and are expensive. But since we know we can build them if there is no alternative, then it’s ridiculous to posit an alternative future in which we have no way to get around and our economy collapses. Because electrics are preferable to THAT, and we know we can build them. And looking at the futures price for oil, we know that our best guess for the future is that we’ve got at least 10 years before prices start to dramatically change. That’s enough time for the auto fleet to completely flip over to something new (the average life of a car is about 10 years). If peak oil is true, we’ll see it coming. We’ll see it in the future’s markets. We’ll see it in the investment patterns of oil companies. We’ll see it in the behaviour of governments. We’ll see it in current prices - if the futures price signals a rapid reduction in supply 10 years out, that will drive up the price of current inventories so that the net present value of the inventory matches. That gives us a nice 10 year smooth ramp of increasing prices to make changes. In 10 years, we could build a thousand nuclear plants across the world if we had to. We could replace every new car with an electric or plug-in hybrid. We could develop millions of acres of land for production of bio-fuels. Here’s a little example of how prices stimulate demand for alternatives in ways the ‘futurists’ can’t and don’t predict: Here in Edmonton, geo-thermal energy is starting to become popular for new home construction. Homes have systems like [this](http://www.bchydro.com/powersmart/elibrary/elibrary685.html) installed. You sink a shaft 200 ft into the ground, and circulate fluid through it and back into a heat exchanget in the house. In the summer, the ground is cooler than the home, and the circulated fluid cools the home. In the winter, the ground is warmer, and the circulated fluid warms the home. The system still uses energy to run the heat exhanger and pump the fluid, but it’s dramatically less than a typical furnace/air conditioner. Five years ago, I’d never even heard of these systems for private homes, and I certainly didn’t consider geothermal heat as an option on the Canadian prairie. Why? Because at lower energy prices, it made no economic sense to consider such a system, which costs thousands of dollars to install and would never make its money back in energy savings over its lifespan. But now that energy prices are up, such systems become viable. If energy prices go up even more, such systems will become commonplace, dramatically lowering energy consumption across the country. And there will be many more such savings. Factories which chose high-energy processes when lower energy processes were available but financial unsound at 20/bbl oil prices will convert to lower energy production. Low-hanging fruit will be picked, buying us even more time. But Kunstler would have a hard time selling a book saying, “Don’t worry - we’ll have a solution, but I’m not sure what it will be.” ---
**Author:** ![Kimstu](https://avatars.discourse-cdn.com/v4/letter/k/ecd19e/32.png) [@Kimstu](https://boards.straightdope.com/u/Kimstu)\ **Post date:** [June 9, 2007, 6:49pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/46 "2007-06-09T18:49:39Z")
> [@Sam Stone](#): > > You’re right about that. I’m not saying there won’t be hardships. Of course there will be. Fundamental restructuring is always painful. The blacksmith industry was destroyed by the motor car. The telephone operator industry was wiped out by automated switching, and a large percentage of those operators were people who otherwise had no skills and couldn’t hope to find another job as good. > > The question isn’t whether some people will be hurt by a transition to alternative energy and transportation sources - the question is whether it will throw the world into a depression. Well, the painfulness of the transition is influenced by the number of people directly impacted by it. Yes, life was tough for the blacksmiths and switchboard operators when their jobs became obsolete, but even back then, most people weren’t blacksmiths or switchboard operators. Nowadays, however, most people (at least in the US) do drive cars. I don’t have the scrying chops to know whether rising oil costs will actually produce a worldwide depression, but I do feel pretty confident that they will negatively affect a much larger proportion of the population than the “blacksmith crash” or the “switchboard operator crash” did. > [@Sam Stone](#): > > As usual, people like you and Kunstler tend to think that we need a grand plan or strategy to ‘fix’ the problem. But the market will fix it just fine - just in unpredictable ways. Let’s not forget, though, that the “panic early” strategy is one of the things that help the market react to potential crises in a timely fashion. It’s when warnings like this start blipping on the popular consciousness radar screen that markets start to become receptive to early-adopter ideas about emerging solutions, and provide them with the initial support they need to increase their competitiveness. Let us not unduly despise even Chicken-Little-type “the sky is falling!” proclamations, for they serve as a useful counterweight to the normal human conservatism that takes the stability of the sky so much for granted that we might not notice right away if it **did** start to fall. ---
