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Over a Barrel
Fellow reader-blogger clearthinker has observed before that the oil market is now in the hands of speculators. Indeed, it seems to be the case that Saudi Arabia can no longer lend a helping hand at the President's behest. It should come as no surprise then that Goldman-Sachs is predicting a "super-spike" up to $200/barrel in the coming months.
Let's try and consider this in the context of the recent talk of "relief at the pump". Politicians and auto-makers alike are pandering to people who don't yet understand the scope of the problem that we are all facing. All of the evidence indicates that we have passed the peak of global oil production. It will only get more difficult to retrieve, and thereby more expensive, as we move forward.
When will we hear an honest treatment of these problems from our governmental leadership? We will become serious, as a whole society, about re-organizing our infrastructure in order to meet the challenge of diminishing petrochemical resources while there is still some opportunity to mitigate the coming crisis?
Most of you are aware that I support Barack Obama for President, but I do not exclude him from these criticisms. While I do think that he seems to exhibit a slightly better understanding of energy issues than either Clinton or McCain, this is not good enough. I can hope that he's merely playing it close to the chest because of how politically volatile it could be to embrace the reality of peak oil, but I won't excuse him or anyone else in an influential position of leadership from stepping up on this issue.
Even though I would quibble with some of his details, Al Gore has been incredibly successful in bringing the scientific evidence to bear on the issue of climate change. Perhaps what we need is an Al Gore for peak oil. I'd like it very much if this could be Obama since he appears to be in position to assume the Presidency, but it doesn't necessarily have to be him. However, whether or not Obama becomes the next President the issue will still stand. Whoever assumes the office will, at the very least, need to be someone who is willing to listen and take the evidence into consideration.
Much like with the issue of climate change, there are a mountain of reasons for us to change the way that we live. In fact, there's really only one reason not to change: We simply don't want to. Even if carbon dioxide is not driving the current trend in global average temperature change it is still worthwhile to reduce (and hopefully eliminate) carbon emissions. Likewise, even if oil does not run out as fast as Hubbert's curve would predict there are still many good reasons to conserve petrochemical resources. Think of our industrial farming practices, heavily dependent on petrochemical pesticides, fertilizers, machinery, transportation and refrigeration. Think of the necessity of plastics when it comes to sanitation, food storage and medical needs.
Burning oil in our inefficient automobiles is probably the single stupidest thing that we could do with such a valuable and versatile resource. I don't like paying increasing prices for gasoline any more than anyone else, but perhaps this is what will be needed for the necessary sea change to take place.
Comments (113)
Exactly. People are too lazy to change the status quo. Just one of them pesky facts of life.
But when we're looking at $200 a barrel, things are suddenly looking different. Status quo is no longer sustainable, and people are forced to do something about it. It's a classic case of "things need to get worse before they can get better".
In the long term, skyrocketing oil/gas prices are a good thing. The worst that could happen would be some kind of nationalizing of oil resources, because it would delay the solution while adding exactly zero drops of oil to the existing reserves.
May 16, 2008 6:55 PM | Reply | Permalink
I'm always curious what people mean when they bring up nationalizing oil resources. In the U.S. we simply don't have oil resources to nationalize in any meaningful way. The majority of what is left on the planet is located in the Middle East. The only real way for us to "nationalize" this resource would be to seize it, but I think we can see from current circumstances that this resource will never be put in the hands of the people at large even if it is seized.
May 16, 2008 7:10 PM | Reply | Permalink
Seizing is what I had in mind. It's understood that US domestic oil resources are insufficient, nationalized or not.
The US could, if it really wanted to, invade places like Nigeria or Venezuela. It would cause more problems than it would solve (because it would in fact solve nothing) but that doesn't mean some idiot won't try. It's one of those ideas that look so great on paper. Invade -> control production -> control prices -> profit! Or something like that.
May 16, 2008 7:18 PM | Reply | Permalink
I have heard that the Chavez guy is a dictator. Perhaps we should liberate his oil, er, people in the name of democracy!
May 16, 2008 7:27 PM | Reply | Permalink
Some might argue that some idiot already did try this.
May 16, 2008 7:28 PM | Reply | Permalink
Could be (and if so, it backfired spectacularly). I don't think the reasons for the Iraq invasion are sufficiently understood, and at any rate they were probably quite complex and varied.
With any luck, Iraq will serve as a cautionary tale that invasions with the aim to control oil production do more harm than good even in the short term.
May 16, 2008 7:48 PM | Reply | Permalink
Peak oil production has not been reached in the following nations:
Iraq: 2018
Kuwait: 2013
Saudi Arabia: 2014
May 16, 2008 11:06 PM | Reply | Permalink
Do tell.
May 16, 2008 11:38 PM | Reply | Permalink
Does that mean we should stop worrying and start to love the oil?
May 17, 2008 9:29 AM | Reply | Permalink
There are other consequences of invading as I mention below:
http://tpmcafe.talkingpointsmemo.com/talk/2008/05/over-a-barrel.php#comment-2823334
The fact is that we can't simply take things from (say) Venezuela, because now that would be equivalent to taking things from China.
