the current leader of the Apocalypse Cult, George Monbiot, was explaining that the world is about to run out of oil and so we’d be better off living in wattle huts without electricityBut is there an energy crisis? Mr Kerevean doesn't think so:
HERE’S what happens next. The oil companies are now going to go on the rampage to find new oil sources. A decade from now, gallons of the black stuff will be coming out of our ears, and the price will plummet. Meantime, things may get a little rocky and economic belts will be tightened, but hopefully not quite so tightly as in the 1970s.Indeed, this process is already under way.
I was at one of George Monbiot's sessions at the Edinburgh Book Festival but was not selected to ask a question. Mr Monbiot spoke at length about the "price" of oil without seeming to understand what the word price actually means. A price is a ratio. In this case he was telling the audience that oil now costs $50 a barrel. He could equally have told us that oil now "costs" fifteen measures of whisky per barrel, or, for that matter, four festival sessions with George Monbiot! It's no good examining the denominator: a "barrel of oil" unless we also look at the numerator: a "dollar".
For quite a few years now the US Federal Reserve has been printing dollars like there's no tomorrow. This of course means that each dollar buys less and less. Oil is priced in dollars and therefore the price of oil will continually rise, other things being equal.
For anti-capitalists like Mr Monbiot it's much easier to go on and on about "shortages" of resources rather than examining the politically-controlled monetary system that's behind rising prices. But if Mr Monbiot were to have a look at how money is created by governments he would realise that the US authorities aren't pro-capitalist at all and that would never do, would it?
4 comments:
Comments made on previous template:
Neil
Hydrogen is a storage method not a power source - there are no hydrogen wells.
According to Professor Cohen of Pittsburg U there is sufficient uranium dissolved in seawater (not the best source but a calculable one) to keep our economy running at present rates for 4.5 billion years. I suspect something lasting may be found before then.
2 September 2004, 20:45:30 GMT+01:00
– Like – Reply
Roland Watson
I think we need to press ahead with all economical forms of renewable and non-renewable forms of energy.
Nuclear - yes. This would shore us up for a few decades while something more lasting is found.
Hydro - already a form in use for decades, so the best sites have gone. Wave power is there but not a big provider of energy.
Solar - We need to improve the efficiency of cells. Just now they only convert less than 10% a best to electricity.
Wind - Also good, plenty of wind farms springing up all over the uk but projections are for 10% - 20% as a source of energy.
Hydrogen - not very good at all IMO!
All told, no one single source above can be a solution on its own. Bringing them all together wil make up the oil/gas shortfall, but I fear they may only plug say half the gap - and that is if we act quickly and determinedly!
As an experiment on this problems of this scenario - how would planes get around without oil?
31 August 2004, 17:20:29 GMT+01:00
– Like – Reply
David
Roland,
The rules of geology can't stop non-fossil fuels from developing, right?
Think nuclear, hydro, hydrogen, solar, etc.. I trust the market, if we leave it alone.
31 August 2004, 00:52:04 GMT+01:00
– Like – Reply
Roland Watson
Technological advances have two effects:
1. They gain access to more oil reserves.
2. They can also extract any oil quicker.
IMO, the two tend to cancel each other out.
Also deep water oil is less amenable to secondary and tertiary extraction techniques simply because it is too economically prohibitive to do this in several thousand feet of water.
As for tar sands, yes they are economically viable, but they will never approach the extraction rates of 80+ million barrels a day required to feed this oil hungry world. I thin k they hope to double production to a few million barrels/day over the next TEN years. Too little, too late.
I am all for free market solutions, but even the free market is constrained by the laws of geology.
30 August 2004, 17:30:40 GMT+01:00
– Like – Reply
Alastair Ross
The British Government's compulsory acquisition of 51% of BP during the First World War illustrated how 'free' the market is permitted to be when things get really tough. Indeed, control of BP remained in Government hands until the 1970s. Also we may be guilty of projection if we ascribe to OPEC's preponderantly Muslim membership our rational appreciaton of the free market.
29 August 2004, 23:05:49 GMT+01:00
– Like – Reply
David
Opec can only regulate supply for members, and even then, it's merely a facade. We in the west can have a free market regardless of how free everyone elses' markets are. So, if OPEC puts an unnatural clamp on oil supplies, we find new sources of energy and new technologies (or, rather, implement the ones that have been quietly developing). Facing lower demand, OPEC would have no choice but to let the oil flow. And if not, well we'd progress without them. A victory for free markets in any case =) Which is why we must open up to free trade once more, regardless of what the other guys do.
Also, in a free market, we cannot depend on oil. It is not a right.
29 August 2004, 16:47:50 GMT+01:00
– Like – Reply
Neil
"I accept there is a finite amount of hydrocarbons on Earth. How do you know that we are "nowhere near this limit"?
Known resources are expected to last to 2050, as Steve pointed out at the start of this, it is clear that there are substantial, possibly enormous, quantities of geological methane, most of Antarctica & most of the 3/4 of this planet underwater haven't been properly explored. I grant that recovery of the latter would require a higher technology than currently available, indeed that was my initial point.
29 August 2004, 11:59:37 GMT+01:00
– Like – Reply
Geoff Matthews
Alberta, Canada, had an estimated 1.7 trillion barrels of oil available in their tar sands. Venezuale has 1.8 trillion. This oil is much more expensive to process, but with prices in the mid-fourties, Companies in Alberta are making a nice profit (they reportedtly need oil at about $22/barrel to break even).
I'm not about to worry quite yet.
Oh, and the obligatory link:
http://www.yorku.ca/mearl/energy/tarsand.htm
And, as far as environmentalism is concerned, the strip mining mentioned in the link isn't quite accurate. Companies in Alberta have developed ways to process the tarsands on site, leaving the sand behind while taking the oil.
29 August 2004, 06:28:24 GMT+01:00
– Like – Reply
Alastair Ross
A free market in oil isnt possible as long as OPEC exists to regulate supply. This cartel is surely illegal and,as it is headquartered in the EU(Vienna), perhaps OPEC could be sued for restraint of trade under EU laws.
29 August 2004, 02:55:12 GMT+01:00
– Like – Reply
David
The real issue, in the long run, isn't how much oil we have, it's how free of a market do we have. If we have a free(er) market, the adjustment to oil alternatives will be smooth, when compared with the rocky transition we can expect if governments continue to pile regulations, barriers, and taxes onto businesses.
Nice site, by the way.
29 August 2004, 00:59:36 GMT+01:00
– Like – Reply
James Hammerton
Neil writes:
"Obviously there is a finite amount of hydrocarbons on Earth (this does not apply to non-fuel resources like metals which can be reused as long as the refining technology exists) but we are nowhere near this limit."
I accept there is a finite amount of hydrocarbons on Earth. How do you know that we are "nowhere near this limit"?
James
29 August 2004, 00:02:10 GMT+01:00
– Like – Reply
Neil
"The remaining reserves will get increasingly more and more difficult to get out, hence the downward slope of extraction."
This only works in a society where technology is standing still. Had there been no technological progress our extraction capacity would still be the same as in 1850 when world oil reserves were sufficient for 4 years. In 1970 it was going to run out in 20 years.
Obviously there is a finite amount of hydrocarbons on Earth (this does not apply to non-fuel resources like metals which can be reused as long as the refining technology exists) but we are nowhere near this limit.
"This subject of peak oil has been hijacked by the left and environmentalists and so ipso facto has led to a distancing by libertarians and right wingers"
True except that I do not regard the hijackers as either left or environmentalist. They are Luddites pure & simple & have themselves hijacked both environmentalism & leftism. There was nobody, not even Adam Smith, more supportive of technological progress than Marx.
True envionmentalists recognise that hi-tech, because it implies more efficient use of resources, produces less pollution not more. A touchstone for this is the nuclear issue. Anyone concerned about the environment is worried about increasing CO2 which nuclear doesn't produce - any "environmentalist" who supports Kyoto & opposes nuclear power is a Luddite flying false colours.
27 August 2004, 22:11:38 GMT+01:00
– Like – Reply
Roland Watson
The link about naturally "rechargeable" oil fields is a bit of a panacea and probably a red herring if all that is happening is one oil reservoir leaking into another.
Does it matter? It is recognised that the North Sea oil fields are in decline by up to 7% p.a., no "recharging" going on there! Britain will soon be a net importer of oil and gas.
The repletion of reserves by new discoveries is also a red herring. Taking the discoveries by Cairn Energy in India as an example. They found a few fields which total less than 2 billion barrels of economically extractable oil. Now, the world consumes about 29 billion barrels a year. So, Cairns' paltry discovery will keep the world going for about 25 days!
New discoveries are getting fewer and smaller whilst demand is going up and up thanks to Asia and others.
Assuming 1 trillion barrels are yet to be recovered, that gives us a lifetime for the remaining oil age of about 35 years as someone stated above. Unfortunately, this is not simply a straight line of production. The remaining reserves will get increasingly more and more difficult to get out, hence the downward slope of extraction.
The story ends when it takes more than the energy of one barrel of oil to get one barrel of oil out of the ground.
This subject of peak oil has been hijacked by the left and environmentalists and so ipso facto has led to a distancing by libertarians and right wingers. Don't necessarily just a subject's worth by who is advocating it, look at it on its own merits.
27 August 2004, 15:31:01 GMT+01:00
– Like – Reply
Andrew Duffin
I don't think we need to panic. There have been only about 35 years of oil supplies "left" for as long as I can remember.
Starting in about 1964.
27 August 2004, 12:34:07 GMT+01:00
– Like – Reply
Neil
Steve is right there may be enormous amounts of untapped natural gas & technically it should be possible, though more difficult, to run our economy on compressed liquid methane instead of petrol.
With the recent increase in gas prices it is worth pointing out that the recent david Hume Institute energy report said producing electricity by gas cost 2.1p per unit, nuclear 2.3p & everything else more with windmills at about 8p. Nuclear must now be cheapest - I also happen to think it is the safest, most reliable & least polluting as well.
26 August 2004, 20:22:44 GMT+01:00
Post a Comment