**Author:** ![RTFirefly](https://avatars.discourse-cdn.com/v4/letter/r/c77e96/32.png) [@RTFirefly](https://boards.straightdope.com/u/RTFirefly)\ **Post date:** [June 9, 2007, 7:56pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/47 "2007-06-09T19:56:43Z")
[QUOTE=T\_SQUARE] Well, like I said, I haven’t seen the movie, so if Simmons makes a claim like beef jerky is tasty, I can’t argue with him. In _general_ though: Simmons is a Wall Street type, and as a Wall Street type, he expects Saudi Aramco to operate like ExxonMobil. Since they are not doing that, he believes their production has peaked. Many economists, myself included, believe that the Saudis just aren’t too worried about it. They face absorption rate issues in the economy, and don’t trust themselves to sock any funds away for future generations untouched like Norway does. Furthermore, Aramco may be working with a \*downward sloping \* supply curve, at least partially. They have a set budget of roads, schools, gold Bentleys, etc., so when prices are high, they will work less hard to produce more. Imagine a kid shoveling snow to save for a new video game. If the rate he gets for a driveway doubles, it isn’t hard to imagine him doing half as many jobs, not more. Furthermore, Simmons, for his book, has interpreted a bunch of spotty and selective Aramco engineering data, which may be suspect. His qualifications to do so have also been called into questions, although I can’t speak to these claims. I have spoken to one of the few outsiders allowed into the Aramco bunker, and he claims Ghawar production is as claimed, unless the Saudis have gone to the trouble to install rigged flow metering equipment and the like. [/quote] What does your acquaintance say about the Saudis’ heavy reliance on the full range of secondary recovery techniques? To a nonexpert like me, this is the most persuasive set of facts Simmons brings to the table. If the Saudis are happy to make more by pumping less, then you’d think they’d save for later the combination of low-tech (pumping in millions of gallons of seawater a day into Ghawar) and high-tech tricks that they’ve been using to keep production high. Especially during the 1986-2001 period when oil was cheap. FWIW, I haven’t seen the movie either, and probably won’t; I’m just saying that if a lot of experts don’t think Simmons knows what he’s talking about, then there’s probably an expert rebuttal out there somewhere, and I’d really like to read it before I sink serious money into those oil futures that **Sam Stone** mentions. ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [June 9, 2007, 8:02pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/48 "2007-06-09T20:02:34Z")
[QUOTE=Kimstu] Well, the painfulness of the transition is influenced by the number of people directly impacted by it. Yes, life was tough for the blacksmiths and switchboard operators when their jobs became obsolete, but even back then, most people weren’t blacksmiths or switchboard operators. Nowadays, however, most people (at least in the US) do drive cars. I don’t have the scrying chops to know whether rising oil costs will actually produce a worldwide depression, but I do feel pretty confident that they will negatively affect a much larger proportion of the population than the “blacksmith crash” or the “switchboard operator crash” did. [/quote] I don’t have that confidence at all. Maybe as the rich people switch over to electric, the demand for oil, and therefore the price of it, will stay flat enough for the poor people to afford their cars. Besides, buying a 10 year old Honda Civic is not exactly an expensive proposition, and a car like that can easily get 30 mpg. In fact, it’s generally the cheapest cars that are the most economical. A small 1500 lb car with a diesel engine could get 50-60 mpg and sell for $10,000 or less. The poor in America can afford that. The people who may be hurt are the people in developing countries now who won’t have the benefit of decades of low energy prices to help get their economies started. > [@](#): > > Let’s not forget, though, that the “panic early” strategy is one of the things that help the market react to potential crises in a timely fashion. It’s when warnings like this start blipping on the popular consciousness radar screen that markets start to become receptive to early-adopter ideas about emerging solutions, and provide them with the initial support they need to increase their competitiveness. > > Let us not unduly despise even Chicken-Little-type “the sky is falling!” proclamations, for they serve as a useful counterweight to the normal human conservatism that takes the stability of the sky so much for granted that we might not notice right away if it **did** start to fall. Is there any evidence at all that people like Kunstler move the markets? Markets respond to prices. Alarmists have been saying that we were on our last dregs of oil since the 70’s, but that didn’t stop people from buying SUVs when oil was 20/bbl. I think you’ll find that buying behaviour in commodity markets tracks prices, and prices alone. Kunstler’s book could hit #1 on the best-seller list, and if oil drops back to $20/bbl, people will continue driving huge gas guzzling vehicles. If oil goes to 200/bbl, people will change their behaviour, and they’d do it if there were no doomsayers around. Besides, your point assumes Kunstler is right, and that he is helping drive ‘early adopters’ into the direction we all need to go. But