You might argue that China won't be able to come to this hemisphere and sustain a war with us over those oil fields -- to which I would argue that the Middle East is part of the Asian landmass.
May 17, 2008 1:16 PM | Reply | Permalink
BTW since when are you part of the energy lobby at TPM, DF? You look like you're riding a horse anyway...
May 16, 2008 6:56 PM | Reply | Permalink
IMHO, energy is the most important issue. Everything is about resource.
May 16, 2008 7:11 PM | Reply | Permalink
No disagreement there.
But there is a corollary problem - overpopulation. We need to fix both energy efficiency and overpopulation, because relatively few energy wastrels need just as much energy as zillions of energy efficient people.
You know what the result of overpopulation is in nature. I wonder if homo so-called sapiens can do any better.
May 16, 2008 7:15 PM | Reply | Permalink
Overpopulation, and exponential growth in an even more abstract sense, is of course at the root of energy (and all resource) issues. However, it's quite difficult to tell people that there shouldn't be so many of us.
May 16, 2008 7:28 PM | Reply | Permalink
Well, fossil fuels like oil or coal are going to run out either way, but they do run out a lot faster with exponential population growth.
Overpopulation is where evolution collides with reality. Or, if there is a god, he/she/it is a terrible planner. Humans, like any other successful species, are highly adapted to their environment, they're born survivalists, and what they do is multiply, because (as Nietzsche might say?) that's what life is all about. Humans are just too good at living and the balance is seriously out of whack.
I'm honestly curious to see what happens. I don't believe the Earth is big enough for the current population (6+ billion) with anything approaching Western standards of living. It's going to hurt, the question is how much... Colonizing other planets might be a solution in theory, but in practice I wouldn't hold my breath. Major wars or massive epidemics are a possibility too. Just not very pleasant ones.
It is interesting that in most Western countries, population isn't growing much or at all. In many European countries, there hasn't been significant population growth since the beginning of the 20th century. That shows zero population growth is possible (and all things considered, not that painful), but doesn't show how to achieve it globally.
May 16, 2008 7:45 PM | Reply | Permalink
One theory is that a high general standard of living and stable government are major contributors leading to low population growth. Perhaps we can relate it to the "selfish gene" idea: the poor and oppressed seek to maximize the possibility for passing on their genes by having many children, whereas the relatively wealthy with some freedom of self determination do not need such large families to increase the chances of their gene's survival.
Seen in this light, we could probably avoid radical and morally questionable measures of coercion. Instead, the solution could lie in promoting economic development, fair trade, and egalitarian rule.
May 17, 2008 5:05 AM | Reply | Permalink
Indeed. Population growth is what really bothers me.
It surprises me to no end that so many people (especially those in positions of setting public policy) choose to avoid acknowledging the problem of max-ing out Earth's carrying capacity--it's bearing down on us oh, so rapidly! It shocks me to no end that there can still be so many people who are still skeptical about the various threats to our environment, not limited to climate change. Duh!! Look at population growth rates! One doesn't have to be a f*cking genius to understand that we humans are going to have to change our lifestyles, use resources much more frugally, quit destroying the resources we'll need in the future (air/water pollution, soil erosion, etc.), and--sorry to say it--quit making so many babies.
And the Bush Administration has wasted precious time with its stupid energy policy, foreign policy, regressive environmental policy, and moronic 'abstinence-only' programs.
May 16, 2008 8:31 PM | Reply | Permalink
I've been reading clearthinker's recommendation, Overshoot, and at the same time trying to follow the "evolution" of Malthusian thought. Here is something I have learned in looking at some of this Malthusian and neo-Malthusian history, especially its early critics: we have to be very careful when talking about population control. The best direct reference to this we have is "if they're going to die, then let them do it, and decrease the surplus population!" I didn't know this until recently, but Dickens was taking a direct shot at Malthus, and how his theories had informed (or provided a justification for) less than egalitarian policies in Victorian England.
Population control begins to tread on really dangerous moral territory when you consider that poverty is the arch baby maker. Poverty and ignorance make 10 times the number of babies that Cupid or God make. I think it's important that we stop to consider (I could say here "as good liberals") the feeling we have for the poor, and the great care we bring to issues concerning poverty and racism.
Here is what I'm not saying: population control is immoral. There are wonderful policies that could make our exponential population growth more manageable. And as we are here acknowledging, the exploitation of cheap oil, consequences be damned, is intimately tied to our population explosion, if not outright responsible for it. But I just think we should take a deep breath when discussing population control, especially in light of Malthusian policies of the past-- for example, where it was considered immoral to feed the poor, because they would simply breed more, and create more misery. None of you are advocating this kind of harsh treatment; nevertheless, I thought it might be worthwhile to note.
May 16, 2008 11:44 PM | Reply | Permalink
Are there no prisons? No workhouses?
Dickens took aim at a lot more than an immoral elitist.
May 17, 2008 12:15 AM | Reply | Permalink
Fo sho!
