Coined (as far as I know) from this column that was sent to me.
Are the ideas presented therein anything new? What do you think of them? How different, if at all, are they from “regular” Peak Oil arguments (asked because I could’ve sworn that many already take this kind of thing into account)?
Myself, I’m not sure what to think, especially since it’s presented as (a) apocalyptic and (b) by some “guest columnist” whose only biographical information is his geographical location, both of which set off warning bells in my mind.
And this view says an attack upon Iran will throw the US economy into the abyss and collapse the entire political process, regardless if there is a military “winner.”
As far fetched as it may sound, the author says those who advocate war already know this. It makes more sense if you adjust your tinfoil hat a bit to suggest Bush and the Religious Right consider the Middle East wars as religious in nature. Their thinking is the Rapture is imminent and now is the time to take out the Beast (Islam) once and for all. Those who subscribe to their religious dogma will earn their salvation. Those who don’t will burn in Hell.
If you choose to think outside of the box, maybe it’s time to consider such wild theories. After all, the Bush Administration’s programs the last eight years defy rational thought. So why can’t irrational, religious thinking really be part of their plan?
Perhaps, but I’m not sure how that’s relevant to my OP (at the very least, the way you’re developing your point seems to directly steer it away from what I was asking). Heck, I think your assertion is big enough for its own thread.
I actually think the article makes some valid points. If gas demand isn’t perfectly elastic, then a sudden crippling of supply is going to cause shortages and insane price spikes of the sort you see after natural disasters. I don’t know how likely this scenario is, but I think it’s possible.
A few comments about this:
THIS is what the Strategic Petroleum Reserve is for. If such a shortage is created that people’s lives are essentially hanging on the ability to get short-term oil, that oil in the reserve could save many lives or help moderate a potentially catastrophic economic decline. If that oil goes up in value by a factor of ten, a billion barrels of oil in the Reserve would be worth over a trillion dollars. And you’d be kicking yourself for selling it for a lousy 3 or 4 bucks a gallon.
Offshore drilling takes on a new importance when looked at with the risk of current supplies being cut off. At $500/bbl, 2 million barrels/day would be worth a billion dollars. 365 billion per year.
However, I think you underestimate the speed at which the economy would adapt. The good side of there being so much energy inefficiency in our economy is that we could scale a lot of it back if we had to. Everyone would be carpooling. Tons of people would work from home. We’d stop flying airplanes and big cars. Almost any type of solar energy would be cheaper if oil were $1000/bbl, so we’d see a huge increase in plants making solar cells, and we’d be festooning them on everything. And huge money would flow into engineering more efficient devices and developing new energy sources. We’d be fast-tracking nuclear plants to be built in 3-5 years. Hundreds of them.
When the economy is provided big enough incentives, it can adapt amazingly fast. Look how different our society is with computers in it, and how radically it has restructured in the last 30 years. Or how quickly the horse-and-buggy economy changed to the auto.
We’d see a severe recession, then an economic recovery after the market adapted by first conserving energy, then replacing it.
Expanding offshore drilling won’t have an effect for twenty to thirty years, and it’s projected benefit to prices is thought to be extremely marginal. This isn’t a solution for the problem posed by the OP.
And how quickly would the economy have changed from horse-and-buggy to auto if the government hadn’t been busily building an extensive roadway system? It’s like you live in some alternate, Star Trek universe where all government action has been disappeared from the historical timeline.
No, what’d we see is a severe recession, and then people clamoring for government intervention, which the government would then do. And in combination with market action, something would happen. What that something is depends on how the market is structured.
This is completely incorrect. :rolleyes: There are stopped oil rigs out there right now which could run but don’t because it was made illegal. And even if new oil reserves were to be located and rigs built it would not take two or three decades.
I agree with to the extent that we do need to try to look at change as a positive thing. Instead of being in a panic because we don’t know how we’re going to fuel our cars for the daily grind to work and back, we should be looking at telecommuting for the types of jobs where it’s feasible, and provide incentives to employers for encouraging it. If we could get 20% of North America’s back-office workforce to telecommute, how many offshore oil wells would that be worth?
Regarding carpooling, it’s sort of like the punishment for the way we have been organizing our lives in this country since 1950 or so. “Hell no, we aren’t going to ride trains or buses to work any more–we would drive our own cars”, they said. Now that we’re running out of fuel, a lot of us will have to start carpooling which is the least flexible way of getting around at all.
Use simple logic. it did not take decades to get the rigs up in the first place. And it’s not like they simply disappeared some years ago. They’re still there.
This article says a decade or more and that there would be a negligible effect on gas prices. Perhaps I’m off by a couple of years, but I still don’t see how it’s a solution to the OP’s problem
And are you of the opinion that in 7 years oil won’t be a problem any more?
