Let me guess – this figure reflects the change the mean price, rather than the (more relevant to this discussion thread) minimum price available to people who take the effort to shop around and book in advance. (The former is artificially inflated by expense-account travellers who aren’t as concerned about keeping costs down – which is a form of market failure. )
Given the scrambling when more slots open up at airports (I recall this at National a few years back), I’d say that airline transportation for many routes is produced in inadequate quantity – not because it is underpriced but because the government-provided infrastructure is lacking.
I’ve gotta agree with Sam on this one. I grew up in the era of heavily regulated American airlines. Air travel has been so much cheaper since we stopped regulating routes and fares.
The exceptions, IME, tend to be places like Tri-Cities Airport in NE Tennessee, which was my ‘home’ airport for five years. It had poor service at expensive prices. But that wasn’t a market failure - it was an admission that airlines couldn’t make much money flying people into and out of Tri-Cities. Scarce resources were allocated elsewhere - to where the people were. This is exactly the thing a market is supposed to do.
But there are things a market can’t do particularly well. A market can’t protect United’s pensions; regulation can. It didn’t, but that was due to gutted regulations - ERISA required companies to demonstrate that their pensions were adequately funded, but would accept pretty weak evidence, and (I gather) didn’t mind an overdependence on the company’s own stock.
Markets also can’t create more airports where they’re needed, and if there’s a looming problem with air travel, that’s it. Of course, in a market-religion society like ours, trying to get people to create some sort of agency to create new airports where the people are moving to is just too much of a challenge.
Not sure if this is the right thread to mention this or not, but would the upcoming F/X TV movie “Oil Storm” be an accurate vision of what folks like the OP and BrainGlutton think will happen in the next couple of decades? What about this website?
Come to think of it, I don’t think I ever got an answer to a question I had about the peak oil civilization collapse scenario: should everyone be telling their friends and families in Hawaii to leave ASAP? After all, its isolation and population demands lots of imports. Exports and tourism are keys to the economy. Under the airline collapse scenario, the economy of Hawaii couldn’t possibly survive. Only the rich would be able to afford to leave. Thus the state would descend into this Lord of the Flies state of anarchy and survivalism (which is being predicted in a bad enough condition for the mainland as it is).
Nothing like a little panic mongering. I’m reminded of the doomsayers who predicted disaster upon disaster from y2K, even though the problem was pretty well being fixed.
But hey, everyone stares at the guy on the street with the breadboard saying ‘the world is going to end’. Attention is a drug.
What cites like the one above tend to miss is the incredible dynamism of the market (and of humans in general). As oil becomes more scarce, you will be see more and more innovation and investment in getting at the stuff that is hard to get. That will slow the decline in reserves. And at the same time, the higher price for oil will accelerate development of alternatives and more efficient vehicles.
Then there are the unknowable changes that always come along to fill a need, but which cannot be predicted. Perhaps some new form of mass transit will be created that offers enugh value that people are willing to take it. Maybe buses with strippers! And blackjack!
Maybe telecommuting will become huge. Perhaps it will become a real social faux pas to be seen consuming oil in a flagrant fashion and therefore scooters will become cool and you’ll need one to pick up the hot chicks.
This is a contorversial subject simply because none of us really knows what going to happen. But for the moment, to be the devil’s advocate here, the argument against what you are saying is called “overshoot”. The thrust is that by the time we realize the extent of the problem its too late. As Richard Heinberg puts it in his excellent and methodical historical analysis (but too gloom and doom for me future predictions) is to look at the issue like a rabbit population introduced into a new environment. At first food is plentiful and the rabbits multiply. Soon the rabbits reproduce faster then the environment can replinsh the food supply. Eventually the rabbits outstip the food supply and there is a crash in population. Untimatly equilibrium returns but many times longer than if the rabbits had stop producing when they found a balance with the food supply in the first place.
Therein lies the rub…FOOD. Why noone has mentioned it yet makes me think many of you do not have a proper grasp on the problem. I do not claim to profess I know what is going to happen. Im the middle of the road group myself, not doom but not sunny and bright future either; there will be pain. Anyway, food is produced presently with MASSIVE (no cites necessary, but can be provided if genuinely requested) hydrocarbon inputs. This is not only for the farm machinary but also the fertilizer as well as the processing and transportation.