May 17, 2008 12:20 AM | Reply | Permalink
Good job.
It was unnecessarily creepy to get into the discussion about population control without subsequently arguing about the immoral practices you described (eg. targeted birth control, manufactured famines, etc.)
May 17, 2008 1:38 AM | Reply | Permalink
Unfortunately, we (US Americans) tend to see money as the most important issue. But, in a sense, this might be good news for a change, and not only because our own wallets are taking a hit.
I am very impressed with the economic stats of countries who have primarily ended their dependence on oil. See Iceland as one shining example. It went from a deeply indebted mess to one of the top five, just by getting off the juice.
So even for idiots who don't care about ecological issues or sustainability, it would be real helpful to inform folks that this really would be the best thing for the US economy. (All except those pesky oil magnates, but they're getting less and less popular all the time.)
May 17, 2008 7:29 PM | Reply | Permalink
One thing about higher oil prices is that it makes sources that were previously too expensive to use suddenly a good business investment—e.g., shale oil. Peak oil is real and upon us, but I'm not certain we'll be seeing $200/barrel oil for a few years. I believe we're already at a point where the shale oil sources are quite profitable (if twice as environmentally damaging).
Also, there's some evidence of hoarding going on at OPEC, so don't be surprised if there's actually a short-term dip in prices in the near future. It's also possible that the hoarding is purely to drive up prices and maximize profits, of course. There are a lot of different strategies that could come into play, and I won't pretend to be aware of all of them. Maybe they'll cause gas prices to drop back to $2.50/gallon again just so that the ill-informed will think that all is OK and go back to buying their big, gas-guzzling cars.
Anyways, whether it's next year or next decade, I agree we're in for some energy problems, and codegen86 is absolutely correct that the only viable long term strategy involves us getting our population size under control.
May 16, 2008 7:25 PM | Reply | Permalink
Population is a problem, but the U.S. only accounts for about 5% of the world's population and we consume about 25% of the world's oil resources. Population will cause much larger energy problems in China and India (and thereby in the world), but these aren't populations that we have any control of. As far as saving our own sweet asses goes, we need to address our major problem: Excessive consumption and an infrastructure that depends on it.
May 16, 2008 7:32 PM | Reply | Permalink
True, and as far as the US goes, our population is essentially under control anyways (sans immigration, our population would actually be descreasing).
Really, all we need to do is convince the American public to make some sacrifices. Surely they'd be willing to do that once we explain how important it is, right? Right?
May 16, 2008 7:35 PM | Reply | Permalink
Heh. Yeah, that's it.
Seriously though, that was why I brought Gore up. Remember when global warming was still considered to be on the outer-reaches of the scientific mainstream? Even after the evidence became overwhelming it helped tremendously to have someone like Gore who could push the message.
Then again, circumstances may soon become more convincing than the most well-constructed argument any statesman could proffer.
May 16, 2008 7:43 PM | Reply | Permalink
No, it was always within the scientific mainstream. It was the popular press that would hold up "experts" against the climate scientists as a "counterpoint". There is a neat statistic on the OUTFOXED video showing the number of refereed science papers where global warming was questioned (zero, I believe) vs. the mainstream with the "experts".
One of the problems that plagues our society today is that everyone's opinion on issues is "counted" equally. In fact, this lefty-idea, was cleverly coopted by the the right and FNC, to refute anything and everything. In a one-on-one debate, everything looks equal!
This is the reason that representational democracy (e.g. a Republic) is more stable than direct democracy. You have to minimize the impact of the 50% of the population with below-average intelligence. These people deserve respect and empathy as humans, but it doesn't mean they should be weighing in on critical matters. It is the reason why the Founders didn't trust direct democracy -- too often it leads to mob rule.
I am equally concerned about the "best and brightest" arrogance as well. This is typified by the JFK administration who truly got us into a costly war in Vietnam with no real value. However, the US has always been suspicious of education -- witness posters here who cry "elitist" every chance they get. Is it any wonder the US has fallen behind the rest of the world?
May 17, 2008 1:29 PM | Reply | Permalink
Good point about democracy (regardless of flavor). Letting clueless voters decide is clearly not good, except concentrating all power in the hands of a few is even worse.
This is an interesting problem, and one I will freely admit to not know much about. How to organize a society so that it can be governed with taking its long-term interests into account?
On a related note, is it possible to solve problems like energy without an effective world government? Any single country can always improve its own position at the expense of another country... Or in other words, how to ensure that countries cooperate rather than compete?
May 17, 2008 1:43 PM | Reply | Permalink
Oops! See my reply below.
May 17, 2008 1:54 PM | Reply | Permalink
I think very soon we're going to have to take the lead in trying to convince other countries (developing regions in India and Asia, Central and South America, and eventually Africa) to bring their population rates down too. I don't know if that will even be possible.
May 16, 2008 8:37 PM | Reply | Permalink
When I was living in California, I was struck by one thing. Isn't it terribly energy inefficient to build big cities in the south where nearly permanent AC is required for comfort, and even less efficient to build cities in the southwest where there's too much heat and not enough water?
