Peak Energy: A Reply to Kevin Drum, Part 1

Kevin Drum has posted a sequence of 5 posts on peak oil and appears to all intents and purposes to be a Hubbert curve believer, or more accurately a believer in the doom-n-gloom predictions of many who use the Hubbert curve. I’ll look at each of his five posts and comment on each one. This post looks at part 1.

First up in Kevin’s post is this graph.

The first problem is Kevin’s interpretation of this graph,

Basically, it’s Exxon’s view of how much oil the world can produce on a daily basis.

Actually, according to the website where the graph is found, it is the demand for liquids on a daily basis, not necessarily production. Granted in a market that is equilibrium the supply (production in this case) is equal to demand, but that does not really tell us about how much other than what is happening in equilibrium. In other words, production is in part dependent on both what is physically capable of being extracted and what the demand is. A change in either one will change what we observe in equilibrium. To take these numbers as something cast in stone is not a good idea.

For example, later in the post Kevin asks the following question:

Which leaves us with a disturbing question: can OPEC do it? If we accept the fact that the rest of the world has reached (or very nearly reached) its production peak, it would be nice to know if OPEC is up to the job of continuing to pump out ever increasing amounts of crude. And since Saudi Arabia is where most of this extra OPEC oil is supposed to come from, it would be really nice to know if Saudi Arabia can increase its production by 5 or 10 million bpd in the next decade or so. Because if it turns out they’ve peaked too, we’re screwed.

The for Kevin and many other “peak oil = doom” believers is that as the price rises there will be no change in behavior by consumers, firms, etc. This has always struck me as the Achilles Heel of the peak oil doomsters. That no matter how high the price of crude oil gets people are not going to respond to that price change other than to curtail spending in other areas (i.e. in economics lingo this would be a demand curve with only an income effect and no subsitution effect possible, but unlikely).

And as for the view that peak oil believers are cranks; the reason for this is that so far there has not been a single case of any commodity going through a complete Hubbert cycle in the sense that we don’t switch to something else. There have been peaks in the production of a great many commodities many of which are finite in the same sense that crude oil is finite. Yet the end of the world has not occured. One reason is that as the price goes up for whatever good is being used up, the price of previously uneconomical substitutes becomes relatively cheaper. Also, looking for subsitutes becomes relatively cheaper as well. For example, whale oil in the mid 1800’s had a price (in current dollars) that makes oil look like an unbelievable bargain. Then the kerosene lamp was invented and the impact on the whaling industry was almost immediate. By 1860 at least 30 kerosene plants were in production in the U.S. and whale oil was eventually driven off the market.

Some say that this kind of thing is just dumb luck. Really? What about the replacement of labor on farms by machinery? Granted it isn’t a classic Hubbert curve example, but it has many of the same characteristics in that people tend to get all bent out of shape and wring their hands, “What are all those unemployed people going to do?!” If it were to happen today there would be calls for a national strategy (much like the current clamoring for a national energy strategy), there would be talk of soup kitchens, massive unemployment, dogs and cats mating, and it would be a sure fire sign of the End Times. Back then people went looking for other jobs…manufacturing jobs. And incidentally we do have something like this going on today except we call it offshoring/outsourcing.

Part 2

Part 3

FILED UNDER: Economics and Business
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Walter A Nodelman says:

    I have just read “Peak Energy.” It is dated June 2, 2005, written by Steve Verdon, and seen in Outside the Beltway Magazine.

    I refer to the article …
    http://db.riskwaters.com/public/showPage.html?page=281129

    The last sentence angered me….
    “And incidentally we do have something like this going on today except we call it offshoring/outsourcing.”

    You call it OFFSHORING. I call it the crime of OFFSHORING.

    I object to material which is clearly Anti-American. I object to published propaganda which encourages the economic destruction of my country – the United States of America. I object to all of the dozen articles which promote the crime called OFFSHORING. To me, it makes no difference whether the stolen High Technology American jobs are sent to India, or Mexico, or Communist China, or Russia. A financial intelligence magazine should display some intelligence. This most recent article, from my perspective, is offensive to patriotic Americans. This article promotes unemployment in my country, the United States of America.

    What is my perspective?

    I am a High Tech American who has been unemployed since 9/11. I have more than one college degree and more than one decade of high tech IT experience.

    Since 9/11, I have been seeking work. 185 weeks. I am convinced that High Technology IT, as an American profession is going to be dead soon. Exactly as the American television manufacturing industry is today dead. Exactly as the American steel industry of Bethlehem Pennsylvania is today dead. Exactly as the American denim fabric and clothing industry is today dead. The entire American economy is going to be stone cold dead, soon. Just like the economy of Gaza and Somalia.

    You (Steve Verdon) should read these 2 very scary items…

    http://www.onlinejournal.com/Commentary/041505Mazza/041505mazza.html Deindustrialization

    http://www.dissidentvoice.org/Apr05/Whitney0415.htm The Deficit Timebommmb

    Some of us are convinced that the American economy is headed to ruin, — that OFFSHORING is the reason.

    Truth is that in Mexico, India, and Communist China people are being paid about $3.00 an hour and are producing work which is worth that amount. The supply curve of people willing to work at that level of remuneration and quality has equaled the demand curve of corporations who will only pay that much remuneration and then only expect that much quality. Those foreigners have been failing to do the job, and it happens very often. Gartner recently published statements that said 50% of all outsourcing projects will fall short of delivering expected value and will be deemed unsuccessful. I am hearing that quality for the so-called successful projects is laughing-stock. http://www.line56.com/articles/default.asp?ArticleID=6456

    With civil Aircraft Maintenance OFFSHORED to El Salvador and Singapore, the parts are falling off of the aircraft in flight. I hope the FAA is paying attention to Northwest Airlines.
    http://magic-city-news.com/article_3580.shtml
    http://starbulletin.com/2005/04/12/news/story13.html

    Pro OFFSHORING pitches typically encountered are rampant with LIES, with False Statistical Assumptions, and with Genuine Manure about such things as advances of India’s education system over America’s.

    Lies – (one example, – the OFFSHORE Call-center talker’s variety)

    My Name is Tony. I am in Houston Texas. How may I help you ?
    Unlike American based call centers, the OFFSHORE type engage in lies. Many lies. Two lies always before the customer has even completed a first sentence. All of the India OFFSHORE Call Center Talker’s lies are done under orders from the corporate officers. Company policy is to lie to customers.

    Call center talkers in the USA typically spoke English – clean, clear, understandable English. Their expertise was in their brains and it was based on experience, — not on a script scrolling on a screen, and read into a microphone with an unintelligible Hindi accent. And the Americans did not lie to valued customers.