what if he’s wrong? What if people like Kunstler scare us into thinking there’s about to be a huge energy crisis, and we change our behaviour accordingly - and then it turns out they were wrong? That would damage us. In the 70’s, people like Paul Erlich and the Club of Rome were the Kunstlers of the day. Back then, the problem was the ‘population bomb’. Dire scenarios were arrived at by drawing linear extrapolations from the then-steep slope of population growth. This actually did affect people. Some liberals chose not to have children, thinking they would just be contributing to the ‘problem’. Countries like China instituted population controls which had horrible unintended consequences. Well, guess what? Today’s big population worry is that populations will collapse in the 1st world. Birthrates are below replacement in many industrial countries. Japan is facing a huge population loss, and almost half of the population will be retired within 30 years. China’s one-child policy has had the effect of skewing births towards males, which is going to have serious cultural consequences over the next two decades. The big social security and medicare crunch would have been a lot easier to deal with had population growth not declined so much in the 1970’s. If people like Kunstler are just pulling arguments out of their ass, and they are as likely to be wrong as right, then all they are doing is injecting noise into the culture. There’s no signal there to benefit from. Of course, to some people, ‘peak oil’ scares are a good idea because they want people to behave as if we’re running out of oil, whether we are or not. That helps them pass funding bills for mass transit, scare people away from bigger cars, and in general have their political philosophy reinforced. But that doesn’t make Kunstler right. It makes him the equivalent of a doctor who writes a report saying that homosexual behaviour is dangerous. To a fundamentalist, it doesn’t matter if the report is true or not. It’s just another weapon in the arsenal. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [June 9, 2007, 10:08pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/49 "2007-06-09T22:08:45Z")
I never have understood these peak oil hair tearing arguments to be honest. There is more oil locked up in shale and tar sands (or methane hydrates for that matter) than there ever was in the biggest reserves in the ME…and yet folks are always frantic that we are somehow running out of oil and that our civilization is on the cusp of complete collapse. Hogwash. I’ve noticed that the people generally leaning toward the whole peak oil thingy (I haven’t seen the movie in the OP either btw, but I assume its the standard sky is falling arguments) are the same ones who are generally either opposed market based solutions or don’t understand how markets actually work (or in some cases both). To me, the irony is we are seeing alternative technologies emerging ALREADY…and they really have nothing to do with our running out of oil. They are starting to be driven more by concern with CO2 and GW than any non-sense about the oil running out. -XT ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [June 10, 2007, 12:57am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/50 "2007-06-10T00:57:10Z")
[QUOTE=BrainGlutton] That review says Huber is a fellow of the [Manhattan Institute.](http://www.sourcewatch.org/index.php?title=Manhattan_Institute) That does not, of course, automatically discredit anything he says, but it does, of course, automatically warrant careful skepticism. [/QUOTE] What sources don’t warrant careful skepticism? ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [June 10, 2007, 1:26am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/51 "2007-06-10T01:26:00Z")
> [@](#): > > It’s ridiculous. The author confuses having an oil shortage with having an energy shortage. Even if energy costs double, it won’t break the economy. And at double the current price, a whole slew of energy options become available: Nuclear, bio-fuels, wind, solar, geothermal, etc. We’re already building an electric-car infrastructure with hybrids. Plug-in hybrids powered by nuclear could average 500 mpg. > > There may be a period of heavy reinvestment in the energy sector as inefficient cars become obsoleted faster, factories and offices invest in lower-power technologies, major new construction of nuclear is undertaken. > > Over time, we’ll get good enough at using the new power sources that costs will come down again, leading to major economic growth. > > The economy has undergone these transitions before. The rise of the computer cut huge swaths through the old world economy. So did the automobile. 100 years ago, 50% of the population was involved in food production and distribution. Now it’s something like 4%. That’s a massive change to the economy. So we’ll have another one. It isn’t an issue of running out of all oil. It’s about running out of cheap oil. There’ll still be lots of oil it’ll just be too expensive to use the way we use it now. And economics tell us it’s real issue. First off, there’s the argument that as our current oil production methods become less economical, we’ll keep developing new methods. Maybe that’s true but it doesn’t make any difference to the bottom line - which is that oil is a finite resource. If we develop cheaper ways to produce oil we’re just speeding up the rate that the total supply is decreasing and making the overall situation worse. Secondly, there’s the alternative argument - that there are alternatives to oil that will work just as economically as oil. My rebuttal is where are they now? Let’s imagine what we want this hypothetical oil substitute to be - let’s call it “x-fuel”. We want x-fuel to be a product that you can operate a variety of small engines on; we want it to be relatively easy to produce and transport; and we want it to cost around a dollar a gallon (about the price that gas was ten years ago). So where’s our x-fuel? The stuff costs a third of what gas costs and we could tell the Saudis to kiss out ass. If I’m the guy that invents x-fuel I’ll be so rich I’d have Bill Gates programming my VCR for me while Jessica Alba nibbles on my ear. The market for this stuff is here and has been for years. But the reality is that x-fuel doesn’t exist and never will. The reason that gas is still be used is because even after it’s tripled in price it’s still cheaper than the alternatives. Maybe when gas gets up to five or ten or twenty dollars a gallon, there will be cheaper alternatives. But they’ll be cheaper than twenty dollars a gallon not cheaper than three dollars a gallon. If they were that cheap, we’d have already made the switch over to them. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [June 10, 2007, 1:57am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/52 "2007-06-10T01:57:56Z")
[QUOTE=Little Nemo] It isn’t an issue of running out of all oil. It’s about running out of cheap oil. There’ll still be lots of oil it’ll just be too expensive to use the way we use it now. And economics tell us it’s real issue. [/QUOTE] Why do you posit that oil will become ‘too expensive to use the way we use it now’? What do you base that on? Afaik, many of the vast reserves of, say, tar sands and shale oil become economically viable somewhere in the range of $70-100/barrel. This won’t exactly mean the EOTWAWKI or the destruction of our civilization, etc etc. What it MIGHT mean is that transportation costs for goods and products may rise…or they might not as fleets become more efficient due to economic pressures. In fact, this seems to be happening already as companies attempt to make their logistics fleets more fuel efficient while keeping their bottom lines as low as possible. Even if the price of goods and services dependent on transport DO rise, its not likely to force a major disruption in the system, or make things ‘too expensive’. [QUOTE=Little Nemo] First off, there’s the argument that as our current oil production methods become less economical, we’ll keep developing new methods. Maybe that’s true but it doesn’t make any difference to the bottom line - which is that oil is a finite resource. If we develop cheaper ways to produce oil we’re just speeding up the rate that the total supply is decreasing and making the overall situation worse. [/QUOTE] Sure…oil is a finite resource, no doubt. The question is when oil will become economically unviable as a major transport power and fuel source, and what will eventually replace it. Even if the price of oil doubles or triples it will STILL be a viable fuel source…and at those prices there are vast untapped reserves. My thought is that we probably will never use them…not because of economic reasons but become of social pressure to stop the use of hydrocarbons due CO2 emissions forcing alternatives due to market pressure. [QUOTE=Little Nemo] Secondly, there’s the alternative argument - that there are alternatives to oil that will work just as economically as oil. My rebuttal is where are they now? [/QUOTE] This is just silly. Where are they now? They are in development, some are out there now they are just not economically viable with the current price of oil. Raise that price (or see more social pressure on the market) and you will see several alternatives including biofuels, hydrogen, pure electric, etc. Not much of a rebuttal when you are well aware that there are viable alternatives out there today that are simply not in wide spread use due to the fact that oil is still cheaper…and the social pressures are only starting to roll wrt GW and CO2 emissions. [QUOTE=Little Nemo] So where’s our x-fuel? The stuff costs a third of what gas costs and we could tell the Saudis to kiss out ass. If I’m the guy that invents x-fuel I’ll be so rich I’d have Bill Gates programming my VCR for me while Jessica Alba nibbles on my ear. The market for this stuff is here and has been for years. [/QUOTE] This is like saying that the price of whale oil is rising…where is our x-fuel for our lamps and such? Until the price reaches a certain event horizon there is no NEED for the market to produce an alternative. When it DOES reach that point however…well, interestingly enough there were alternatives. Today there are several possible ‘x-fuel’ contenders. Which one will be THE alternative of choice? No idea (I wish I knew…I’d be rich in a few years :))…the price of oil hasn’t yet driven the market to SEEK a real, wide scale alternative. BTW, you are quite wrong…there really hasn’t been much of a market for an alternative fuel or power source. Look at the rather lethargic market for hybrids in the US until fairly recently. Then look at the much brisker sales of hybrids in Europe. Why do you suppose it happens that way…or that there is more interest in the US in hybrids