May 17, 2008 9:31 AM | Reply | Permalink
Nowhere in your post or the comments have I seen any mention of the weakness of the US dollar as a contributing factor. The dollar has fallen quite far in the last couple years, as our consumer-credit spending, inflated-equity financed civilian economy collides with the Bush/Iraq economic black hole.
Add to that the uncertainty that comes with much of the world's proven oil reserves sit in a war zone.
Add to that the fact that the US, under Bush, seems to be spoiling for another war, this time with Iran.
And don't forget to factor in China and India's rapid industrialization and motorization.
And yes, the cheap stuff is gone. There's a lot of expensive stuff to be gotten, with enough effort. There are also a lot more people chasing that commodity.
Those of you who advocate higher prices as some sort of cure - think again. You are backing a very regressive strategy, one that hurts a lot of people who have very little choice in their mode of transport, and that sort of callous dismissiveness of those less fortunate is far more the Republicans' territory.
Want to know when oil's going away? When it takes more, in energy equivalence, to get a barrel of oil from the wellhead than is contained in that barrel. Not before.
Rather than simply howling about reducing use, we need to be developing useful alternatives - and fast. That is the sort of thing that only prioritization at a national policy level can do.
May 16, 2008 8:20 PM | Reply | Permalink
Of course the weakness of the dollar plays a factor (something which is clearly addressed in my links). Did you read them? Even in consideration of all of the factors you mention, there's good reason to believe that speculation is driving the price up considerably.
Is it callous to observe that people are unwilling to change without it being mandated by forces beyond their control? You can "howl" about the unfortunate as much as you like, it won't change the realities that either of us has highlighted.
Nature is just callous, I suppose.
You're right about when oil is going away. We're down to little better than a 10:1 exchange rate. This is at least an order of magnitude lower than it was a century ago.
What "useful alternatives" can replace coal and gasoline? Have you examined the numbers required? Do you have any meaningful suggestions along these lines?
May 16, 2008 8:26 PM | Reply | Permalink
I've heard magic unity ponies get good gas mileage. Maybe articleman can loan you his.
May 16, 2008 8:30 PM | Reply | Permalink
Magical unity ponies had better contribute zero carbon emissions.
May 16, 2008 8:35 PM | Reply | Permalink
Oh, they're great with their carbon dioxide emissions. It's the methane you have to watch out for! (You do not want to be behind one of those ponies when they emit their emissions.)
May 16, 2008 8:39 PM | Reply | Permalink
Even non-magical non-unity ponies and horses get excellent gas mileage. They can go for miles and miles without consuming a single drop of gas!
May 17, 2008 9:50 AM | Reply | Permalink
Higher prices for gas that encourage conservation can be offset with per person deductions to help alleviate the pain. This should address any regressive concerns. The important point is that those deductions should not be tied to actual fuel consumption (unless there's an extra reward for reducing said consumption, such as for getting a more fuel-efficient vehicle, using public transit, or smart repairs to an existing vehicle that would improve its gas mileage), as one of the goals of this policy would be to have people start looking at the energy efficiency choices they make in their day-to-day lives.
The important thing is that we can (and should) raise fuel taxes without making it regressive.
May 16, 2008 8:29 PM | Reply | Permalink
As we've noted in these posts before, the weakness of the dollar is related to this problem in a very complex way-- one that seems to turn cause and effect on its head. You mention the causes of dollar weakness as: "consumer-credit spending, inflated-equity financed civilian economy... the Bush/Iraq economic black hole." But, in my opinion, you're missing the key term: petrodollar. Oil is a much more special than simply a commodity to be bought and sold-- it is the dollar. Meditate on that tautology for a minute, and go blind in the Zen wonder that is our global financial system. Have you returned from your samadhi? Good-- now come back among the people, as a Bodhisattva, and share in our Bretton Woods/House of Saud/Lockheed Martin-esque despair.
May 17, 2008 12:02 AM | Reply | Permalink
May 17, 2008 12:03 AM | Reply | Permalink
A scam?
Say it isn't so!!
May 17, 2008 12:17 AM | Reply | Permalink
Ven ikh bin Rothschild...
May 17, 2008 12:24 AM | Reply | Permalink
No one advocates rising gas prices as a cure. It is simply a prerequisite for even seriously looking for a cure.
In other words, as long as gas is cheap, people will go on wasting oil. Gas prices need to hurt before folks will start looking for a solution.
It's like a chronic illness, annoying but not immediately life threatening. The patient will do nothing about it until it starts really hurting.
So yeah, I am cheering higher gas prices, not because I like them (I don't) but because that's the least destructive way to bring about a change.
May 17, 2008 9:27 AM | Reply | Permalink
Recycle, shop wisely, walk more. Recycle, go solar, recycle, carpool, take public transportation, walk more, make less babies if any at all, recycle, and go solar. Be cognizant, be aware, stay informed. Donate to and buy the stock of companies that sell wind-powered and solar-powered energy. Donate to schools that will teach kids about nuclear energy and how to do it right and use it wisely. D'oh!! Recycle, shop wisely, walk more. Less sex, or if you need sex, use protection, pay attention to your wallet and what's in it and what isn't. If a Trojan is in it, that's good. If no money, no Trojan -- no sex. Recycle, shop wisely, walk more. Go solar. Be aware. Stay informed.