Food production is LIKELY to decline precipitiously with lower hydrocarbon inputs. At the VERY least there will be a need for more growing areas (problematic) and more labor diversion (not as problematic, but based on our reliance on exporting all labor intensive jobs to other countries, disruptive to say the least)
Food supply is also LIKELY to decline regardless of #1. Note much of the fruits in your farmers markets are now labeled “grown in mexico/honduras/spain/etc…” Solar/Nuke/Fuel Cells are NOT LIKELY going to make it economically efficient to import our food from such distances. This, for one, is what makes cities so vunerable. In this scenairo, local food sources will become primary again. Feeding 10 million or even 1 million with food sources close to population centers of that size would become difficult.
I would also like to play devil’s advocate on the reliance on the economics of alternative energy. I say devil’s advocate because I myself am a devout believer in the idea that necessity is the mother of invention. We will find ways to cope. However, economics cannot promise a certain scientific innovation. There are problems to all the alternative energies that are not being discussed here. I will cite two for the sake of debate.
There is a thing called EROEI – energy returned on energy invested. As I understand it it takes ever increasing amounts of energy as a percentage of the total energy extracted to drill each successive oil well. Thus at some point it becomes “inefficent” to drill of oil whatever the cost. By way of example if I promised you a certain sum of money in exchange for a certain amount of years from your life there comes a point where no matter how much I promise to pay you, you cannot perform if your lifespan is shorter than the years of work I require; not everything can be calculated monetarily. Many peak oil advocates point to this as the principal shortcoming of the economic calculus of Peak Oil., I simply dont know enough about economics to determine if this is true, but it makes logical sense to me.
As for hydrogen, one of the chief problems is storage. “An uncompressed hydrogen gas fuel tank that contained a store of energy equivalent to a petrol tank would be more than 3,000 times bigger than its conventional cousin.” Good oversimplified article on the problem with hydrogen storage and the hope of better technology
Note: the article ends with “If and when its storage difficulties are overcome…”
I would also beware of too much LONG term reliance on nuclear fission energy. Current known easily recoverable reserves of uranium are about 1.2 Mt. Probable reserves with say 4 times current extraction cost are between 5-12 Mt depending on who you read (admittedly the raw fuel cost is only a small part of the overall production cost of nuclear energy but there are limits)
At 1.2 Mt there is about 20 years supply with current nuclear capacity. If we say double or treble the nuclear power plants to take up the slack from oil, even with increased ore reserves there may only be say 30-40 years uranium supply. Useful for us but not necessarily for our children.
This does not take into account breeder reactors but these still have many technical issues and have not proved a promising as they should be so far.
In summary - treat nuclear energy as being as finite as oil
Not at all. Unlike other energy sources like coal and oil, the cost of uranium fuel is only a small part of the cost of providing nuclear power (currently around 3-4% on average, I believe). In fact, if the cost of uranium fuel increased by 10X, the cost of nuclear power would only go up about 1c per kWh. Therefore, we can withstand large increases in the price of uranium without our overall energy costs skyrocketing. And there is enough extractable uranium just in seawater to provide energy for about a million years. There’s even more uranium locked up in granite spread throughout the crust. Unlike oil and coal which exist only in fixed places where the geology is right for it, Uranium is pretty much everywhere.
But we probably won’t even have to go to these exotic means of recovering uranium, because uranium exploration is not anywhere near as developed as oil exploration, simply because there has been enough demand for it. If the price of uranium even doubles, you’ll see all kinds of new investment in Uranium exploration, and our proven reserves will increase dramatically.
The supply of uranium is simply not a problem, and even at 100X the current price would not be nearly as expensive as carbon sequestering and other steps we’d have to take to continue using fossil fuel while reducing greenhouse requirements.
You aren’t seriously disputing that urnaium is pretty much everywhere, including sea water, are you? Or are you disputing that the cost of extracting uranium from sea water is too great to make it cost effective right now (in which case I’ll agree)?
If its the former, here is a cute little website (I can give a better one if its not good enough…but any website with a cartoon at the beginning is a good thing IMO :)):
A quick google will net you tons of websites on this subject.
Not “disputing,” merely inquiring. It’s something I never heard mentioned in physics, chemistry or earth science class.
Never mind cost-effective, how would it work? Wouldn’t uranium dissolved in sea water be in microscopic particles or even monoatomic? How would you separate it out?
