34 comments by 1 or more people

1. I think you underestimate human civilisation's ability to survive.

   15 Apr 2006, 23:06

2. I used to think this way. But then I learned a lot more about chemistry, economics and the energy market and I realized that civilization is not going to collapse as the price of oil rises. We have technologies now which could replace oil in most of the key markets, but they are more expensive than digging it up. But the way that the thing works is that as oil becomes more expensive, it becomes economically viable to move to a hydrogen economy for most transportation power. Oil from plant sources will be more valuable for fine chemicals rather than transportation. Also increased energy prices make it more viable to extract oil from harder-to-reach places, for those applications where there's no alternative.

   We're going to be getting our energy from a mix of solar, wind and tidal power. (solar panels are only 20% efficient, but do the math and work out just how little surface actually needs to be covered with them to supply all our energy requirements). None of the renewable energy sources is sufficient on it's own, but together it's plenty.

   You are quite right that our current way of doing business is living on borrowed time. And climate change is something that is going to have to be dealt with. But oil isn't going to go away overnight. It's going to be gradual increase in cost.

   15 Apr 2006, 23:16

3. I think the economy is far more fragile than you realise with respect to oil. As you say there are technologies that can replace oil, but they themselves are not sustainable at the quantities that would be required and the price would be extremely high. These technologies have limits. I assume in your math for solar panels you include all the energy that would be required to make enough hydrogen to replace oil, theoretically if you cover a massive amount of land in solar panels you could do it, at least 10% of the planets land surface. I have done the maths before and it doesn't look good. We could not cover agricultural land as that will be needed, so deserts are the only option. Could we really wipe out every desert country and cover them completely with solar panels, if you believe this then I think you live in the land of fairys. Also, what would be the effects of this on the climate, would it not alter the properties of deserts and hence the global climate balance. Okay, your right about not just using solar, but other things have similar issues. Hydrogen economy, are you joking, do you realise how difficult that is. We have yet to solve that problem, but even when we do (At least 10 years) how are we going to rebuild the infrastructure quick enough to handle hydrogen and replace all cars, lorries, tractors and planes. Where does all the hydrogen come from?

   It requires energy (and lots of it) to build all these things so if we wait until after peak (as we are) the cost of building them increases as oil increases in price. Therefore, before it becomes viable the economy will struggle and collapse and there will be no means to implement these ideas, but we will try, just too late. Supply and demand economics just does not work for this fundamental commodity, we need cheap energy not expensive energy for the system to work. And cheap does not just mean price, it also means rate of return (ie. energy out / energy in). Again, it is the classic over expectation of technology which probably comes from too many sci-fi films. There are limits on what we can do.

   You do not suggest an answer to the population and resource problem, how are we going to produce enough food and find enough water when we already have ground-water problems and decreasing soil quality. The cost of international shipping and farming will go up, so food gets more expensive. Most people would struggle to pay. There are also signs that other resources are running out, copper for example. This planet can only sustain 2 billion people at most, what are we going to do?

   "Underestimate human civilisations ability to survive", tell that to all previous civilisations that have collapsed. Collapse is the norm, it is inevitable. Why are we different, the bigger we are the hard we will fall, this will be a global collapse. If your answer is that we have better technology then you would be suffering the the classic problem of over exagerating our abilities. I know about technology, I studied computer science and physics and have looked at the bigger picture, we have problems. It seems it is exactly this view that is causing the government to do nothing, they are hoping the market will solve the problem. Lets wait and see.

   16 Apr 2006, 08:09

4. You're funny. Making numbers up that you think might be right really doesn't cut it.

   As you say there are technologies that can replace oil, but they themselves are not sustainable at the quantities that would be required and the price would be extremely high.

   The technologies which replace oil are all powered by the sun, in the end. The price is high, but the price of oil will rise gradually, not suddenly. It's shocks that usually lead to economic instability and collapse.

   We could not cover agricultural land [with solar cells] as that will be needed, so deserts are the only option.

   Uuum if you put a photovoltaic cell on the roof of every house, you can typically provide 75% of that house's electricity consumption (if the building is modern and designed to be efficient), although obviously this depends on location and season. It requires a shift in thinking, not "let's build over africa!" mentality.

   I have done the maths before and it doesn't look good.

   Evidently not very well. What measure for average surface solar flux did you use?