May 16, 2008 9:09 PM | Reply | Permalink
Loved that!
Basically saying the same thing as the poster The Old Grouch, time to take action instead of rehashing the same old arguments.
May 16, 2008 10:17 PM | Reply | Permalink
Thank you. Kudos to DF (as usual) for inspiring me to write it.
May 16, 2008 10:39 PM | Reply | Permalink
On the contrary - more sex! Because that means less shopping, less driving around, less watching TV, less wasting energy. But yeah, Trojans and pills are required.
Cultural reference note: Most non-Americans have no clue what "a Trojan" is. They would most likely guess a Trojan horse. Obviously this is not a concern on a board like TPM.
May 17, 2008 9:43 AM | Reply | Permalink
The sad thing is that so much more could have been done to address our oil dependency after the first energy crisis in the 1970s. Bu instead of curbing our energy use and developing better public transportation, etc., suburban sprawl has been allowed to grow without limits and SUVs have been marketed aggressively to the very people who drive the most. Our society seems to be addicted to gluttony and I'm not sure there is a 12-step program to treat it yet.
May 17, 2008 12:24 AM | Reply | Permalink
Call me a cynical curmudgeon, but I think people will respond in an aggressive way to one thing and one thing only--money. When wind and solar are cheaper than oil, we'll use wind and solar. When they pay us or force us to recycle, we'll recycle. When we can't afford gas, we'll finally put real money into researching energy alternatives.
Of course, many people will recycle even if you charged them (my mother has been known to cart cans across the country in search of recycling bins), but not enough to make a difference.
So I say, let the growth of oil production slow and the prices rise (gradually, so that world economies can adjust and the working poor, who bear the brunt of the price increases, don't get completely fucked). It's the only way to get us off oil and save the world from global warning.
May 17, 2008 1:07 AM | Reply | Permalink
But wouldn't you agree that the true cost of oil is, and perhaps always has been, hidden? We can think of global warming as a cost... a multi-trillion dollar cost. But it's not reflected at the gas pump... why? (Hint: power and wealth). There are other, incalculably greater, costs besides those of global warming. What will force the powerful to remove the veil from the true price? If you answer "the market," I would say-- they are the market. Hopefully peak oil will force their hands, before time runs out to make major changes sans catastrophe. Hopefully.
May 17, 2008 2:14 AM | Reply | Permalink
If it's not converted to dollars and cents, it doesn't matter. When alternatives literally cost less than oil, corporations and investors will pour money into them (as they have already started to do to an extent because of the current price increases). Until then, all we've got are government grants and scattered enthusiasts with solar panels on their houses.
May 17, 2008 1:11 PM | Reply | Permalink
There is evidence to back this statement up (the "what people will respond to" part), so you are not a cynical curmudgeon -- at least not because of this statement.
In fact, letting the price float naturally will probably cause the least amount of pain. There will be some chaos, but that's because the US citizens, starting in the 80s, gleefully abandoned the more austere energy measures because of the glut created by the Alaska Pipeline and the North Sea strikes.
May 17, 2008 5:56 AM | Reply | Permalink
Skyrocketing oil costs could wreak havoc on the pocketbooks of people who spend a high percentage of their income on transportation and food, and it could lead to stagflation in the wider economy. The price should be allowed to rise but gently, gently.
May 17, 2008 1:28 PM | Reply | Permalink
This is true. There is no way to control it, however. We had a chance when pricing was set by the US (pre-1972). Then we had a deal with the Saudis set up (in 1974) because they were the "swing producer" and we gave them "protection" if they would sell the oil in dollars. (We had just taken ourselves off the gold standard and to stabilize the dollar we put ourselves on the "oil standard".)
Now, the Saudis can't play swing producer (we are past peak). Therefore, who controls the price?
The speculators.
Therefore it's out of the US's control.
As soon as we wrap our heads around this fact, we can begin making progress. The rest is simply ineffective empathy.
May 17, 2008 2:20 PM | Reply | Permalink
I guess "cynical curmudgeon" is the same thing as "realist".
Lbp makes a good point that a significant part of the price of oil is hidden (ie. not reflected in the price of oil/gas). Although I don't believe it's all a conspiracy - the free market is notoriously bad at dealing with externalities.
May 17, 2008 9:47 AM | Reply | Permalink
Hey, thanks for the speculators link.
May 17, 2008 2:03 AM | Reply | Permalink
"Burning oil in our inefficient automobiles is probably the single stupidest thing that we could do..." Plus, as everyone knows, men who drive large automobiles are usually compensating for the size of something else.
May 17, 2008 4:08 AM | Reply | Permalink
Having been invoked so many times in such a short blog (many thanks for carrying the ball forward DF) compels me to weigh in with a few observations:
a) JetBlue has recently announced it is giving up plans to put a terminal at Los Angeles Airport because of fuel prices. As the frog that slowly cooks to death in water when the heat is gently raised, consider this is sign.
b) If you go with William Catton's reasonable theory that technology is what constantly expands the carrying-potential of the earth, and we remove oil from the equation, we will need a world population equivalent to -- say, very conservatively -- 1900.
Present world population is about 6.6B, and in 1900, the population was 1.65B.
This means that we will have to remove about 75% of the humans from the planet to have a sustainable lifestyle without oil.
That number should be upsetting -- but it is a fact. Population control will no longer be an item to be discussed -- it will be forced upon us via starvation and disease most likely. Perhaps some brought on by global warming issues (including the halt of the thermohaline circulation that keeps Europe warm).
c) China has been most effective in re-aligning a post-peak oil world. They have already cut off-market deals. The US Companies only have access to about 20% of the remaining world's oil reserves. China is a real enemy of the US looking forward. When they have built up their industry to a point to raise their country's markets, they won't need our markets anymore and they will dump the US dollars they hold in their foreign currency reserves.
d) A key concept: Energy Returns on Energy Invested hasn't been brought up here yet. In 1900, you'd get about 100x the number of barrels of oil out of the ground as you put into it. Today that number is closer to 10x... the closer it reaches 1, the less incentive you have for producing (say) shale oil using the remaing oil reserves.
e) The airplane requires the highest grade oil. You aren't going to run airplanes on wind and solar. Photovoltaics are still not a decent source of energy. The only promising solar technology thus far is heating water.
For those who insist on pointing out a news story here or there or some professor doing research in his or her lab, all I have to say is the old joke about fusion: It's the energy of the future -- and has been for the past 50 years.
f) For the umpteenth time, I suggest reading this article:
http://www.gatsby.ucl.ac.uk/~pel/environment/energy_pt04.html
g) I have brought up petrodollars in the past. Again, I highly recommend BAD MONEY by Kevin Phillips. If you think the dollar is weak at present, just wait until oil is no longer traded exclusively in it. Already some nations (Venezuela and Russia) are trading in Euros and Yen. Iraq was doing under the table non-dollars in the early 2000's and is one of the reasons the US invaded.
h) Gas prices will have to float. It's the only way to reduce consumption. People at the low end of the scale will be hurt. And here is the kicker: nothing can be done about it. See also: 75% of the world's population will be vanishing to get us back to the carrying-potential of the Earth before it was run on oil.
For those who claim this is against the liberal agenda, I point out that Nixon put us on capped prices in the 70's and Carter was the one who let the price float -- and created reduced consumption. (Reagan dismantled the Carter energy policy and neither Bush I, Clinton, nor Bush II, put things back in order. Energy is not a partisan issue. It's the true 3rd rail in the US.)
i) Oil provides the basic inputs for the green revolution in agriculture. We will have to go back to older -- and less yielding -- methods. See also: 75% of the world's population will be vanishing to get us back to the carrying-potential of the Earth before it was run on oil.
j) Ever wonder why we take oil from the evil Hugo Chavez? Ever wonder why he sells it to the evil Americans? It's because the Venezuelan oil is heavy and sour -- and the US has the special refineries to handle it. China is presently trying to duplicate those facilities.
k) Energy is one of the single most important issues facing the United States. This is why stupid comments on Rev. Wright, "pimping Chelsea", "Curious George t-shirts", Hagee, "a woman candidate", "who said what about commander in chief" and the like are simply bread and circuses for the masses. With energy, you have to be well versed in (a) geology, (b) science, particularly physics (c) engineering and (d) economics. And that doesn't even include geo-politics and sociodynamics.
So it's easy to talk about the non-issues that people here like to discuss. Even the notion of "Universal Health Care" pales in comparison.
l) Those "ignorant" people in W VA may well be better prepared to deal with post-peak oil than those who post here. Many in W VA know how to survive at least via hunting. I have been told by Venture Capital firms on Sand Hill Road that "agriculture, as an investment, isn't sexy". Note the quotes.
I merely commented that I didn't suppose he considered having food to eat was sexy as well.
Most of us have no survival skills in growing foods, preparing foods, and storing foods. See also: 75% of the world's population will be vanishing to get us back to the carrying-potential of the Earth before it was run on oil.
So much more to write, but I think this is enough for now.
Thanks again, DF, for continuing to bring up *the* most important topic of this election year. It *will* be the most critical issue facing the POTUS from 2009 and beyond.
May 17, 2008 5:28 AM | Reply | Permalink
Your point k) is kind of worrying - making it clear that politicians and the media are about the least qualified people to even talk about energy issues.
May 17, 2008 9:57 AM | Reply | Permalink
A few comments re f):
Energy doesn't get "used". It gets transformed. For the most part, energy gets neither lost nor created. But there is a low to high entropy progression.
Fossil fuels are NOT a source of energy somehow distinct from solar power. Fossil fuels store solar energy that accumulated over hundreds of millions of years (and that we're on track to deplete within a few hundred years). In easy to understand terms, it's a bit like inheriting a planet-sized fortune and blowing it all on coke and hookers.
