Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why Peak Oil Will Never Lead To $500/bbl Crude Oil

chrismartenson.com

Post reply on HN
Print view View original

61–70 of 72 posts

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#61

Post by ars »

jbooth wrote: post #55
SanPedroGrouch wrote: post #34

Earlier quoted context omitted.

government intervention is of course a euphemism for rationing. Rationing creates shortages which in turn causes steeper rationing, with the result being the economy slows to whatever pace is consistent with the limited supply of energy. For the USA that looks to be a lonnnng way down from here.

A combination of subsidies and taxes could align incentives well in advance without resorting to outright rationing.

You can tax oil, if we are short of oil. But if we are sort of energy in general, then taxes won't work.

Energy is the input to every single thing humans do. If you tax energy then the price of _everything_ will go up.

You can't build a wind turbine without energy. If wind turbines produce less energy than it takes to make them, you are stuck.

As it turns out wind turbines produce more, but not a lot more. Solar cells produce less.

Even nuclear power just barely produces more than the energy used to build the plant (at least in the first 10-20 years).

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#62

Post by ars »

motters wrote: post #41

I wouldn't be so confident about naming a particular ceiling price, but as oil becomes more expensive demand will fall and individuals and industries will move to other sources of energy. In particular within the next 5-10 years it looks as if electric vehicles are going to be a growth area, mainly driven by rising costs on conventional fuel.

Electricity is not a "source of energy". If the price of oil goes up the price of electricity goes up too.

There are no other sources of energy that are really practical today. Although some are close.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#63

Post by nostrademons »

RyanMcGreal wrote: post #39
nostrademons wrote: post #30

Earlier quoted context omitted.

We'd switch to more mundane substitutes long before oil got to $500/bbl. Just the spike to $130/bbl in 2006 saw people switching away from SUVs to Priuses in droves. If that were sustained for any length of time, everyone would be driving a plug-in hybrid to work. The technology exists today, and the production capacity would ramp up pretty quickly. If every switched from a 20mpg car to a 50mpg car where the first 10…

That might work if the developed world was driving the increase in fuel consumption, but that hasn't been true for quite some time. North American oil consumption is already going into decline, but global demand pressure is coming from the developing world - China, mainly, followed by India - as well as all the oil-producing countries with nationalized industries and artificially low domestic prices (Venezuela, most…

They have the same price constraints that the developed world does. If oil goes up to $500/bbl, we'll see one of three things happen.

1.) They'll substitute more efficient yet more expensive cars for gas guzzlers, as the TCO of a gas guzzler goes up.

2.) Efficient, cheap, yet small cars will start being developed for emerging markets. (This is already happening a bit - consumers in Beijing tend to drive much smaller cars than consumers in Houston.)

3.) They won't buy cars at all.

There's no innate reason beyond price why consumers in developing companies can't buy plug-in hybrids. And if price is the governing factor, they simply won't buy cars as well. Either way, it puts downward pressure on oil demand and hence serves to limit prices.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#64

Post by motters »

ars wrote: post #62
motters wrote: post #41

I wouldn't be so confident about naming a particular ceiling price, but as oil becomes more expensive demand will fall and individuals and industries will move to other sources of energy. In particular within the next 5-10 years it looks as if electric vehicles are going to be a growth area, mainly driven by rising costs on conventional fuel.

Electricity is not a "source of energy". If the price of oil goes up the price of electricity goes up too. There are no other sources of energy that are really practical today. Although some are close.

The price of electrons is not necessarily linked to oil production, since electrons can be produced in ways which don't require much or any oil.

There are other eminently practical energy sources available. The main issue is that these have historically not been price competitive with oil. As oil extraction becomes more difficult the economics of energy will change.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#65

Post by jbooth »

ars wrote: post #61
jbooth wrote: post #55

Earlier quoted context omitted.

A combination of subsidies and taxes could align incentives well in advance without resorting to outright rationing.

You can tax oil, if we are short of oil. But if we are sort of energy in general, then taxes won't work. Energy is the input to every single thing humans do. If you tax energy then the price of _everything_ will go up. You can't build a wind turbine without energy. If wind turbines produce less energy than it takes to make them, you are stuck. As it turns out wind turbines produce more, but not a lot more. Solar cell…

Tax oil, subsidize renewables and nuclear construction (but not operation). That'll do a lot towards building in the incentives that are currently being lost to free-rider and tragedy-of-the-commons.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#66

Post by ars »

motters wrote: post #64
ars wrote: post #62

Earlier quoted context omitted.

Electricity is not a "source of energy". If the price of oil goes up the price of electricity goes up too. There are no other sources of energy that are really practical today. Although some are close.

The price of electrons is not necessarily linked to oil production, since electrons can be produced in ways which don't require much or any oil. There are other eminently practical energy sources available. The main issue is that these have historically not been price competitive with oil. As oil extraction becomes more difficult the economics of energy will change.