    False Statistical assumptions –

    50% of OFFSHORED projects will fail, Gartner says. That is a projection into the future. It is likely false, as the true number is probably double that.
    http://www.line56.com/articles/default.asp?ArticleID=6456
    http://www.theregister.co.uk/2005/04/19/offshoring_savings_sometimes/

    Research from Benchmark Portal and from Kelly Services recently has determined that 65% of American consumers would change their purchasing patterns if they believed that a company had offshored its call center operations.

    In my opinion, assumption of 65% of American customers fleeing a detected OFFSHORING corporation is an understated statistic. Among the 3,347,100 unemployed High Tech Americans who are victims of OFFSHORING – the number of customers acting as fleeing customers will more likely be near 95%. Among the rest of the not-yet-fired Americans, the number might be a bit less than 95%.

    I personally will NOT do business with an OFFSHORING corporation.

    Genuine Manure – various panel discussions that frequently spout faulty reasons for OFFSHORING such as . . . .

    You can often hire higher-quality, more loyal workers offshore than onshore.

    Most agents in offshore sites have college degrees.

    Canada, New Zealand, and Northern Ireland have arguably better education systems than the U.S.

    As for arguments that say countries have better education systems than the USA – which of those countries have put men on the moon? Was it India ? Ireland ? USSR ? Communist China ? Remember that putting men on the moon and bringing them home alive is 36 year old technology. My country did it multiple times. My company contributed to the national effort, and “we” succeeded.

    Which of the OFFSHORED to – and admired countries have built Aircraft Carriers with combined simultaneous landing and takeoff capabilities? Include on board up to 65 aircraft including supersonic types. Include living quarters for 4,000 skilled people. Include non-refueling ship capability, and operate all twelve active aircraft carriers at once. (All of this is 40 year old technology). Has the Philippines accomplished this? How about India with their impressive education system (and their millions of illiterate street beggars sitting at curbs among the cow dung and the flies) ?

    Which countries have produced education systems that ultimately resulted in breaking world records? Name a country that has designed and built aircraft which can compete with the triple-sonic SR-71? New Zealand maybe ?

    If the USA had not agreed to sell India F-16s recently, India would have to purchase third rate French hardware, or Russian hardware (which crashes in Air Shows). Perhaps India would have no hardware. India is not capable of building anything competitive, itself.

    Which countries have landed robots on Mars and kept the multiple Mars vehicles going doing active mobile research plus daily communications, – for a full year?
    http://marsrovers.jpl.nasa.gov/home/index.html
    Has Singapore accomplished that ?

    How many countries have nuclear powered submarines (a 50 year old technology) ?

    How many of them have suspension bridges (100 year old technology) ?.

    Which of them has transCONTINENTAL railroads dating 150 years back?

    Tell me what new medical breakthroughs have come from India’s medical institutions ?
    Have they invented pharmaceuticals or simply stolen them ?
    http://www.businessweek.com/ap/financialnews/D88VEI800.htm?campaign_id=apn_home_down

    Which of the admired foreign countries has ever created Battleships capable of heaving 16 inch diameter, 1,900 pound shells for 20 miles and hitting a target accurately, as the USS Iowa has done ? http://www.fas.org/man/dod-101/sys/ship/weaps/bb-61-dnsn8709176_jpg.gif
    Japan had one such Battleship, and we sent it to the bottom of the Pacific Ocean.
    Germany had one and the British sent theirs to the bottom of the Atlantic Ocean.
    Argentina purchased a battleship and the British sent it to the bottom of the South Atlantic Ocean.

    India impresses me far far less than it impresses Accenture and Convergsys and Yankee Group and Forrester Research and Gartner, and Mckinsey, and Deloitte.
    India should try to sweep their streets annually before they brag to me about BPO anticipated in the year 2009 (with 50% failure rates).

    India workers who are paid $3.00 an hour are worth every penny of that. Their work shows matching value in their 50% failure rate.

    Praising OFFSHORING, despite its huge failure rate is induced by greedy executives who do not care that they are putting my country into crisis. What crisis ? Simply the destruction of my country via the ultimate devaluing of the United States dollar. These vile American (correction – multi-national) businessmen favor the disemboweling of my country, for their own reasons (wealth). The crime which they commit is job STEALING.

    OFFSHORING is stealing done at the NATIONAL LEVEL. It should be a federal felony.

    It is stealing from my country and my countrymen. Stealing which crosses federal borders. It is the hollowing out and the de-skilling of the (former) superpower known as the United States of America. It is national stealing exactly as if Americans woke up one Thursday morning and discovered that the Statue of Thomas Jefferson has been stolen from inside the Jefferson Memorial on the Washington DC Tidal Basin. Such a crime would generate New York Times half page sized headlines. From my perspective (185 weeks since a paycheck) stealing is criminal behavior whether it promotes the disappearance of 3,347,100 American jobs (including mine), or whether the stealing causes a suddenly empty Thomas Jefferson pedestal.

  2. Walter,

    You’re hysterical. Offshoring is just trade in services and provides all of the benefits of trade in merchandise.

  3. Also, I should add, if you’ve been unemployed 185 weeks, either you aren’t looking very hard or you’ve failed to keep your skills up to date.

    Riddle me this, Batman? Is it a crime when a company develops a new technology that makes others obsolete? That destroys jobs as well.

  4. geo says:

    Interesting analysis.
    I agree with some of your points but have questions about some other points you’ve made.
    Graphs are tricky to interpret and extrapolate out to any certain future. Look at any stock prospectus and you will always see the caveat that past performance does not guarantee future results. However, this does not make them an entirely useless tool.
    Then you qoute Kevin as saying this raises “a disturbing question…”
    My understanding of your point is that the graph shows an equilibrium between supply and demand and that Kevin’s “disturbing question” concerns a breakdown of that equilibrium by the difference between reserve estimates and proven reserves. As you clearly stated,
    “…production is in part dependent on both what is physically capable of being extracted and what the demand is. A change in either one will change what we observe in equilibrium.”
    The same reasoning applies to what can and cannot be produced.
    Saudi Arabia’s Aramco has kept reserve information a closely guarded secret for years, so no outsiders know the true extent of their production capabilities.
    I would argue that Kevin’s point is a valid one. If the Saudi’s cannot increase oil production to meet increased demand, there may be rapid economic consequences around the world.

    Your “Achilles Heel of the peak oil doomsters,” or their belief that consumer behavior won’t change with the increase in gas prices is just silly. Every argument I’ve ever heard from the peak oil=doom group makes it very clear that they’re well aware of the effects of price increases on consumers. Perhaps more so than most.
    Remember, it’s not just gas prices that will rise, but all consumer prices will rise due to shipping costs. Food costs will rise due to increase in costs of petro based fertilizers and shipping. Tourism costs will rise because of fuel costs. Worst of all, these increases will all follow the same patterns of consumer behaviors that they would for any price increases, namely, consumers will buy less products in an effort to keep their homes, cars and lifestyles intact in the hopes of weathering the storm.
    As corporations begin to lose money they too will cut back, on production by laying off workers. At some point unemployment could cause increased home foreclosure’s, homelessness and social unrest.

