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

chrismartenson.com

71–72 of 72 posts

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

#71
post #32

Earlier quoted context omitted.

But the electricity powering the Internet is also somewhat oil-based, depending on exactly what fuels you local plant runs. It may not impact the individual homeowner, but the costs of the data centers and network providers will increase alongside oil prices.

Very little electricity is petroleum based anymore. Depending on region it's mostly coal, hydro, or nuke.

It depends entirely on pricing. Most "coal" plants switch between coal and natural gas based on current market trends. And even if coal is burned, the fuel to get the coal to the plant is petroleum-based. There are a lot of complexities involved. Of course, working in the natural gas industry, I only have limited knowledge. :)

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

#72
post #8

Earlier quoted context omitted.

> Market demand for oil collapses (read: recession) long before it gets anywhere close to $500/bbl. Above $80 a barrel, alternative fuels (such as liquid fuels from coal) becomes profitable. I sincerely expect that this will expand extremely rapidly in the next 15 years.

When demand becomes tight, the price driver is not so much the cost to produce as it is the rate of production . Can we produce five or ten million barrels of oil-from-coal a day? Can we replace a two or three percent annual drop in oil production rates through some combination of conserving and replacement without recessionary demand destruction? I'm not so sure.

> the price driver is not so much the cost to produce as it is the rate of production.

Yes, it will require a rapid expansion of CTL plants and demand will drop.

It would probably mirror the expansion of South African CTL plants after numerous oil boycotts.

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