For those of you who want to prevent drilling because it won’t affect prices for years, does this perhaps make you think twice about the oft-asserted ‘fact’ that government is needed to think in the long term, because business only thinks in the short term?
Here we have businesses chomping at the bit to invest billions of dollars in something that won’t return a profit for maybe a decade or two, and the ‘long-term’ thinking government wants to prevent this on the grounds that anything a decade into the future is irrelevant.
Also, how would you respond if I told you we should do nothing about global warming, because we won’t see any effect of our efforts for several decades?
It doesn’t matter how long it takes. If oil is becoming critical, 7 years from now it could be much more critical. After all, had the drilling in ANWR be allowed when it was first proposed, that oil would be coming online right now. The argument then, as now, was that there was no point in allowing it because the results wouldn’t arrive for several years.
To the op, no, I do not see this as an idea novel from Peak Oil as a concept. Demand for oil products has always been thought to be relatively inelastic, other than increases by developing nations ratcheting demand up. (If anything the surprise has been the unexpected elasticity in demand as US gas usage has decreased 3% for this year compared to the same period last year.) Supply is becoming fairly inelastic as well. Concern over sudden disruptions in supply while demand remains stable has been part of what drives the current rise in prices and therefore is factored in to some degree.
Thinking of a price peak as threatening “our civilization with imminent collapse” is quite hyperbolic.
That said there is little excuse for being unprepared for Peak Oil, even if the price increases come acutely.
As to the role of opening up new areas for offshore drilling and its effect on prices, either short term or long term: I have no strong opinion on to do or to not do, but the effect would be slight - a relative drop in the bucket. Putting it forth as a major part of a solution silliness.
Are the ideas presented therein anything new?
No, the article author is simply highlighting a few examples of supply interuptions that may occour. Then goes on to suggest supply interuptions may cause the price of oil to spike. Not much new there.
What do you think of them?
The author has called for contingency plan for a interuption to the oil supply. He has failed to notice the International Energy Agency (IEA) has been around since 1976. The IEA, whoes original purpose was to coordinate supplies between its member countries in case of supply interuptions, has a rather spiffy plan to deal with supply interuptions, it can be found here. http://www.iea.org/textbase/nppdf/free/2007/fs_response_system.pdf
I would think anyone who is writing an article on oil supply and is unaware of the IEA, really should not be writing about oil supply.
How different, if at all, are they from “regular” Peak Oil arguments (asked because I could’ve sworn that many already take this kind of thing into account)?
Peak oil is about a gradual drop in supply due to dwindling reserves, this guy is talking about a sudden intruption to current supply. Assuming the situation that caused the interuption goes away then supply can resume. In the case of peak oil, the situation is the oil is gone.
Right back at you. You are claiming that oil flow from expanded offshore drilling is immediately available, and a cite has already been posted in this thread stating that oil flow from new drilling won’t be available for at least a decade. And here’s another one for you: :rolleyes: . If you can’t post a cite, then I have no reason to believe that you have any idea what you’re talking about.
Here’s a report from the DOE. They assume that leasing starts in 2012.
So, the DOE gives a five year lead-out for production to start from the date of making leases available, plus an additional thirteen years after that for any kind of impact on crude and natural gas prices. If we go by the DOE assumptions, then we’re looking at 18 years to have an effect on oil prices. Now, let’s look at my original statement, which smiling bandit started quibbling with:
So, perhaps this is a misunderstanding, and while I started off talking about the effect of drilling on prices, smiling bandit misunderstood that to be a statement about when a particular oil well could be turned on. Or perhaps smiling bandit is deliberately trying to obscure the issue of what effect increased offshort drilling will have on prices by hijacking my comments into a tangent (which he still fails to provide supporting evidence for). I’ll let the readers decide.
Exactly. Not to mention how impulse-driven the commodities market seems to be anymore.
Terrorists attack a minor pipeline in Nigeria that impacts .001% of our supply? Price of barrels goes up.
A sweeping new energy resolution by Congress that aims to identify and potentially tap vast existing domestic resources of oil? The market calms and slows based on this information.
I think this is key. If we come out as a nation and engender a simultaneous culture of pressing on with technological developments to steer us away from the rate of oil consumption we have today, but ALSO extracting as much as we possibly can in the short term to keep prices steady, I believe that this is the only, and most viable solution. But the time to act is now. It will take decades to fully transition America’s transportation’s dependence on oil. Hell, it may never happen fully.
If we can get Americans in electric or whatever the best solution is cars, that would go a long way to preserving oil at it’s current relative price for the things we’d still need oil for, like tires, jet fuel, the military and the like.