    I agree with your argument,
    “that so far there has not been a single case of any commodity going through a complete Hubbert cycle.”
    Your examples are very clear and correct. There are some flaws though.
    For instance, you’re correct to say whale oil was much more expensive than kerosene. What you fail to bring up though, is that the cost of extracting oil from whales (a ship, crew, transportation, etc.) was much higher than producing kerosene. Not to mention that kerosene was a more efficient fuel than whale oil in general. It’s no surprise that the whale industry vanished. When gasoline became readily available we were able to power cars, generators for electricity and a myriad of labor saving devices for a very low price. Kerosene is still around of course, but it’s far too inefficient to compete with gasoline.
    As a matter of fact I disagree with you when you say,
    “There have been peaks in the production of a great many commodities many of which are finite in the same sense that crude oil is finite.”
    The refining of crude oil to produce gasoline is far different than any other finite commodity. Nothing compares in portability, efficiency and convenience to gasoline. Nothing like gasoline has ever been available in the history of mankind.
    There are simply no substitutes available, yet. I would challenge you to describe something comparable.

    My final point is your statement,
    “What about the replacement of labor on farms by machinery?” as an example of the typical Hubbert’s Curve, hand-wringing reaction of some groups.
    You say,
    “Back then people went looking for other jobs…manufacturing jobs.”
    My question on that point is, who’s going to be hiring and for what?
    Thanks for the chance to respond.

  5. ultraw says:

    Come on. Give Kevin more credit than that. His analysis isn’t particularly radical and he repeatedly and pointedly steps away from doom and gloom claims. His final point as I understood it is that the negative impacts of short term price shocks (which have occurred several times and are likely to occur again) can and should be mitigated by a comprehensive energy policy.

    And his view of what a comprehensive energy policy is hardly some whacked out ultra-Green approach. You will note that he actually advocates Alaskan drilling as part of a global effort to increase production capacity.

    Actually, according to the website where the graph is found, it is the demand for liquids on a daily basis

    Sort of, but not really. Especially as regards where Kevin was going with this. The chart does show how demand is expected to be filled, but the key to the chart and to Kevin’s analysis is that non-OPEC production is expected to peak over the next ten years and starting around 2010 the portion that will depend on OPEC will rapidly rise – approaching double OPEC’s current production by 2030.

    Exxon is optimistic about OPEC’s ability to do that. Others are more skeptical. But whoever is right, the point of that display is that the non-OPEC sources aren’t going to be able to handle the increase in demand. It’s going to be up to OPEC.

    The for Kevin and many other “peak oil = doom” believers is that as the price rises there will be no change in behavior by consumers, firms, etc. This has always struck me as the Achilles Heel of the peak oil doomsters.

    Perhaps that is the doomsayers Achilles Heel, but it’s not Kevin’s position. Multiple times he acknowledged that higher prices will reduce demand and that natural market forces will in fact compel moves to alternate solutions such as conservation, greater efficiencies, and alternate fuel sources.

    IMO, this is not one of his more liberal positions. He downplays the idea of catastrophy in the offing and supports an aggressive effort to increase production. He just doesn’t want to limit an energy policy to a production orientation, so he also advocates similar aggressive efforts at conservation, efficiency, and development of alternative fuels.

  6. Uncle Albert says:

    And as for the view that peak oil believers are cranks; the reason for this is that so far there has not been a single case of any commodity going through a complete Hubbert cycle in the sense that we don’t switch to something else.

    Totally wrong. Look up the price curve of molybdenum from ’99 until now — and study some more.

  7. ZZZ... says:

    My god, this article is practically delusional. Where the hell has logical thinking gone? Out the window is where. The argument that we will just “switch to something else” is based on the premise that there is “something else” to switch to that will keep society running in the manner to which we have become accustomed. It has been true throughout the history leading up to this period of recent industrialization of about 150 years. It is true that we made switches in fuel sources that, each time, were cheaper and easier to use/process/etc… This time, there isn’t anything cheap/easier/more abundant to switch to, got it? Pull your head out of your ass and do the research. Look at the cold hard facts, and face them without your own wishful thinking for the future. The “alternatives” are a goddamm joke compared to oil. Sure, it is likely we will use the alternatives, no matter how destructive, but none of them will replace oil in the scale we use it today and provide room for future growth in the near future like we are used to. In fact, I’ll wager that even the combination of every alternative known to man of won’t even make up for the depletion of oil a few years after it starts to decline. If the laws of thermodyamics, among other things, prevent a supply from existing, then no amount of demand will change this. The change in behavior you allude to is nothing less than the overhaul, nay, junking of the current “American Dream,” and the entire living arrangement of the country. I think a more apt history lesson than any of your drivel is the Titanic. They called it unsinkable and people marvelled at its colossal size and seeming strength. So what the hell happened? The people running the show got careless and complacent, and the damn thing sank on the maiden voyage. As everyone knows, there weren’t even sufficient plans for evacuation as there weren’t enough lifeboats, they were more there for show. They thought their wealth and ingenuity had made failure impossible. Industrial society based on oil is like the Titanic, and not listening to people who are alarmed by peak oil is like not planning on enough lifeboats and steering the boat recklessly through waters known to contain icebergs. Some people will make out okay through virtue of who they are, luck, etc. but the majority of us won’t.

    As for the offshoring thing, even a child can see that it is a ridiculously bad idea. Sure, it seems like a neat, shiny new toy in the short term that lines the pockets of the rich, and doesn’t seem to do that much harm to the U.S. In the long run, if things are allowed to continue at the current rate, we will look back on it as one of the greatest mistakes ever conceived of for the country, and possibly in the history of mankind. The ability to even think about things in the long term has apparently virtually disappeared in this country.

  8. Demosophist says:

    It seems to me that the core problem is that we have an economy based on labor, rather than capital. If the only thing you have that produces income is your labor then you’ll be treading a hill that gets steeper and steeper, because replacements for your labor input are always arising. It’s called progress. Furthermore, because the lifeboat fix is to pay people to be non-productive then the economy will go through endless inflationary cycles (because purchasing power isn’t tied recursively to productivity).

    The problem is we’re barely talking about this, let alone doing something about it. No, trade in labor isn’t like trade in consumer goods, because consumer goods don’t produce income for those who own them. They may produce liesure or enjoyment, or cellulite, but they don’t produce income, unless they’re capital goods. And we can’t fix the problem by subsidizing labor either, because that’ll just create inflation… loss of purchasing power, etc. I mean, look at France.

    One thing I don’t understand is why Republicans aren’t leading the charge on this, because obviously the more people who earn their income directly from capital the more Republicans there’ll be. Perhaps they just lack imagination, or they’re “sufficing?” Yeah, I know GWB talks about the “ownership society,” but I don’t really get the impression that he knows what it means. It’s just typical sloganeering. The amount of capitalization that would happen as a result of any of his programs is miniscule. This train isn’t leaving the station.

  9. julianj says:

    absolutely agree with ZZZ. Peak Oilers are not doomsters, but realists.

  10. kaz says:

    Steve,

    Oil is not just another commodity but a source of extreme portable power.
    How much power. A glassful of gas will do a round trip to the supermarket in your car carrying passengers and your shopping.How much energy would it require to push that car with it’s passengers for 15 minutes at 30MPH?

    Since the infrastructure is based on oil I would not see many electric/hydorgen cars anytime soon and even these need huge ammount of energy though not in a poratble form.Hydrogen is not an energy source, solar has a low energy return payback and I can not see windmills ever supplying more than 5% of all energy as an intermitetnt source they have to be backed up by normal power stations.

    Nuclear? How many people want a new one in their back yard and how long do they take to build. Also they make a perfect terrorist target.

    So we have to find in the ground somewhere onther source which we can extract taht looks like gasoline. Converting coal could be an option but they are dirty and how many conversion plants are tehre now? Tar sands? Shale oil? Hydrites? They are all possibilities but non of them are enviromenatly friendly and currently not much is produced from these sources.

    Oil is really energy stored from the sun millions of years ago and like a bank accunt it will empty. The better the extraction technology the sooner this will happen and when people are unprepared there will be lot of confusion and a sense of deceit.The economic theory wil no longer hold true and our economy will collapse as it is based on the premise of cheap energy availability.

  11. heyhoser says:

    Maybe you’ve been unemployed so long because you’re (as ZZZ put it) ‘delusional’. But it’s hard to argue with someone who beleives no one has a better educational system than the US. That right there makes me think you’re just spewing rhetoric and propoganda.

  12. Steve Verdon says:

    Your “Achilles Heel of the peak oil doomsters,” or their belief that consumer behavior won’t change with the increase in gas prices is just silly. Every argument I’ve ever heard from the peak oil=doom group makes it very clear that they’re well aware of the effects of price increases on consumers.

    This is not at all silly in that the Hubbert curve in no way whatsoever takes into consideration the price of whatever commodity it is being applied to. About the only Hubbert Peak Oil person I know of who doesn’t go along with the standard picture is Ron Swenson. The problem I have with Swenson’s view is that it appears that he sees the issues of

    Conservation

    Life-style changes

    Subsitution

    Deprivation

    As different choices, that we can have conservation but not life-style changes, that we can have substituion but not conservation. My contention is that when the price goes up, people will start to do many of these things naturally. This what economists call income and substitution effects. The income effect incorporates conservation, deprivation and to some degrees life-style choices. The substition effect incorporates substitution and life-style changes. For most goods you see both effects.

    The other problem I have is this conclusion,

    As corporations begin to lose money they too will cut back, on production by laying off workers. At some point unemployment could cause increased home foreclosure’s, homelessness and social unrest.

    Basically we are looking at the next Great Depression, but with far greater impact. Could it happen? I suppose, but I find it unlikely. I think this scenario is plausible only in the extreme case where there is no substitution, conservation, and life-style chanes and only deprivation is left. Then there would be serious problems. Could this happen? As I already noted it is possible, but it is also possible that a comet previously unknown to astronomers will strike the earth and wipe most life as it has done a few times in the past. Getting worked up about the low probability events strikes me as just foolish.

    The next comment is this one,

    For instance, you’re correct to say whale oil was much more expensive than kerosene.

    Actually what I wrote was that whale oil was much more expensive that crude oil. I was referring to crude oil in today’s prices and bringing the $1.80 in the mid 1800’s into current dollars. Assuming a 3% annual increase in the CPI (on average) the price would be about $170/barrel.

    The other view often expressed is the special pleading for oil and the products refined from oil,

    The refining of crude oil to produce gasoline is far different than any other finite commodity. Nothing compares in portability, efficiency and convenience to gasoline.

    We can say the same thing about labor or human capital. Without labor production is virtually impossible. Similarly the advances we have seen throughout history would have been virtually impossible without human capital. This notion that oil/energy is the most important thing, or it is different strikes me as a red herring. Yes, oil is a great energy source, but so what? Just because we don’t know what will replace it does not mean that it wont be replaced. And trust me if I did know what was going to be the replacement for oil as a source of energy I wouldn’t write about on a blog…nor would I be writing a blog. I’d be figuring out a way to capitalize on it and make a huge fortune.

    Nothing like gasoline has ever been available in the history of mankind. There are simply no substitutes available, yet. I would challenge you to describe something comparable.

    Well it isn’t directly comparable in that labor is not a finite resource, but I think the change over from using labor to machinery in agriculture is one example. If we had today’s government back then we’d be reading about the National Farm Employment Strategy or something like it. Gotta make sure that farm employment will be a good source of employment for generations to come. After all this country was founded on the noble and hard work of farmers! Instead we had a government that didn’t really worry about such things and the change happened. It may not have beem painless or initially a good thing for some people, but where does it say that life has to be devoid of pain and/or hardship?

    Next up is this comment,

    Come on. Give Kevin more credit than that. His analysis isn’t particularly radical and he repeatedly and pointedly steps away from doom and gloom claims.

    Well not in that post. He notes that if the Saudis cannot up production as Exxon foresees and there are reasons to be skeptical of that then “we are screwed”. Now maybe he steps back from the edge of the abyss in later posts, but I haven’t gotten to them yet, have I?

    His final point as I understood it is that the negative impacts of short term price shocks (which have occurred several times and are likely to occur again) can and should be mitigated by a comprehensive energy policy.

    And there in lies the problem. Suppose this works and prices are kept from rising “too much”, then this might well result in the bad outcome that is to be avoided. If the price stays relatively low enough then development of alternative sources of energy or research into alternatives might not take place or be delayed. Then we might see a sudden and abrupt surge in energy prices and get the “screwed outcome” that we are supposed to be preventing.

    And his view of what a comprehensive energy policy is hardly some whacked out ultra-Green approach. You will note that he actually advocates Alaskan drilling as part of a global effort to increase production capacity.

    I didn’t say that Kevin’s views were whacked out ultra-Green or prevented drilling in ANWR. This is like saying, “Kevin has some really neat pictures of his cats!” Yeah, and the relevancy is…?

    Perhaps that is the doomsayers Achilles Heel, but it’s not Kevin’s position. Multiple times he acknowledged that higher prices will reduce demand and that natural market forces will in fact compel moves to alternate solutions such as conservation, greater efficiencies, and alternate fuel sources.

    Not in that post, nor in previous posts on this subject has Kevin noted these effects, so I have to disagree here. Maybe in parts 2 -5 he makes these points, but I haven’t even read posts 2 – 5, yet. I hope to be pleasantly surprised, but I’m not betting on it.

    My god, this article is practically delusional. Where the hell has logical thinking gone? Out the window is where. The argument that we will just “switch to something else” is based on the premise that there is “something else” to switch to that will keep society running in the manner to which we have become accustomed.

    Uhhhmmm, where did I write that we will be able to keep our society running in the manner it has become accustomed too? I am perfectly willing to admit that a switch from oil to another source of energy could change the economy drastically as did the change over to oil. What I am skeptical about is the view that our economy has to slide into the crapper and we’ll all (well those of us left alive) be dressed up like Mad Max or Tina Turner.

    As for the offshoring thing, even a child can see that it is a ridiculously bad idea. Sure, it seems like a neat, shiny new toy in the short term that lines the pockets of the rich, and doesn’t seem to do that much harm to the U.S.

    Boy talk about delusional? Where did I write that offshoring is a neat new shiny toy? I just don’t see it as the end of the world. Really I can’t see how this commenter can get out of bed in the morning. I mean we are running out of oil and that means the world is going to end, and before that we are going to have economic armageddon for the U.S. due to offshoring/outsourcing.

    Oil is not just another commodity but a source of extreme portable power.

    How much power. A glassful of gas will do a round trip to the supermarket in your car carrying passengers and your shopping.How much energy would it require to push that car with it’s passengers for 15 minutes at 30MPH?

    This is a variant of “oil is special” and there will be no changes as its price goes up. For example, perhaps the price of gasoline will rise and instead of loading up the family in the car and driving it to the grocery store I’ll grab a cart/wagon and walk to the grocery store. Is it as efficient? No. But the idea that I must use the car even if I have to push it is just…well stupid.

    Nuclear? How many people want a new one in their back yard and how long do they take to build. Also they make a perfect terrorist target.

    Ahh, I was wondering if this would come up. First off, I haven’t been inside a nuclear plant, but I know plenty of people who have, and let me tell you the idea of terrorists attacking one is silly. For example, San Onofre Generating Station (SONGS) has two reactors and each one has lots of concrete and steel surrounding them. In fact they look like two breat big boobs complete with nipples on them. There is a decent security force there and for added back up Camp Pendleton (a Marine Corp Camp) is right next door. So exactly what are terrorists going to do? Shut it down for a period of time is about all I can think of. As for building them, the idea of NIMBYism and BANANAism are very much part of the problem. It forces use to stay with fossil fuels and also misleadingly plays off of peoples fears of nuclear reactors. Even if you live near a reactor you’d be much better off if you worried about getting run over by a car than worrying about an accident. And as for the next nuclear station, funny I was at a meeting Friday where that question was asked of a Senior VP of our transmission and distribution business unit and his guess was 2015. In fact, several companies are in the process of testing the Nuclear Regulatory Commissions permitting process. When they are done they will have a valid permit to continue seeking to build a nuke plant. Personally I think for most people that when things start to get tough their concerns for environmental issues will tend to fall by the wayside, at least some of the more hysterical ones.

  13. Cerryl says:

    We can say the same thing about labor or human capital. Without labor production is virtually impossible. Similarly the advances we have seen throughout history would have been virtually impossible without human capital. This notion that oil/energy is the most important thing, or it is different strikes me as a red herring. Yes, oil is a great energy source, but so what? Just because we don’t know what will replace it does not mean that it wont be replaced. And trust me if I did know what was going to be the replacement for oil as a source of energy I wouldn’t write about on a blog…nor would I be writing a blog. I’d be figuring out a way to capitalize on it and make a huge fortune.

    Faith.

    Blind faith in human progress. That pretty much sums up the basis of your argument. You admitt that you have no idea what will replace oil, yet you aren’t worried. Why? Well, whenever we had shortages of X in the past, we always found magic elixir Y to switch to and keep the ball rolling. So of course, since this has always worked before, it will always work in the future, even though we don’t have any idea what this replacement will actually be. There is no scientific basis behind this logic, just blind faith that the future will always follow what happened in the past. Maybe you should try looking a little farther back in history than ~150 years. You will find plenty of examples of civilizations that faced a crisis, failed to overcome it in spite of all efforts, and collapsed. So, you would bet your future welfare, the future welfare of your family, and the future welfare of all humanity on the premise that “someone” will find something new to save us that no one else has thought of. If you’re comfortable taking that bet, best of luck to you. I for one am not.

  14. Hal says:

    Yea, faith is pretty much what they’ve been operating on wrt Iraq, the WOT and their energy policy. For someone who is an economist who “works in the energy industry”, one would have expected far more meat. Instead we get a “wish sandwich” – two pieces of white bread and a wish for something of substance between them.

    C’mon Steve, you can do a heck of a lot better than this.

  15. TJIT says:

    Cerryl,

    What policies would you like to see, how would you approach this issue?

    Thanks
    TJIT

  16. Steve Verdon says:

    Blind faith in human progress. That pretty much sums up the basis of your argument. You admitt that you have no idea what will replace oil, yet you aren’t worried.

    Yep, I have no idea. Just as somebody in 1992 had no idea that the internet/tech bubble was coming. Also, many people during the last oil crisis believed we’d see oil at $100/barrel. That is how they justified spending billions on nuke plants. That we can’t see the future in specific terms is pretty much a given. But we can see trends and common elements in different situations.

    So of course, since this has always worked before, it will always work in the future, even though we don’t have any idea what this replacement will actually be. There is no scientific basis behind this logic, just blind faith that the future will always follow what happened in the past.

    Not quite. There is a logic, it is a probabilistic logic. Think of it this way, we have an event, E, that could be bad or good. Now, given the past history with similar events the question is how do we update the probability,

    Prob(Bad|E) and,
    Prob(Not Bad|E).

    That is, how do we formulate Prob(Not Bad|E, K) where K is the vector of previous instances where the market has “bailed us out”.

    Lets look at some other doom-n-gloom scenarios. Remember the nuclear war over food? Oh…yeah I forgot that doom-n-gloom prediction completely and totally failed to materialize. Let me see what else was there, how about the first oil crisis? The Saudis were going to be incharge of everything. New world order and all that rot. How come we haven’t run out of copper?

    Maybe you should try looking a little farther back in history than ~150 years. You will find plenty of examples of civilizations that faced a crisis, failed to overcome it in spite of all efforts, and collapsed.

    Sure, I don’t discount that probability, I don’t set it to zero, I’m just ready to set it to 1 either. Sure we could go back further and look at older civilizations that didn’t have the technology nor the market structure we have today. Seems to me these analogies may not be all that great either.

    So, you would bet your future welfare, the future welfare of your family, and the future welfare of all humanity on the premise that “someone” will find something new to save us that no one else has thought of. If you’re comfortable taking that bet, best of luck to you. I for one am not.