   Solar is only one part of a balanced, clean energy supply, so don't get too hung up on it.

   Hydrogen economy, are you joking, do you realise how difficult that is. We have yet to solve that problem, but even when we do (At least 10 years) how are we going to rebuild the infrastructure quick enough to handle hydrogen and replace all cars, lorries, tractors and planes.

   No, I'm not joking. I've seen it in operation; we've been testing these kinds of systems since the mid 80's. I actually saw a hydrogen fuel array system (which had been deployed in ambulances in germany as a test) attached to a test rig while I was at Shell. In fact, they still have a good website explaining the "hydrogen economy".

   How do we rebuild the infrastructure? It should be clear that the decline in oil is a gradual process. This has been clear to the oil majors for decades, and with the exception of Exxon they are all doing enormous amounts of research into what to do once the oil dries up. Exxon have taken the decision to buy in later.

   But it really comes back to the shift in mentality thing. If you think that things will continue as they do now (or not), you're mistaken. We will have to be more efficient. Business doesn't stop because energy is more expensive, instead it becomes economically viable to make it more efficient.

   Where does all the hydrogen come from?

   Electrolysis of sea water.

   And cheap does not just mean price, it also means rate of return (ie. energy out / energy in).

   You mean efficiency. That's the thing about most renewable energy sources; the efficiency is extremely high. PV cells are probably the least efficient of the renewables technologies due to the effort taken in refining silicon, and their low quantum efficiency. The other technologies (wind, wave, tidal) are enormously efficient.

   Again, it is the classic over expectation of technology which probably comes from too many sci-fi films.

   Actually, my analysis of renewables technology comes from time spent working at Shell, and my chemistry PhD. Where does yours come from?

   16 Apr 2006, 10:53

5. Underestimate human civilisations ability to survive", tell that to all previous civilisations that have collapsed. Collapse is the norm, it is inevitable. Why are we different, the bigger we are the hard we will fall, this will be a global collapse

   Most of them collapsed due to invasion. The human race is still very much alive isn't it?

   16 Apr 2006, 11:25

6. Okay. I will accept most of your arguments as being valid. The conclusion I will draw is that we cannot be certain, we may not be able to solve these problems, but then again we might. It is still a good idea to take them seriously and make the public more aware of the issues involved. BTW, your credentials of working at shell and having a chemistry PhD do not mean much. It might just mean you have been indoctrinated with certain beliefs or see things from only one side, but I too am subject to such things so may be wrong. I have been reading a great deal of material for several years on these topics, but I admit I have not explained my points well or in detail, I apologise for that. There are also many experts who agree with this peak oil scenario, including economists and geologists.

   I did not make numbers up, the only numbers included in there are approximately correct. I did not use more numbers because I could not remember them exactly. I did use arbitrary references such as "high", perhaps I should have spent time finding the exact figures.

   I know where hydrogen comes from!, where do we get the electricity was my point. To replace an entire infrastructure is a massive undertaking that may be beyond us, or maybe the economic system will work and solve this problem.

   My maths on the solar issue is wrong? My original workings were not wrong, I just don't have the figures written down. However, you are right about covering all buildings with solar panels, except for the energy intensive industries.

   Oil decline rate estimates vary from 2% per year to 10% per year, we might be able to deal with low rates as you suggest, but if it is any higher than 5% we will struggle to make the required changes in time.

   Still you do not seem to discuss the other issue of population, but perhaps thats because you think that too can be solved by the economy. Do you also believe in sustainable growth, a contradictory term. Things will change but far slower than you might think, there is great resistence to change and such massive changes will take a lot of time. This is a real test for our economic system, lets just hope it passes, if not there will be massive suffering.

   With regard to the other post (again): many have collapsed for reasons other than war. The Maya collapsed due to drought and food shortages combined with other factors. Easter Island collapsed partly due to running out of resources (trees) and the resulting violence. The Roman Empire was a long slow collapse due to many factors including invasion, disintigration of economy and political system, it became to big for its own good. The collapse of civilisation does not mean the end of the species, it is mearly the beginning of the next civilisation.

   16 Apr 2006, 11:52

7. I know where hydrogen comes from!, where do we get the electricity was my point. To replace an entire infrastructure is a massive undertaking that may be beyond us, or maybe the economic system will work and solve this problem.

   Who said there is any need to replace the infrastructure? We have a fully working 50 Hz power system, powered largely by synchronous generators. The only change will be to replace the prime mover from a fossil fuel turbine to a hydrogen turbine, and perhaps the control system.

   Oil decline rate estimates vary from 2% per year to 10% per year, we might be able to deal with low rates as you suggest, but if it is any higher than 5% we will struggle to make the required changes in time.

   Contrary to what a lot of people say, there is still actually a hell of a lot of oil/gas left in the world. I invest in oil/gas explorers, and the likes of Cairn and Victoria Oil have found absolutely huge reserves, and other similar companies are continuing to do so in West Africa, Bengal, East Africa and many other places that the oil majors don't like to venture into.

   16 Apr 2006, 12:10

8. By infrastructure I mean the replacement of petrol stations etc with hydrogen stations and all the associated transportation, storage and production facilities.

   I agree, we have used about 50% of the oil, so there is a lot left, but it's about how much we can extract (how fast), its quality and cost. Many of the massive old oil fields are now in or are about to decline, we rely on these new finds which for the most part are small, low quality and difficult/costly to extract and refine. As a result the rate of production (a missleading word since it is extracted not produced) will decline, just as the rate of production increased for the first 50%. There are many graphs around showing oil supply and demand (www.thoildrum.com). This coincides nicely with the recent price increases (less spare capacity causes concern).

   As for investing in oil exploration, that seems like a good thing to do since there will be increasing demand for more expensive exploration. How big are these "huge" fields, how do they compare to the really big fields such as those in Saudi which were discovered 50 years ago. The rate of field discovery peaked in the 1980's, year on year they are finding less and less but spending more. Very soon (some say 2007) these new finds will not be enough to offset the decline.

   Just to clarify my view… I do not think we will run out instantly, there will likely be a bumpy ride and a plateau before the fall and this will take at least 10 years to cause major problems (10 years from peak).

   16 Apr 2006, 12:52

9. There are also many experts who agree with this peak oil scenario, including economists and geologists.

   I do not for one moment dispute that we are approaching peak oil production, nor that the decline of oil will lead to significant changes to society and the economy. I just don't believe that it will lead to a collapse.

   It all comes down to a balance; how much to force the market toward a longer-term solution that doesn't make economic "sense" now. Due to the vaguaries of stock ownership, most companies only care about the next quarter or year, and the kind of issues that you're touching on here are ones that affect us over generations. So I do bleieve that there is a role for regulation and public policy in encouraging "clean" technologies, and especially in breaking the dependence on oil. But should we cripple the economy now, in order to do that?

   It's all about balance.

   The real kicker, which you only mention in passing, is climate change. This is something that it's much harder for us to adapt to, and should be the primary motivation for less oily power

   Population growth seems to be limited in more developed countries; as economies mature and the average standard of living rises the birthrates fall, to the point where much of europe has serious problems with population replacement. We can only hope that the development of "developing countries" is rapid, raising standards of living faster than populations.

   16 Apr 2006, 13:09

10. I agree with that comment. It seems I think that it will take more force to make the changes viable and that this will damage the rest of the economy. It will only be the oil companies who could afford to do anything as all other industries will suffer, this would give oil companies yet more power, so even if we do not collapse things do not look good.

    "But should we cripple the economy now", that is exactly the problem. We cannot cripple it now as that may cause collapse or huge damage but can we just leave it? The only choice is to take the risk and wait (and hope), this is what the governments are having to do. It's all about balance indeed, and this balance is incredibly fine and complex, I do not think either of us could argue conclusively either way on such a massive issue.

    Climate change is an equally big or bigger problem. It is a seperate topic, although it does relate to the issue of collapse. When oil becomes very expensive and if alternatives are not in place quick enough then people will revert to wood and coal for fuel and this would only increase the climate change problem. We may have already passed or will shortly pass a tipping point which would have devastating effects, this would be a greater threat to civilisation than Oil (since as you say there are alternatives for that). It is another complex system we know too little about to predict.

    As I think I pointed out, for everyone in all countries to have a standard of living like that of the Western world we would need more than one earths worth of resources. Maybe there are other possibilities but either way the current population must be reduced either in a controlled way or by population collapse.