I don't think you realize how interconnected, and interchangeable all forms of energy are. Not being price competitive with oil means it costs more energy to make then it produces.

If something made more energy than it costs to make it (over 10 to 20 years), then it would be built. Why not build it? It's guaranteed profit.

But, in actuality there isn't anything like that. Every single form of energy is being tapped to the maximum possible. It's the nature of capitalism.

If the price of oil went up, the price of everything goes up. If the price of raw materials goes up, it costs more to build some alternate form of energy, so you get nowhere.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#67

Post by ars »

jbooth wrote: post #65
ars wrote: post #61

Earlier quoted context omitted.

You can tax oil, if we are short of oil. But if we are sort of energy in general, then taxes won't work. Energy is the input to every single thing humans do. If you tax energy then the price of _everything_ will go up. You can't build a wind turbine without energy. If wind turbines produce less energy than it takes to make them, you are stuck. As it turns out wind turbines produce more, but not a lot more. Solar cell…

Tax oil, subsidize renewables and nuclear construction (but not operation). That'll do a lot towards building in the incentives that are currently being lost to free-rider and tragedy-of-the-commons.

You didn't understand what I said.

Renewable and nuclear power today, consume more energy in the making of them, then they produce (over 10 to 20 years).

Subsidizing them won't help - there isn't enough energy available.

If you take the long view, more then 20 years, the picture changes, but few renewables last that long. Only nuclear does.

But since no bank wants to loan money with a payout of longer than 20 years, nuclear doesn't get built. That's why they talk about loan guarantees for nuclear power.

There is no free-rider or tragedy-of-the-commons going on here.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#68

Post by patrickk »

cookingrobot wrote: post #57
patrickk wrote: post #54

“The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil.” Sheikh Yamani, Saudi Oil Minister, 1962-1986

That's poetic - but is it true?

We've been here before, too, except before it was food shortages and 100s of millions dying that were being predicted in alarmist tones:

http://en.wikipedia.org/wiki/The_Population_Bomb

And the solution, which apparently now sustains one third of the world's population:

http://en.wikipedia.org/wiki/Haber_process

My prediction, is that like before, science will solve the problem and this will all disappear into the memory. Man's capacity to wipe itself out is far outpaced by it's ingenuity to sustain itself.

Then: Cold War, oil shocks

Now: Terrorism, oil shocks

History always repeats itself.

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#69

Post by thaumaturgy »

ars wrote: post #67
jbooth wrote: post #65

Earlier quoted context omitted.

Tax oil, subsidize renewables and nuclear construction (but not operation). That'll do a lot towards building in the incentives that are currently being lost to free-rider and tragedy-of-the-commons.

You didn't understand what I said. Renewable and nuclear power today, consume more energy in the making of them, then they produce (over 10 to 20 years). Subsidizing them won't help - there isn't enough energy available. If you take the long view, more then 20 years, the picture changes, but few renewables last that long. Only nuclear does. But since no bank wants to loan money with a payout of longer than 20 years,…

> Renewable and nuclear power today, consume more energy in the making of them, then they produce (over 10 to 20 years).

I don't think that's true. [1]

> But since no bank wants to loan money with a payout of longer than 20 years, nuclear doesn't get built.

That's an oversimplification. There are numerous reasons why nuclear isn't being built, not the least of which are the various NIMBY and other environmental concerns, and the fact that things like Thorium reactors have yet to regain popularity due to the push for weapons-grade-yielding nuclear technology over the last several decades.

[1]: http://www.eoearth.org/article/Energy_return_on_investment_%...

Re: Why Peak Oil Will Never Lead To $500/bbl Crude Oil

#70

Post by motters »

ars wrote: post #66
motters wrote: post #64

Earlier quoted context omitted.

The price of electrons is not necessarily linked to oil production, since electrons can be produced in ways which don't require much or any oil. There are other eminently practical energy sources available. The main issue is that these have historically not been price competitive with oil. As oil extraction becomes more difficult the economics of energy will change.

I don't think you realize how interconnected, and interchangeable all forms of energy are. Not being price competitive with oil means it costs more energy to make then it produces. If something made more energy than it costs to make it (over 10 to 20 years), then it would be built. Why not build it? It's guaranteed profit. But, in actuality there isn't anything like that. Every single form of energy is being tapped t…

The idea that capitalism is either a natural or optimal system doesn't stand up to much serious scrutiny. If you're referring to "cost" in terms of energy cost then yes there is always some amount of energy which needs to be put in to get energy out, with the result being the net energy gain.

For other forms of energy, such as bio-fuels, the net energy gain is presently smaller but this does not invalidate these technologies. As the complexity of extracting oil increases its net energy gain will reach parity with other energy sources, and then begin to lag behind them. The economy - with all its foibles - will eventually back the winners out of pure necessity.

Post reply on HN