I am reasonably confident, by the way, that nuclear power plant technology has advanced to the point where it is safe. France gets most of its power from nuclear plants, and have they ever had a meltdown there? And waste disposal is a problem that is soluble if not entirely solved. (The Yucca Mountain approach is the best in principle if not in details. We don’t want to store the stuff anywhere it can’t be retrieved; our descendants might find a practical use for it.) But fuel supply might well be a limiting factor. Of course, uranium, unlike petroleum, is something we might reasonably expect to find on other planets . . .
No worries (I figured it was rhetorical…figured you were talking about the cost).
My guess was reverse osmosis and some way to cause the uranium (which is a heavy metal) to sink to the bottom to be separated out. This is probably why I never liked chemistry Here was what I found with a quick search:
I’d say it would be quite costly to do and not something you’d do unless traditional sources of uranium somehow because depleted (gods know how…there is literally tons of the stuff all over the place).
I think, as with Stem Cell research, that the US is missing the boat. South Africa and China are making pebble bed reactors. Other nations are moving ahead. The US lags behind because of fear or prejudice. Its interesting to me that two issues have people willing to block them from such different sides of the political fence…anti-nuke types from the old school left wing/environmental movement, and right wing religious types blocking Stem Cell research. Its enough to cause me to tear my hair out sometimes. Frickin neo-luddites!
No, its not entirely resolved for much the same reason though…because there are interests that want to block a resolution to the ‘problem’ and by doing so prevent the US from more agressively pursueing nuclear power. Gods know why, as those same folks are usually the ones who are most worried about the green house effect and global warming. You could ‘solve’ the waste problem fairly easily right now with a combination of recycling (yeah, I know…makes weapons grade materials…doesn’t mean you have to use it that way. I also know that its policy that the US doesn’t do this…but, well, it WOULD solve much of the problem) and internment in a place like Yucca mtn.
If global climate change is real, and if it has humans as its root cause, and if there really is something we can do about it…IMHO our best bet is aggressive use of nuclear power in the US, phasing out of coal and oil fired power plants, and an aggressive strategy to develop hydrogen as a fuel source for private transportation. In the interrim while the nuke plants come on line and hydrogen logistics systems are worked out (I understand from a Wired article a month or so ago that GM and Shell are doing trials of just such a system in D.C. this year…no idea how its going) we increase our use of hybrids (Japan is poised to literally dump the things on us in '06 from what I can tell…and some designs that are both more reliable, get better gas milage AND actually look good :)). Anyway, thats my two cents FWIW. I actually was just lurkin in this thread.
Current known reserves of just about anything are only a few decades, for the obvious reason that there’s no profit in looking for more when the existing supplies are keeping the market satisfied at a reasonably low price. The exceptions are stuff found by accident while looking for something else.
Exactly. That was the fundamental fallacy facing Paul Erlich when he bet Julian Simon that commodity prices were about to rise due to rapidly increasing scarcity. Simon was an economist, and understood why the prices were where they were, and knew he’d win the bet.
while I agree there is lots of uranium in the sea (I read somewhere that no new land-based uranium deposits have been discovered in the last ten years but I will have to chase that one up), at a cost of perhaps 10X current costs one problem is that is based on current petroleum prices. If petroleum becomes scarce and say doubles or trebles in price, that has a flow-on effect effect on the cost of uranium extraction. E.g the production of the polymer that extracts the uranium is petroleum based, the energy needed for refinement etc has to come from somewhere. I would take any any future predictions on the cost of any new technologies with a grain of salt.
Xtimse, this may have been just a poor choice of words, but Hydrogen is not a fuel source. Its a energy storage device that can be used in place of fuel. Since there are no known sources of pure hydrogen, it must be extracted. Currently and forseeable there are no known methods that take LESS energy to extract that hydrogen than the hydrogen contains. Thus is not a source at all, but more a way to convert one form of energy like solar,wind,nuke,etc… into a more stable, usable one. Though Hydrogen’s principal problem as I understand it is storage since by VOLUME its much less energy dense.
Sorry. Yes I am aware that hydrogen is not an energy source but a carrier. Sorry I was sloppy with the language. I was only dipping a toe in here to give my two cents worth and wasn’t really going into how hydrogen would/could be used or how it works (i.e. as an energy carrier or converter as you say). Mea culpa.
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Here was what I found with a quick search: