I always had this mental image of you (or rather, your namesake) rolling over in your grave, muttering ‘I told you so’.
Halting population growth, as I see it, is more-or-less inevitable in the coming decades. The way it pans out will run the continuum from a fairly non-catastrophic drop in birth rates plus a rise in death rates (due to increased rates of epidemic disease and so on), to a hellish stepwise crash in population thanks to a vast increase in death rates (due to the same, but worse).
I can’t see the world population being anything like sustainable, even at its current figure (soon to breach seven billion). We can absorb a lot of contraction, because of the staggering amount of energy we waste here in the industrialized world (and increasingly, the industrializing world), but that is not unlimited. I guess the argument is best summarized as being a matter of how much wiggle room we have and when we should start looking for other ways to wiggle?
It already is. I’d like to heat my yard in the winter so I can go out without a coat, but it costs too much to produce the oil so I am stuck indoors. I hate it when my demand can’t be met for a price I’m willing to pay.
Why is the ceiling of oil price double the current price? What would prevent it going as high as demand puts it?
I’m curious as to why food prices can’t increase by more than 2%. That is not how supply and demand works. The price of food can increase until the market can’t afford it.
I’d also like to see a cite about the world producing a third more food than is possible to eat. Where is that food going? Why is it even being produced?
Because at double the current price all sorts of alternatives become economically feasible, including many large alternative sources of oil (such as shale oils) become viable. These would tend to stabilize prices.
At higher costs you are going to get more alternatives, and at some point oil will simply not be cost effective and the market will go to one (or several) of the alternatives, depending on which is most attractive to the consumers.
But he’s not saying that. He’s saying that a doubling of the prices for oil will result in no more than a 2% increase in the cost of food. I don’t know how accurate that is (Blake generally knows what he’s talking about, but if you don’t believe him ask him for a cite), I’m just pointing out that you read what he was saying there wrong.
I’m not sure what he’s getting at, but I know that a lot of food grown in the US goes into reserve surplus or is destroyed or otherwise not eaten by humans. In Brazil they grow a lot of sugar cane that is used in their automotive fuel systems.
In general it’s not about having too little food to feed people, it’s about having inadequate logistics and transport to get the food to the people who need it. Plus, in many cases, there are folks with guns who are in between the folks who want to give food away and those who want to eat it.
If we waste a staggering amount of energy, what does that tell you?
It tells me that the price of energy is staggeringly low. Not much thought is put into energy efficiency, because the price of improving efficiency is greater than the price of just shoveling more coal into the furnace.
Of course, what peak oil catastrophists can never seem to wrap their heads around, is the fact that oil is a fraction of our global energy budget. It’s an important fraction, but if we decided to outlaw oil production tomorrow, that would mean the global energy budget would drop by a quarter.
Can we improve energy efficiency by 25%, or will trying lead to a Malthusian catastrophe?
I think they are simply suggesting that modernity reduces birthrates. Of course education, economic opportunity, birth control, wealth, and modern retirement systems reduce the birthrate. It’s absurd to argue that these advances do nothing to the birthrate, all you have to do is look at the birthrate in modern nations vs. those struggling to modernize.
This does not jibe with reality. The current price of oil is sitting around $75 a barrel. In 2008 it was over $140, which is near enough for me to call double. Where was all the economically feasible alternative energy development?
So already we can see that double the current price is not enough, I would personally guess the region of $200-$250 per barrel to make alternatives realistically viable.
That is why I was questioning the 2% cap on food price increases. And even that does not jibe with history, I think most people can corroborate that the price of gas can increase somewhat less than double with resulting food prices increasing more than 2%.
Yes, the question is how high that price is and what it will do to economies on the way to reaching it.
You really aren’t thinking very clearly. You have confused a rather obvious cause an effect.
Energy production isn’t a short term investment. It requires a market to be sustained much longer than 24 months to be viable. We are talking here about the production of large scale production facilities with a lifespan measure din decades. You don’t make those sorts of investments on a 24 month market surge.
Normally when we talk about the value of energy as it pertains to investment we are looking at a 30 year projection, not a 30 month projection. If oil is ever projected to average $140 a barrel for the next three decades, then we will see the investment based on $140 a barrel.
In other words, the fact that oil was $10 a barrel 11 years ago, was $140 a barrel 24 months ago, and is back to just $75 a barrel today is the reason why we aren’t seeing investment in $140 a barrel energy alternatives. It’s not an argument against such an investment, as you seem to think it is.
Do you really think somebody is going to invest in $140 dollar energy alternatives when the market will only exist for 24 months?
Of course when “peak oil” happens then oil prices must remain at >$140 a barrel for 30 years. That’s the very definition of peak oil. If oil doesn’t remain at >$140 a barrel then by definition we haven’t hit peak oil and there is no need for alternatives yet.
Thanks for clearing that all up, I’m much relieved to know that the people in charge know the long-term path of oil prices, which is clear from how no alternative energy investment was made when the price spiked because they knew it was temporary - nothing to do with a self-serving industry controlling governmental policies and feeding the ignorant public what they want to hear.
Let’s say you want to build a brick wall around your house. The price of bricks now is $1 a brick, but there’s some industry uncertainty about brick material supply and possibilities of price increases for the final product in the future. You’ve heard some rumours that a new material is under development and that bricks manufactured from it will have the exact same properties and characteristics of regular bricks but they will cost at least $10 each.
Do you want to build your wall now with regular bricks or in 10 years time with new alterna-bricks?
Less sense than guaranteeing a higher cost when the transition eventually does begin?
No, you’ve conflated price with extraction. Peak oil refers to the peak of oil extraction, not price. One would expect the price to lag on the curve until it becomes clear that the peak has indeed passed. At this point that is not the case, it looks as though it may have, but only time will tell.
Sometimes I feel cynical about the prospect of a just world, that’s all. Of course I agree that education, opportunity, and all the rest that (theoretically) goes with modern industrial development brings down birth rates.
However, one of the consequences of living in a post-peak world is that developing countries never will develop. The industrialized countries all achieved that on the back of cheap oil, or so the theory goes. The equal opportunity for development just isn’t there, as the cheap oil is already gone.
There’s a chance for you to brighten my day by showing me I’m wrong though
I think the developing world has an opportunity to develop in a different way than we did, just as China is developing in a different way than the US did.
One obvious example: developing countries aren’t wasting time building a huge, wired telephone network. Cell towers work oh-so-better, and many expect that Internet access in the developing world is going to be spread in a similar, wireless manner.
Sure, you might say, but what about access to energy? That is a tougher nut to crack, but I would think that the developing world would be in a better position to take advantage of alternative energy sources, since it doesn’t make sense to spread huge, new, carbon-related energy infrastructure at this point in time. Go straight to whatever the most promising technologies may be, since that’s more or less the direction that the developed world is starting to head in anyway.
But, you see, real reality shows that the price of a barrel of oil isn’t $140 today. That was a price SPIKE…not a baseline price. A quick Google search turns up that the price of a barrel of oil today is around $77 per barrel. When the baseline price of oil is $140/barrel (with spikes occasionally going up to, say, $200 a barrel) then you’ll start to see more alternatives coming out.
You see, had anyone been rash enough to roll out their handy dandy alternative that competes with oil at, say, $130/barrel they would have been fucked when the price of oil went back down to what it is today…$77/barrel. They wouldn’t have been able to compete.
Happily, pretty much everyone knew that those high prices were spikes, and that it wasn’t going to stay that high indefinitely, so no one got screwed by making a rash decision.
Even at $77/barrel some alternative are being developed and some even being deployed btw. The Canadian’s, for instance, have ramped up their tar sands projects and are producing more. Had Venezuela not fucked themselves, they’d probably be doing similar things with their vast (and actually more easily accessible I believe) tar sands as well. People are buying more hybrid vehicles, and development for AEV’s are moving forward. Toyota and others have poured literally billions into hydrogen fuel cells, betting that this will be the next big thing. A lot of those things are waiting in the wings for the time when they become economically viable. I think that time is going to be pretty soon…I’m guess is it will happen in the next 5 years. Maybe less.
Um, no. Because, you see, the current price is $77/barrel. That’s the actual price of a barrel of oil TODAY. And here is the trend for the last year.
That’s certainly a valid question. I just think you are looking at it from a highly skewed perspective.
Folks interested in energy efficiency and what is wrong with the utility industry in this country should listen to what I have to say. I will appeal to authority in this case, as I’ve been doing this for nearly 20 years full-time.
One of the most God-damned frustrating things which I encounter is utilities which insist on insanely unrealistic payback periods on investments into energy efficiency. I will give a few real-world examples which are quite common, and in fact just the tip of a freaking iceberg.
Plant A had me study the cost-benefit of fixing their leaky air heater, which would result in an improvement in plant efficiency of about 1% on average over a 5-year period. As the plant put out 5.5 million tons of CO2 per year, this would save about 55,000 tons of CO2 emissions per year, or 275,000 tons of CO2 over the life of the upgrade. The economic payback in terms of improved efficiency, reduced coal burn reduced ash and scrubber waste disposal, etc. was 19 months.
The verdict? “That’s too long. Project canceled.”
Plant B had the option to improve their turbine efficiency to the point where the plant overall would be nearly 3% more efficient on average over a 7-year time frame. This would have resulted in a savings in cost to the plant which would have reached break-even cost at about 24 months. We predicted that spending the $15M now would result in an ultimate savings of about $60M over that 7-year time frame. $50M in the bank.
The verdict? “That’s too risky. We need a 1-year payback. Project postponed indefinitely.”
Plant C had the option to switch to a different coal by building a new unloading facility. This facility would cost about $30M, but would result in a net savings in emissions costs and improvement in efficiency which would have resulted in a payback period of 18 months. Each year after that the plant would save about $20M to $25M in costs, for a period of 8.5 years. This savings would be guaranteed under contract.
The verdict? “Too risky.”
The most extreme case is Plant D, where a $100,000 plant upgrade was calculated by us to save them approximately $1.3M per year. In other words, the payback period was less than a month.
The verdict? “No money in the budget, sorry. Economy, you know.” Mind you, this was a regulated utility, which had oodles of cash on hand.
In many cases there are savings to be had, but the utility companies are too risk-averse to do anything about them, and quite honestly they’re under no incentive. In a regulated market, they just pass on the cost to the customer, and in a deregulated market they’re too worried about fighting tooth-and-nail with getting the absolute lowest bottom-line cost to make any investments. I’m in favor now, based on my long experience with this, of starting to mandate either performance standards or carbon taxes, because very little else is going to push plants like I’ve given examples of into making the more efficient choice.
They are much more easily accessible, and they were in fact doing things with them - look up “Orimulsion.” (I’ve got a big jug of it from Venezuela sent to me as a gift from them, sitting in my garage to this day).
FYI, Bitor is perfectly happy to let those bitumen deposits sit for decades if needed. Their tax structure was such that development of their Orimulsion product was not as profitable to them as they would have liked (but it was still profitable) and thus they stopped production of it. It was purely an economic, not a technology or capability decision. And they are still trying to leverage other things to do with the deposits, but the depressed economy makes it not worth their while. Trust me on this one…
Oh, you don’t have to worry on that score, at least as far as I’m concerned. Now, getting the Peak Oil end of the world types to listen to you and trust your analysis…THAT is going to be another story.
Drop the straw man please. Oil = transportation in nearly all cases, unless you want to include coal-powered ships and the odd nuclear vessel. It does in fact = energy in some places. What kind of problems post-peak oil will cause is debatable- unless you insist on arguing with your straw man, in which case it is absurd.
And as has been pointed out repeatedly, petroleum is not the only source of liquid carbon-based fuel. If petroleum ceased to exist, I don’t think they’d even bother building coal-fired steamships or locomotives again, they’d just convert the coal into fuel oil.