recently? The price of oil in the US, adjusted for inflation, is basically dirt cheap…and so there was nearly zero interest by the wider public in any kind of alternative (or even in more efficient cars and trucks) here. Even today I’d say the interest is being driven more by people starting to become concerned by GW and CO2 emissions than it is by any real hardship or impact based on the price at the pump. Oh, we complain about it a lot, to be sure, but its not a major factor even now. [QUOTE=Little Nemo] But the reality is that x-fuel doesn’t exist and never will. [/QUOTE] :dubious: [QUOTE=Little Nemo] The reason that gas is still be used is because even after it’s tripled in price it’s still cheaper than the alternatives. Maybe when gas gets up to five or ten or twenty dollars a gallon, there will be cheaper alternatives. [/QUOTE] Exactly…and thats why the statement above this makes no sense. Several alternative ‘x-fuel’ contenders DO exist…and they will become economically viable once the price of oil reaches a certain level. Also, oil may become economically unviable not due to price but do to social pressure…also making some ‘x-fuel’ alternative more attractive even if oil is cheaper. [QUOTE=Little Nemo] Maybe when gas gets up to five or ten or twenty dollars a gallon, there will be cheaper alternatives. But they’ll be cheaper than twenty dollars a gallon not cheaper than three dollars a gallon. If they were that cheap, we’d have already made the switch over to them. [/QUOTE] Certainly…though I doubt that the price at the pump would need to get that high before some alternative becomes attractive. In fact, IMHO it will be social pressure, not some fantasy of the oil running out, that will finally force a switch to some alternative (or combination of alternatives) some time in the next decade or so. As with there still being plenty of rocks when the stone age came to an end, I think there will be plenty of oil when we move on to something else… -XT ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [June 10, 2007, 2:26am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/53 "2007-06-10T02:26:53Z")
[QUOTE=RickJay] What sources don’t warrant careful skepticism? [/QUOTE] The ones that support what you desperately want to believe, of course. For example, the Manhattan Institure is greeted with instant skepticism, but Kunstler, who is a fringe figure with an agenda at best and totally out of step with conventional wisdom among oil experts, is to be quoted at length and used to ‘refute’ what the other side says. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 10, 2007, 5:53am UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/54 "2007-06-10T05:53:55Z")
[QUOTE=Sam Stone] The ones that support what you desperately want to believe, of course. For example, the Manhattan Institure is greeted with instant skepticism, but Kunstler, who is a fringe figure with an agenda at best and totally out of step with conventional wisdom among oil experts, is to be quoted at length and used to ‘refute’ what the other side says. [/QUOTE] :dubious: “Oil experts” includes [the Association for the Study of Peak Oil & Gas](http://www.peakoil.net/) (founded by petroleum-industry scientists, and often quoted by Kunstler). ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [June 10, 2007, 12:20pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/55 "2007-06-10T12:20:06Z")
[QUOTE=BrainGlutton] That review says Huber is a fellow of the [Manhattan Institute.](http://www.sourcewatch.org/index.php?title=Manhattan_Institute) That does not, of course, automatically discredit anything he says, but it does, of course, automatically warrant careful skepticism. [/QUOTE] But it doesn’t warrant automatic rejection, either. There appears to be a wide array of contributors to that “conservative think tank” organization. While they may not err on the liberal side of the spectrum, a conservative point of view is hardly in the conspiracy camp. Read the book, then tell us what you think. I think Huber has some good points – one of which is while we may run out of a particular source of energy, we will never run out of ALL sources of energy. And while the cost to obtain a specific kind of fuel may rise, this will only spur development of currently available but costly sources. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 10, 2007, 5:47pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/56 "2007-06-10T17:47:30Z")
[QUOTE=Musicat] Read the book, then tell us what you think. [/quote] I might. At any rate I read the Amazon customer reviews, which are generally, though not consistently, negative: From **Scot Shatwell “Earth Saver Scott”:** > [@](#): > > The “Bottomless Well” seemed to be an intriguing approach to tackling the problem of our potential to run out of “energy” by simply negating that it’s a problem. I went for it, and wish I could get my time and money back. There are all sorts of graphs and charts that at first glance appear as if this book is a well-researched, believable source of information. It explains that that we can extract low-grade energy from the earth (ie coal and oil), refine it, and put it into a highly-ordered form where we can use it in our cars, computers, and (their favorite example)…laser beams. Of course, it takes energy to extract and refine energy, so the subtitle of their book is counter-intuitive at first glance. In fact, I feel that they did a very poor job of expaining why we will never run out of energy. In actuality, I could argue that they did a good job of explaining exactly the opposite, especially if you consider one of the most important elements that was conveniently missing from their analysis and graphs, and only mentioned in passing. That factor is increasing demand due to human population growth. > > If you look at the charts in the book that deal with increased energy demand, increased efficiencies, increased order, etc. and factor in population growth, much of their point is completely negated. The population of humanity on the planet continues to grow, and with it, grows demand for food, oxygen, electricity, and many other necessities and pleasures. Even if we grow food more efficiently and transmit electricity more efficiently, the fact is that the demand will continue to grow as the population increases, and there are some limiting factors that just shouldn’t be ignored. However, they are in this book. If you want to be blind to that, go ahead and read it. I’m off to read something that might be more realistic…maybe even find out how I can help further sustainability instead of close my eyes like the Bush administration did regarding global warming and hope the problem goes away. From **H. Mccartor:** > [@](#): > > The title of this book is a good summery of their views. They essentially avoid the issues of how soon our oil supply will diminish, what this will mean for our economy and global stability and do not deal with the issue of global warming. They talk a lot about computers and how they will make cars more efficient and even about one author’s theory about how life began. They are very optimistic about science finding ways to handle our energy needs without much change in our lifestyle or the health of our economy. However if you want to know something about how much oil is left, what are the prospects for specific alternative energy sources and how global warming will impact the trade offs I suggest you go to another source. The best two that I have found are 1) ENERGY AT THE CROSSROADS by Vaclav Smil. He is an academic who has studied energy issues for 40 years. It is a tougher read because it has a lot more pertinent science and information. He is not given to prediction because he has seen so many fail but he does address the issues in a thoughtful and nuanced way. 2) Heat by George Monbiot. He accepts the reality of global warming and looks closely at the measures at hand we can use to prevent the worst possibilities. I am impressed with the thoroughness with which he has researched the problems for our homes, our power and transport systems and the possible solutions. He is optimistic if we make maximal effort soon but somewhat pessimistic about the political will to do so. He is convinced that we will largely have to do with technology that already exists, although often not yet developed, rather than hoping for major scientific breakthroughs because of the typically long delay in implementing new energy technology. I would urge you to read this book if you want to understand the trade offs that will be required to meet the global warming threat. From **Dean Smith:** > [@](#): > > Huber and Mills tell a happy and triumphant story in The Bottomless Well. Our energy future is secure. “Energy technology is now poised to evolve faster than at any time before in human history.” Don’t worry about the details, the markets will work it all out (markets never fail). The story is cast as a battle between order and chaos, life and death. It is a “chronicle of humanity’s struggle against the second law of thermodynamics, not in theory but in the real world . . . It is a story of ingenious valves and gates that flip open and closed, with just the right timing, to push energy up the thermodynamic hill, to structure our environment, and to add order to our lives.” xxix. Capitalists are on the side of order. Ghandi and government regulators are on the side of chaos. > > In order to follow the story, the reader must grasp a number of basics. > > 1. “Raw energy is nothing; context and order are everything.” 54. > 2. “Order is life and chaos is death.” 153. > 3. “The more energy we capture and put to use, the more readily we will capture still more.” 5. > 4. “We use well-ordered energy to distance ourselves from chaos.” 53. > 5. “It is by throwing [low-grade] energy overboard that we maintain and increase the [high-grade power and therefore the] order of our existence.” 44. > 6. “Massive amounts of low-grade energy are consumed to deliver relatively tiny amounts of high-grade power.” 49. > 7. “Efficiency increases consumption.” 123. > 8. “Heat - chaos - is where ordered power ends up when the order dissipates . . . If it isn’t effectively dissipated, heat takes microprocessors, sensors, and engines to the grave with it. Heat is the insidious enemy of valves, seals, capacitors, and logic.” 146. > > So, according to our authors, low-grade energy is converted to high-grade power, high-grade power creates order and order defeats chaos. Why believe the authors? How do we know that order prevails? The authors invite the reader to be awed by what technologically super-charged power can do. For example: “pump up millimeter-wave power high enough and it can cook things, or people, or hostile microorganisms, at quite a distance.” 148. “It takes far fewer people to fight and direct wars today than it did even less than a decade ago, because the speed and power of the front-line soldier had been so greatly amplified; our distant wars are now fought, once again, by a few, a happy few, a band of brothers, while the rest of us lie a-bed, watching their progress on Fox.” 149. > > If there is anyone other than the authors (perhaps a Fox viewer or two) who believe there are a “happy few, a band of brothers” creating order and defeating chaos in Iraq, thanks to our awesome ability to “cook people from a distance,” then perhaps the authors have made their case. Those who see the facts otherwise, however, may wonder what planet the authors are talking about. It seems the authors mistook their happy dream of order for reality. Though the Iraq reality check did not register with them, you would have thought any number of environmental reality checks would have registered. Not so. “The logic [they say] of fuel-retrieving machines has advanced much faster than the fuels have retreated - we keep getting closer to the receding horizon. Environmental concerns are a separate matter, important in their own right. But the issue of exhaustion is resolved. Energy supplies are - for all practical purposes - infinite.” 181. In other words, don’t worry about the chaos, the dumping of heat - “the insidious enemy of valves, seals, capacitors, and logic” – into the distant reaches of the planet. The oceans and sky are big enough to take it. Dump away. Indeed, “we [the happy few] use well-ordered energy to distance ourselves from [environmental] chaos [and evil doers].” > > One could conclude that the authors are a couple of happy, delusional guys (neo-cons maybe). The truth is, however, that Huber, at least, is probably more angry than happy. He despises environmentalists, who, he believes, have cooked up more trouble and hoaxes than the devil himself. Environmental concerns exist largely in the minds of weak-headed liberals. (See Huber’s book Hard Green). > > In spite of its faults, this book is well worth the read. The authors have an interesting perspective. They write well. At their best, they tell a grand tale and present a sometimes reasoned challenge to the gloomy Malthusians. Many of the basics listed above are defensible, and all of them are worth thinking about. At their worst, the authors treat you to science fiction. From **The Dilettante:** > [@](#): > > A character in the recent dystopian science fiction film The Island works all day injecting fluids into wires that disappear into the wall next to him. He is never told “where these wires go,” and his curiousity to find out eats away at him. Without this crucial contextual knowledge, his understanding of his own role in the system is facile. > > I have always felt this way about energy. I make all of my energy and resource consumption decisions on the basis of the folk wisdom that certain choices are good for the environment and the long term well-being of mankind. But since I don’t know “where the wires go” my decisions are…shall we say…“faith-based.” > > This book traces our wires back to the source. It is by no means exhaustive, but as a brief popular history of energy, it is a fantastic book. The authors not only tell the story of energy since what they have so catchily dubbed the “carbohydrate economy” of the pre-industrial age, they also place this history in the context of physical law. > > There are, however, two serious problems with this book, and they are closely related. First, like all of Peter Huber’s books, it is extremely divisive. The authors don’t just disprove environmentalist misconceptions, they RIDICULE them. In book after book, Huber consistently overplays his hand, happy to alienate potential converts so long as it pleased the choir. Like Nietzsche or Richard Posner, his good points are buried in cavalier sarcasm. > > The second problem is that they fail to prove their most (jaw-droppingly) provocative theses (paraphrasing): 1) that waste is virtuous and 2) that we will never run out of energy. They make a compelling case that using energy to extract energy is expanding the practically-available supply. They also demonstrate that the price of fuel in decreasingly significant to the price of end-user energy. But it doesn’t follow from either of these that waste is a good thing. Insignificant, MAYBE, but not virtuous. Huber would undoubtedly respond that he’s just being an advocate, providing a counterweight to the grim greens. But the authors accuse environmentalists of Malthusian doom-saying even as they charge into this Panglossian optimism. For a nitpicking critic like Huber, this is a fatal flaw. He even concedes as much at one point, stating something to the effect that “if you wanna get all technical about it” the Second Law of Thermodynamics beats us all in the long run. > > For any lesser intellect, this might not be a total cop-out. But the authors invoke the laws of physics as the gold standard of their own analysis. Dismissing these laws as technicalities whenever they don’t fit the book’s subtitle inflates the claims the authors can plausibly make and therefore (presumably) their book sales. Perhaps it was naive of me to hope that this book could tell me why my SUV-driving is a selfless gift to humankind, but I still expected a bit more. [QUOTE=Musicat] I think Huber has some good points – one of which is while we may run out of a particular source of energy, we will never run out of ALL sources of energy. And while the cost to obtain a specific kind of fuel may rise, this will only spur development of currently available but costly sources. [/QUOTE] Both true – but a fuel shortage can still wreck our economy, if development of the costlier alternatives 1) does not happen fast enough, 2) does not lower the cost enough, or 3) is successful, but still proves inapplicable to the problem of powering personal transportation vehicles. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [June 10, 2007, 7:26pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/57 "2007-06-10T19:26:39Z")
[QUOTE=BrainGlutton] :dubious: “Oil experts” includes [the Association for the Study of Peak Oil & Gas](http://www.peakoil.net/) (founded by petroleum-industry scientists, and often quoted by Kunstler). [/QUOTE] I think you missed my point. A statement is either true, or it is false, or if it makes more than one point can be a combination of the two. A argument is either sound or it is not. A smart person is carefully skeptical of ALL claims and arguments, not just the ones that espouse views different from their own. ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 10, 2007, 7:47pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/58 "2007-06-10T19:47:44Z")
[QUOTE=RickJay] I think you missed my point. [/QUOTE] I was responding to **Sam,** not you. ---
**Author:** ![slaphead](https://avatars.discourse-cdn.com/v4/letter/s/e9bcb4/32.png) [@slaphead](https://boards.straightdope.com/u/slaphead)\ **Post date:** [June 10, 2007, 8:51pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/59 "2007-06-10T20:51:50Z")
[QUOTE=Brad Serum] - American consumers and it’s auto industry have not demonstrated a significant abandonment from low-milage automobiles. [/QUOTE] Of course not, why would they when gas is dirt cheap? > [@](#): > > America relies on the automobile for it’s residential dispersion. Suburbs and rural areas are especially at risk. I think before civilization collapses in the US there will be a reasonably long period when people find that you can disperse adequately in a 900cc 900kg econobox with no air conditioning and manual everything, it’s just quite uncomfortable. You should be able to buy one brand new for [$4,000 or less](http://www.businessweek.com/magazine/content/07_17/b4031064.htm?chan=top+news_top+news+index_businessweek+exclusives) by then, or a few months gas bill. > [@](#): > > - Densely-populated and newly-emerging Chinese and Indian societies will increasingly demand their shares of the remaining oil reserves. Shame they won’t be able to afford to pay for it though. > [@](#): > > - Air travel is also especially susceptible to the inevitably rising oil prices. Cheap airfare will become a thing of the past. I extrapolated this to serious effects on shipping (FedEx, UPS) and the prevalence of business travel. So I will have to do my meetings by phone, email my letters and wait an extra few days for crap to make its way to me from the warehouse. Or pay a few dollars more for things made locally. > [@](#): > > - Everywhere I look is plastic. From this computer in front of my face right now to the containers in my fridge to components in my car. Not all plastics are made from oil. Some are made from [potatoes](http://edis.ifas.ufl.edu/AE210) > [@](#): > > - The film also had grim outlooks on the viability of alternative fuels based on the findings of the researchers appearing in the film. Well, it wouldn’t have been a very entertaining film otherwise, would it? “We may be screwed, or we may not, we’ll have to wait and see, but in the meantime hows about trying to stop squandering resources and energy like fat greedy kids in a sweet factory?” doesn’t have the same oomph as “We’re all DOOMED. **DOOMED** I tell you” ---
**Author:** ![Sam\_Stone](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Sam\_Stone](https://boards.straightdope.com/u/Sam_Stone)\ **Post date:** [June 10, 2007, 9:42pm UTC](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205/60 "2007-06-10T21:42:21Z")
So, the same person who is instantly skeptical about the Manhattan Institute because they might have an agenda sees no problem in buttressing his arguments with a quote from an unknown internet user named “Earth Saver Scott”, and to critique a book by quoting from reviews of it by random [Amazon.com](http://Amazon.com) users. Kind of makes my point about how we select our sources, doesn’t it? BTW, reading those reviews, I didn’t see a substantive refutation of anything at all. Did I miss something? What was the point of posting all those, when all they really said was variations on, “The authors say it’s not a problem. I disagree!” And BTW, whether or not a book gets mostly negative or positive reviews on Amazon often has little to do with the quality of the book - especially when the book discusses political hot-button topics. The partisans hear about the book, swarm to Amazon and in lock-step post negative or positive reviews - often without having read the book. You see it on both the right and left. Amazon’s reviews are almost worthless when it comes to evaluating politically charged books. [Previous page](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205.md?page=2) [Next page](https://boards.straightdope.com/t/a-crude-awakening-the-oil-crash/407205.md?page=4)