Economists are idiots who have no clue about fundamental laws of physics (and yes, I studied economics).
Growth-based economics is a pyramid scheme.
The Solar system, and the Universe, is a tad bigger than Earth alone.
Research (technological or otherwise) is one of the trickiest and least predictable human endeavors. You never know what you'll get and you won't know until you try.
It's extremely easy to get lost in minutiae and incredibly difficult to get a global view of things (saying this as a person who lacks such a view).
May 17, 2008 10:30 AM | Reply | Permalink
It most certainly does get "used". Transforming it to heat uses it (1st law of thermodynamics).
Energy can certainly be lost and created. E=mc2 and all (matter-energy equivalence).
Fossil fuels are concentrated, liquid sunshine to be sure. But they are also chains of hydrocarbons and therefore represent "stuff" that can be used in the ag and pharma industries as DF pointed out in his original blog.
You can't make this "stuff" out of sunshine directly.
A common argument and totally specious. It's at the level of "you can't win the lottery unless you play."
A good example -- even energy related -- is fusion. Totally understood. Observable all the time (it's how stars shine). And yet we can't fashion it into a practical source of energy, and we've been trying for 50 years.
Once people recognize that things are going to have to dramatically change, we can use research/technology to try to make things a little more pleasant. But standard farming represents 10K years of technological know-how. And look how most of that knowledge has been lost.
May 17, 2008 12:31 PM | Reply | Permalink
Heat is still energy. The first law of thermodynamics states that the total energy of a closed system (the Universe) remains constant.
Yes, E=mc^2, but is that really relevant? How much energy are we getting by directly breaking down matter, and how much matter are we building out of energy?
I don't know why you took my note about research as an argument. What exactly are you disagreeing with? I never say that research always brings results, just that without spending R&D dollars you definitely won't get results.
And in a lottery, someone always wins - the one organizing it. Which makes it a bad analogy.
May 17, 2008 1:20 PM | Reply | Permalink
Careful, codegen86. If you want to play semantic games, then we need to clarify your original statement. Physicists do not call heat "energy". The first law talks about "work" and "heat". "Work" is useful energy. "Heat" is not. But both require modifiers if you are going to split hairs. The energy in this blog is implicitly "work". Now you can try to get people precise with their words, but hopefully that makes the discussion clearer, not more muddy. Until your comment, everyone here used "energy" as "useful energy" or "work".
If you want to use the Universe as your closed system, be my guest. There is little energy we are capturing via the background radiation and the starlight we see (except the very important star of the sun). This, however, merely gets us off track from the topic at hand.
First, it is relevant simply because you are already splitting hairs on the term "energy". If you want to use scientific arguments, you better be prepared to take it all the way. You were casually throwing around terms and such, and you made a boo-boo. Admit the error, and let's move on.
As far as E=mc2 being relevant: of course it is. HOw much energy are we getting via that? Well, if you live in CT, then you are getting about 50% of your electical power from it.
It's called nuclear reactors.
What are you proposing research in? What would you fund? Because I do not know of any magic solution to create enough energy to sustain our current lifestyle -- and I know of no researchers who are working on such a source. Do you?
No, the analogy is fine. The winners in the R&D drive you propose are the researchers who get paid regardless of outcome. The analogy is better than you think.
May 17, 2008 2:09 PM | Reply | Permalink
You know, I wonder why people (and this is not directed at you) can't agree on what words mean and stick with it. It would make things so much simpler.
For me it's confusing when you talk about "energy" but clearly don't use it the same way it's used in physics.
Physicist do and don't call heat "energy". I recommend http://en.wikipedia.org/wiki/Heat to your attention, especially the first sentence. It is true that heat and energy are distinct terms with specific meanings, but heat is a form of energy. I guess it all depends on what the meaning of "is" is.
I admit that E=mc^2 is relevant due to nuclear energy. But I will still argue that it's not really all that important because we can't run the world on nuclear energy.
I'm not "proposing" any research. You're reading more into my words than I actually wrote. I can sorta understand why, but that doesn't make it right.
BTW are you suggesting that all research should be stopped because the only winners are the research scientists? Do you really think research is useless? Probably not...
May 17, 2008 3:08 PM | Reply | Permalink
codegen: I'm curious, what is your formal educational background (and this isn't meant as a poke at you, in the least). I'm asking because I sense that as a scientific layman, you are far better educated than most.
I'm asking for the specifics, of course, to really show the problems of saying "let's throw some money at the problem."
Ah! Now you are reading things that I haven't written! ;-)
I have been involved in academic research for years with sources from agencies like: DoD, NSF, DARPA, DOE, DHS, NASA, USDA, and NIH. So I don't think research is useless.
However, once upon a time, there was more responsibility of using these funds for the social good. And, once upon a time, proposals were also evaluated on true merit.
The "once upon a time" dates from about 1945 to 1980 or so.