    Isn’t this what you would do even with a national energy strategy? Aren’t you betting on a few policy makers coming up with something good that really does work and not serves the needs of special interests?

    Well, best of luck to you out there in your cabin with your supply of water, forge, and hunting rifle. I’m sure life as a survivalist will be quite fulfilling.

  17. So you don’t want that ammo shipment, Steve?

  18. geo says:

    Steve,
    I guess I’m having a problem understanding what you’re trying to say with your statement,

    “…that as the price rises there will be no change in behavior by consumers, firms, etc. This has always struck me as the Achilles Heel of the peak oil doomsters. That no matter how high the price of crude oil gets people are not going to respond to that price change other than to curtail spending in other areas…”

    because I still think it’s, well, silly. Maybe even more so when you try to defend the position by saying,

    “This is not at all silly in that the Hubbert curve in no way whatsoever takes into consideration the price of whatever commodity it is being applied to.”

    Of course it doesn’t take price into consideration. It’s a tool to predict the potential future availability of a given finite commodity. Predicting a “change in behavior by consumers, firms, etc.” would use an entirely different graph based on different criteria. You’re comparing apples to oranges from what I can see.
    As I said previously, most “peak oil” watchers I know are well aware of potential changes in human behaviour as a result of an oil crisis. In fact their focus is less on the “sky is falling” scenario and more on the ramifications that might result from the end of easily obtainable cheap oil. In other words, consumer spending habits will have to change in order to meet the needs of simply surviving.
    Perhaps that’s why you’re having a problem with my conclusion that,

    “As corporations begin to lose money they too will cut back, on production by laying off workers. At some point unemployment could cause increased home foreclosure’s, homelessness and social unrest.”

    You’re right, this could be like the “Great Depression but with far greater impact.” Why do you find it so unlikely?
    You say,

    “I think this scenario is plausible only in the extreme case where there is no substitution, conservation, and life-style chanes and only deprivation is left.”

    We’ve already established that consumer spending will create lifestyle changes resulting in conservation, when you said (and with which I agree),

    “My contention is that when the price goes up, people will start to do many of these things naturally. This what economists call income and substitution effects.”

    How long do you think it will take businesses to react with cut-backs to the loss of profits as consumers substitute disposable income for the needs of survival?
    If there were an energy source readily available to replace oil, I would agree that the scenario is as remote as an unkown comet striking the earth. However, without a replacement for oil and the acknowledgement of many who’ve studied the issue to conclude that at some time in the not too distant future oil, a finite resource, will no longer be able to supply demand, I think it’s anything but foolish to take the plausibility of economic catastrophy as something of a far less than remote possibility.

  19. kaz says:

    Oil is not just another commodity but a source of extreme portable power.

    How much power. A glassful of gas will do a round trip to the supermarket in your car carrying passengers and your shopping.How much energy would it require to push that car with its passengers for 15 minutes at 30MPH?

    You wrote
    This is a variant of “oil is special” and there will be no changes as its price goes up. For example, perhaps the price of gasoline will rise and instead of loading up the family in the car and driving it to the grocery store I’ll grab a cart/wagon and walk to the grocery store. Is it as efficient? No. But the idea that I must use the car even if I have to push it is just…well stupid.

    My comment was meant to show how much power is available for so little.If you have to do a delivery run on food that is 100 miles per day as they do now for the supermarkets the cart thing may become difficult.If the fuel is 5 times the price guess what you will be paying for your grocreries.

    Nuclear? How many people want a new one in their back yard and how long do they take to build. Also they make a perfect terrorist target.

    You wrote

    Ahh, I was wondering if this would come up. First off, I haven’t been inside a nuclear plant, but I know plenty of people who have, and let me tell you the idea of terrorists attacking one is silly. For example, San Onofre Generating Station (SONGS) has two reactors and each one has lots of concrete and steel surrounding them. In fact they look like two breat big boobs complete with nipples on them. There is a decent security force there and for added back up Camp Pendleton (a Marine Corp Camp) is right next door. So exactly what are terrorists going to do? Shut it down for a period of time is about all I can think of. As for building them, the idea of NIMBYism and BANANAism are very much part of the problem. It forces use to stay with fossil fuels and also misleadingly plays off of peoples fears of nuclear reactors. Even if you live near a reactor you’d be much better off if you worried about getting run over by a car than worrying about an accident. And as for the next nuclear station, funny I was at a meeting Friday where that question was asked of a Senior VP of our transmission and distribution business unit and his guess was 2015. In fact, several companies are in the process of testing the Nuclear Regulatory Commissions permitting process. When they are done they will have a valid permit to continue seeking to build a nuke plant. Personally I think for most people that when things start to get tough their concerns for environmental issues will tend to fall by the wayside, at least some of the more hysterical ones.

    I have one word. Chernobyl. Ask the people there how safe their plant was or at least they were led to beleive byu their govt,
    Do you really beelive the US will never ever have a nuclear accident?
    Human error can sometimes overide the failsafe systems.
    What about earthquake damage which you have no control over?
    As far as the terrorists go they do not have to be dressed in black masks or wear turbans. What about someone working inside the plant that has a bad day and damages the control system.
    Once a meltdown begins it can not be stopped.
    You have heard of someone losing it with a gun and killing a few staff and himself. You can not rule out that someone may decide to go off with a big bang.Isn’t that a possibility?
    Why do they have city wide evacuation procedures around all nucler plants if they are totaly safe.Because they are not totaly safe and a meltdown is catastrophic.

    Anyway nuclear requries lots of oil to build, maintain and supply so it is not along term solution and Uranium is also non renawable with 50 years max supply.

  20. Kaz,

    I have been in a nuclear facility and they are quite safe; in fact, I worked in the industry for eight years. Chernobyl was a bad reactor design that has no counterpart in the U.S. Existing reactor containment buildings are designed to be hit by airplanes and more without a release.

    As for running out of uranium, there are multiple isotopes, one of which (I can’t remember the number), that would support our power needs for thousands of years. The Wikipedia article on the Hubbert peak mentions it.

    It seems to me that all of the doomsayers are hanging their hat on the notion that we can’t describe, in specific terms, how we will replace gasoline. I agree with Steve that incentives matter and we will adapt.

    In fact, hydrogen may not be quite as far removed as some suggest. GM already has built a real prototype car that can run on liquid hydrogen. That leaves the problem of producing the hydrogen and I read an article a few months ago about nuclear reactors placed over ocean water that would power the process of creating the hydrogen. Will it happen? I don’t know, but I see no cause to be worrying about impending doom at this point.

    Hydrogen seems to be the best bet (both GM and Shell seem to think so) and over the course of a couple of decades we could move to a new fuel.

  21. Steve Verdon says:

    I have one word. Chernobyl.

    The reactors in the U.S. are totally different than the reactors than Chernobyl. Further, the U.S. and most of the rest of the world use fart stricter standards than Communist Russia. I think one could make the case that this is one of the benefits of living in a democracy.