However, sometime in the 70's several things happened: Academia recognized that government funding allowed them to run their universities in part by federal government dollars. There was an "affirmative action-like" bias towards doling out the dollars. (E.g. you couldn't put all the money into UCLA, Berkeley, Stanford, Caltech, Harvard, MIT, Purdue, etc. You needed to help the smaller schools). And you needed to justify these funding decisions via committee, suggesting only the most bland and obvious results.
And lastly, the universities themselves have given up the responsibility of socially productive research. In part because designing the next hologram t-shirt is a better news story (and brings out more alumni donations) than a new past resistant tomato. See my comment above about "agriculture isn't sexy".
So, the upshot of research today is for faculty members to support themselves and little else.
There are two disturbing trends in this country. One has been taken to completion: the disappearance of the industrial lab -- run on the profits made by the company. Ford, IBM, AT&T, Xerox, GE, Chevron etc. all used to attract world class researchers, many smarter and more accomplished than faculty members, and poured dollars in to get products out. (Let's not sidetrack on the woeful tale of Xerox PARC... for the most part these internal thinktanks did contribute to the bottom line.) The companies weren't being altruistic, they were working to help their own bottom line -- a nice example of capitalism helping the common good through appropriate motivation (e.g. more profits!)
Now, with their disappearance, we are relying on an industrialization of the university labs. Except, this subverts the purpose of the university: to educate. It also creates a crisis of who owns the intellectual property that the university created with public funds. (Answer: it has been decided that the university owns the IP, but the government has license-free rights to it.)
The other part of this equation is that larger companies now buy up successful up-and-coming smaller ones as their "think tanks". This is how Microsoft, for example, keeps current. They aren't the only example, however.
So the socio-dynamics of pouring money into R&D is far more complex than most people want to admit.
Moreover, much of the R&D (sequestering emissions, for example) was already done in the 1970s. The problem isn't the R&D, it's the method it make it practical and economical. This doesn't necessarily involve scientists and most certainly doesn't involve universities because they aren't geared for commercialization of intellectual properties.
May 17, 2008 3:47 PM | Reply | Permalink
My educational background, let's see... two or so years of kindergarten. Eight years of primary school. Nothing interesting there except I started learning English in fifth grade. Four years of high school which, from all I heard about them, was nothing like a US high school. That's where I got decent basic science education. I liked physics but hated math (weird, I know). Then five years of university where I learned mostly about computers but also a decent amount of economics theory.
I'm not a scientist, I'm a programmer. I work on commercial software but a lot of what I do is research. When I start out on a project, I don't know how to reach the goal. Sometimes it turns out to be unreachable (within given constraints at least). Progress tends to come in discrete steps and spending time on a problem does not mean it will be solved. It's a never-ending learning process.
Did that explain anything? :)
Thanks for the bird's eye view of research in the US in the recent decades. Would you say that it nowadays takes longer from making a discovery and making money off of it? Because that would explain why funding R&D is such a problem.
May 17, 2008 4:23 PM | Reply | Permalink
Mostly why you know a bit more than the average layperson.
I do applaud your command of written English. I know I couldn't communicate with you in your native tongue.
May 17, 2008 8:29 PM | Reply | Permalink
ClearThinker, you recognize that there's good R&D happening outside of universities, yes?
May 17, 2008 8:19 PM | Reply | Permalink
Are you referring to government labs? Or small companies? Or large companies? or....?
May 17, 2008 8:27 PM | Reply | Permalink
Private contractors - not affiliated with universities.
I'm a "beltway bandit", work for such a company here in DC, we do lots and lots of Federal contract work - many of our contracts, we've kept for decades, many we share with other companies - large and small. Lots of networking that goes on here. People from universities do get involved in the work, typically as consultants, and work on the advisory boards, but I'm finding that the big money (at least in the field that I'm in) is tending to go to private firms.
May 17, 2008 8:36 PM | Reply | Permalink
I've dealt with your colleagues in many capacities.
There's a reason you are called "beltway bandits"!
That's a system that exists only to feed itself. Sorry. It's precisely what Eisenhower warned about.
Now, can I get on the consultant gravy train? ;-)
May 17, 2008 9:26 PM | Reply | Permalink
Yes, indeed. It's a system that has many flaws, but it's also productive in many ways. And, as you point out, the flow of research dollars through the university system has not been as productive as one would hope.
The partnership of university experts, government agencies, nonprofit advocacy groups, and private contractors is something that I am finding is very fruitful for shaping public policy. It can seem frustatingly slow for those who want to see their favored positions taken up sooner rather than later, but...things just don't work that way.
And yes - there's always opportunity for good thinkers on these advisory groups. It's usually just a matter of working into the networks - typically by attending and presenting at the right national and regional conferences and then working contacts from there.
You know, being a "consultant" is the new retirement.
May 17, 2008 9:44 PM | Reply | Permalink
Some additional comments on "swing producers"
http://tpmcafe.talkingpointsmemo.com/2008/05/14/speculation_oil_prices/#comment-2816592
May 17, 2008 5:30 AM | Reply | Permalink
A few more thoughts previously published, including the "clearthinke