    My comment was meant to show how much power is available for so little.If you have to do a delivery run on food that is 100 miles per day as they do now for the supermarkets the cart thing may become difficult.

    Moving goal posts is boring.

    Of course it doesn’t take price into consideration. It’s a tool to predict the potential future availability of a given finite commodity. Predicting a “change in behavior by consumers, firms, etc.” would use an entirely different graph based on different criteria. You’re comparing apples to oranges from what I can see.

    Right, which is why the usual attempts to fit a Hubbert curve to real world data have to have 2 maxima’s. One for the peak during the oil crisis. could the sudden increase in price have had anything at all do with that local maximum? How silly of me to look at the data and think that. That is just ridiculous.

    You’re right, this could be like the “Great Depression but with far greater impact.” Why do you find it so unlikely?

    Because the chain of reasoning is too simplistic. It discounts lots of other activities that will mitigate the impact.

    If there were an energy source readily available to replace oil, I would agree that the scenario is as remote as an unkown comet striking the earth.

    Again this all hinges on the fact that you can’t see the next replacement at this point when oil is still relatively cheap. What a shock, oil is cheap and nobody has come out with a replacement. We are all going to die! The fight to feed humanity is over…oh no wait, the fight to fuel humanity is over, yeah that works much better since the first one turned out to be such a joke.

    However, without a replacement for oil and the acknowledgement of many who’ve studied the issue to conclude that at some time in the not too distant future oil, a finite resource, will no longer be able to supply demand, I think it’s anything but foolish to take the plausibility of economic catastrophy as something of a far less than remote possibility.

    I’m sorry I just see these doom-n-gloom things come and go. I’ve read about the world starving to death and the resulting nuclear wars…which never appeared. The stock market crash and great depression (of 1990). We were supposed to be in the next ice age, now it is global warming. Let us not forget Y2K and all the idiocy that brought about. I recall one lady completely disconnecting from the electricity grid because she knew…knew dammit that the grid was going down and had this whacky idea about how much electricity was needed to bring a grid back up. And how come we haven’t run out of copper, tin, etc.? Whatever happened to the Club of Rome? They still out there peddling their Armageddon theories? I thought they had us all dead in 1993 or something, what happened there? Rounding error or something?

    Could this be it? Could we all die in a blaze of glory as the oil runs out? Sure I suppose it is possible, but I put it in the same catagory as other doom-n-gloom predictions: Not Reliable. Even the weaker predictions of economic collapse I just don’t find credible. It all hinges on using oil to the bitter end and not even looking for an alternative. You say, “What alternative?!” I keep pointing out that in 1845 nobody would have predicted the end of the whaling industry and certainly not in 1810.

  22. geo says:

    Finally, this most interesting debate comes down to a fundamental question when you say,

    …this all hinges on the fact that you can’t see the next replacement at this point when oil is still relatively cheap. What a shock, oil is cheap and nobody has come out with a replacement. We are all going to die!

    You’re correct, my argument does hinge on the inability to see what the “next” replacement might be.
    From my perspective though, it seems as if you’re unwilling to acknowledge the potential problem and are anticipating an alternative based on an unexpected technological advance that will miraculously present itself.

    We’re not as far apart on the issue as it might appear. We all know the story of the “Boy Who Cried Wolf,” the same applies to the numerous “end-o-da-world” stories we’ve been hearing for years. It gets tiring. In the end though, the wolves really do show up and the boy is screwed.
    The point I’m trying to make is that there’s a great deal of evidence showing the depletion of a finite resource that’s been driving our economy for the last 150 years. How soon or how bad, we don’t know yet. We do know that it’s inevitable. So, do we wait for some unforeseen saving source of energy, or do we start to address the problem now, while oil is still relatively cheap?
    There will have to be some transition period for infrastructure and conversion, this will take time and energy. It will most likely require the energy supplied by oil (you can have a rock of uranium, but you can’t build a reactor with it, regardless of its isotope).
    So, the question becomes, do we waste the time and oil we have remaining on the anticipation of a better alternative, or do we start to look for it now?
    I think this is the fundamental question that peak oil watchers are trying to bring to the table.
    There’s merit to healthy skepticism (such as yours) and there’s merit to anticipating a future that could be frightening (such as mine) and there’s room at the table for both views.
    Ignoring or over reacting to the issue is anathema to progress.

  23. I have a few questions for Steve.

    You don’t really seem to be arguing that peak oil won’t happen, just that the doom’n’gloom is unnecessary. Let’s forget about that and look at the economics of oil supply disruptions, let’s talk about the near term rather than the unknowable far term.

    1. Why did the first oil shocks cause inflation?
    2. Why do banks raise interest rates to curb inflation?
    3. Considering the high level of consumer debt in the U.S and other first world countries like mine (Australia), what would be the economic outcome of interest rate hikes coupled with stalled growth due to high commodity prices?
    4. What is petro-dollar recycling and how does it relate to oil-shocks.

    Steve most of your ideas seem to be in the ‘Julian Simon defeated Paul Erlich’ mode. I think in this debate it was too early to tell, but we will be finding out very soon. What the doomers are merely pointing out is this: peak oil = peak energy. That is all. If they are right Simon is wrong.

    Engineer and Author Russell Finley, makes this point.

    Commodity economics can be illustrated with a pyramid. The best and most economic ores are on the top, once they are depleted we move onto substitutes. Wow, there is more of the substitutes than there was of the good stuff! Fantastitic this shit is going to go on forever! The caveat to this is energy. It takes more energy to exploit the new larger less concentrated mineral ores than the easy good stuff.

    Energy commodities on the other hand don’t fit this pattern. You have to inverse the pyramid. Because all the shittier types of energy provide less net energy. As you move down the pyramid you are going to run into problems.

    So using your simplistic economic analysis, society will adapt. I’m not going to argue with that, off course they will. The fact is if you understand physics – particularly thermodynamics – you will understand that this could mean a very gloomy future.

    So should we wait for the free market to force us to adapt? You seem to think a false market signal is plausible? Wouldn’t it be better to start now, if we don’t have to face this it will be our children. I personally think a wait and see policy is lunacy, and absolutely irresponsible.

  24. kaz says:

    I have one word. Chernobyl.

    The reactors in the U.S. are totally different than the reactors than Chernobyl. Further, the U.S. and most of the rest of the world use fart stricter standards than Communist Russia. I think one could make the case that this is one of the benefits of living in a democracy.

    Reply

    So you say that a nuclear accident is totaly impossible even caused by an earthqake, a component failure or human error?
    The 2 space shuttles that blew up and killed everyone on board were made in democratic USA and most technlogically advanced then why did they blow up?

    The point is that they can and it is possible at some stage.It may be remote and you don’t know when, but when it happens the devastation is catastrophic. Do you want you family subected to that type of danger if there was a choice of not having to? Or do we have no choice?

    Also ther is no solution for the waste apart from putting it into DU bombs and pollution another country with this rubbish.

  25. The point is that they can and it is possible at some stage. It may be remote and you don’t know when, but when it happens the devastation is catastrophic.

    Or a nuclear plant could get smacked by a kilometer-wide asteroid traveling at 20 km/sec. That’d spread radioactive waste far and wide, no question.

    Of course, there wouldn’t be anyone left in that hemisphere to complain…

    A Chernobyl-type incident is literally impossible with our nuclear plants. Read up on it, and you’ll see. This is not to say that some sort of accident cannot happen, but a Chernobyl incident is, by definition, impossible here. If you’re going to go doom-crying, please do have the sense to have an idea of what you’re talking about.

  26. Steve Verdon says:

    So you say that a nuclear accident is totaly impossible even caused by an earthqake, a component failure or human error?

    No, you are saying that. What I’m saying is what Slartibartfast said, Chernobyl is impossible here. Further, similar accidents are less likely here, IMO.

    The 2 space shuttles that blew up and killed everyone on board were made in democratic USA and most technlogically advanced then why did they blow up?

    You sure are beating the crap out of your strawman. I’m impressed. That takes alot of mental courage to step, offer up a strawman of your opponents views, then beat the ever loving crap out of the strawman. Poor thing can’t even defend itself.

    Do you want you family subected to that type of danger if there was a choice of not having to? Or do we have no choice?

    You don’t drive much do you?

  27. kaz says:

    Steve,

    All I am making a point about is that nuclear power is unsafe because if the reactor fails in the wrong way the results are catastophic.
    I don’t think you can argue with that.

    Is it possible that this may happen caused by a resonable occurance like componet failure, humman error, deleibarate human intervention or earthquake? You have to say it may be but it could happen and the chances may be 10,000 to one however if it happens 100,000 people can be affected in a bad way.

    Why have no reactors been built in the US since the 70’s?

    If I drive my car I can not hurt 100,000 people no matter what type of crash I have and in most instances I do have control over what happens.

    Anyway I don’t think nuclear power is as safe as the proponents say and it is not a long term solution to our energy problems.

    Our answer is in conservation and lifestyle change.This is opposte to our current economic system which will be obsolete when our energy becomes scarce and extremly expensive.

  28. kaz says:

    One more thing that is probably the most important.When oil does run out it may be difficult to maintaning these nuclear reactors which need a working supply chain dependant on oil, we are leaving a legacy for future generations that may be hard for them to control.

  29. Our answer is in conservation and lifestyle change.This is opposte to our current economic system which will be obsolete when our energy becomes scarce and extremly expensive.

    So how do you mandate ‘lifestyle change’? You cannot make people consume less and conserve. It is antithetical to human nature. I have a friend at work who lived through socialist Hungary, he said the other day that the system wasn’t so bad and it would of worked if there weren’t so many people abusing it. You cannot deny competition and status seeking in human beings, you may as well try to get kangaroos to walk instead of hop, It is human nature.

    We are going to need more nuclear power plants to keep our cities running. Personally I would rather that than more coal fired power stations. Kaz, you say “when our energy becomes scarce and extremely expensive”, yet you want to deny an important potential energy source to people who will desperately need it? Why do you think James Lovelock the conceiver of the Gaia hypothesis supports nuclear power? Please do some more research on this subject, your thinking is a very out-dated.

    Steve are you going to address my above post or continue waffling with these nuclear NIMBY’s?

  30. Kaz says:

    Ok Steve

    You win. We wont have a shortage of oil for ages and we will invent new energy sources way before it has any effect on us and, it will be pretty much business as usual because the economy will take care of it.We can build nuclear power stations on demand, 50 a year if need be and run a hydrogen transport system with fuel cell cars trucks ships and planes.All wars in the middle east will cease beacuse oil will not have much value compared to our new energy wich will not run out for generations at least if ever, and democracy will spread throughout the world as we never need to rely on another country again for energy supply.
    Yep this is what the future holds for us if we wish hard enough and have ready cash.

  31. Why have no reactors been built in the US since the 70’s?

    Because of you, kaz, and because of people like you. People who find it easier to speak out on a subject without ever having bothered to make the barest acquaintance with fact on said subject. Certainly it wasn’t because of 3-Mile Island, which released radiation much lower than background level. You radiate yourself at a higher level than TMI radiated to anyone. You are aware that you’re radioactive, aren’t you?

  32. Steve Verdon says:

    So how do you mandate ‘lifestyle change’? You cannot make people consume less and conserve. It is antithetical to human nature. I have a friend at work who lived through socialist Hungary, he said the other day that the system wasn’t so bad and it would of worked if there weren’t so many people abusing it. You cannot deny competition and status seeking in human beings, you may as well try to get kangaroos to walk instead of hop, It is human nature.

    I’m not denying it, in fact I am counting on it. I am counting on that competition to increase prices in the market place. Increases in prices can bring about lifestyle changes, less consumption, etc.

    As for the NIMBYism, that is a big problem. In fact, I’ve been hinting that part of the real problem here is government. How, well NIMBYism is one place to start.

    Kaz,

    All I am making a point about is that nuclear power is unsafe because if the reactor fails in the wrong way the results are catastophic.

    Technically so are car accidents. How many tens of thousands have died in the last 10 years? Maybe even hundreds of thousands? Compared to how many deaths due to catastrophic nuclear accidents. You are simply scared of one, and not the other because you don’t have any sense at all of the relevant probabilities.

    And Slartibartfast is right. We don’t have nukes because of the hysteria you and others attach to a nuclear generating station. You look at it and see your death. I look at it and see electricity that is both reliable and safe. Oddly enough you look at cars and see transportation, amusement, efficiency, but apparently no dangers whatsoever. I see the same things, but also the dangers.

    One more thing that is probably the most important.When oil does run out it may be difficult to maintaning these nuclear reactors which need a working supply chain dependant on oil, we are leaving a legacy for future generations that may be hard for them to control.

    You don’t control much anything right now! Who controls the price of oil? OPEC? How come a few years ago it went to $10/barrel? Who controls the price of gasoline? The Saudi’s? How come gasoline prices can spike when oil prices are low? Maybe it has to do with too few refineries and the large number of boutique blends? What…you didn’t think of these things?

    Control, control, control. That is the bottomline problem with the Peak Oil guys and people like Kevin Drum. They see these things as problems because they fear things will “spin out of control” when they were never in anybody’s control (at least not completely). This illusion of losing control is what scares them. The punchline is that they nor anybody were really in control in the first place.

  33. Plus, if you believe this, other forms of power generation have already killed hundreds of thousands of people. I guess it’s simply a matter of picking and choosing your causes, with a little inability to comprehend scaling thrown in.