    16 Apr 2006, 13:32

11. Where do we get the electricity from to get hydrogen from sea water? Renewables like solar and wind to start off with or with the last of the fossil fuels, and then by burning some of the hydrogen we have now made? Does that work?

    16 Apr 2006, 21:36

12. James Black

    There are big commodity markets for oil, for both present and future stock. If there really were going to be large price rises in the future the markets would expect it and hence buy barrels today anticipating a profit (as oil barrels today are, apparently according to you, vastly cheaper then they will be 25 years down the line). Hence oil prices today would continually rise until today oil prices are equal to future oil prices, and hence any profit made from stockpiling oil today is eliminated.

    This was clearly seen after 9/11. After the attack oil markets suddenly realised that future oil prices will rise on account of a war probably happening. Hence overnight oil prices rose by a third.

    16 Apr 2006, 23:48

13. Your post is very negative and doomsday-like, and I think more so than is the case in reality. Consider the following points:

    • With regards to oil, you are talking about conventional reserves. Even without a technology shift to other sources of energy (which we in fact currently have technology for), non-conventional reserves outstrip the size of conventional reserves by a factor of around 3 I believe
    
    
    • Nuclear is not as expensive as people make out. In the UK, we have a particularly poor nuclear program because it is the result of a legacy of the cold war arms race, and built with 1950's UK thinking into nuclear power. Our reactor types in the UK are all of the Magnox and AGR (advanced gas cooled reactor) type (with the exception of Sizewell B), which are expensive to run and crucially to decommission. France, a world-leader in nuclear power, uses a superior design called a PWR (pressurised water reactor), which is also common place in the USA. Canada has a variation on this called the PhWR, or pressurised heavy water reactor (which have a number of advantages again over PWR's). And Japan has another variation on the PWR called the BWR (boiling water reactor). All these designs are much better suited to power production than our own, and much cheaper. Let's not also forget the embryonic pebble bed reactors in South Africa, and the breeder (or fast neutron) reactor programs (mainly currently in India). Breeder reactors will extend our useful Uranium supply by about a factor of 60. And then of course, there's fusion, which is the future.
    
    
    • Solar panels (pv types) can actually be made with efficiencies of over 60%. But they're something of a hoax for energy production, at least in this country. Solar hot water on the other hand is a great way of reducing space heating demands, cheap and easy to fit, and available for decades now.
    
    
    • Biofuels are relatively embryonic as well. Consider the facts that we have yet to really mess about with crops to bump up yields (as in, over double yields). There are massive potentials for process improvement in the fermenting/refining process, where modern technologies which are developing fast will be able to help. I read a 2004 NRDC report that suggested the US could be 94% sufficient in transport fuel on bio-fuels alone, grown on spare US agricultural land only (at a predicted 2050 demand of 18m barrels a day)

    I take great issue with your suggestion that progress has slowed. Progress in technical areas continues to accelerate at a mindblowing pace. Look at nanotechnology, genetic research, computing, materials science… All advancing at phenomenal rates. On the macro scale, look how hi-tech military stuff is compared to a decade ago. Compare a mark 4 escort with the new focus and notice the staggering difference in build quality (from manufacturing and materials advancements), the increase in technology, safety, efficiency etc etc. There are hundreds of thousands of very bright minds employed in technology. To suggest that the fruits of their labour are not worth much is a joke.

    17 Apr 2006, 00:19

14. David Kelly: yes but using the solar and such for that would require a lot of solar panels which would otherwise be used for the electricity in our homes. Cannot use the hydrogen we made, you would get less hydrogen back (not 100% efficient and certainly not above 100%).

    James Black: Well, I am basing my arguments on figures which show oil production and oil demand, also reserve discoveries etc… Oil prices are rising (now $69, near record again) and all futures are at almost the same price now (+- $2). Current oil prices are now almost equal to oil futures are they not? There would be little benefit to stock piling at the moment. Anyway, the fact that peak is occuring is hardly something I wish to argue here, refer to www.theoildrum.com or www.energybulletin.net and even the New York Times.

    17 Apr 2006, 08:20

15. Christopher: By non conventional I assume you mean tar sands and such. These are expensive to develope and require more energy input to get energy out than conventional and are hence less efficient so less oil can actually be extracted. Again I will refer you to those other website as they have better more informed arguments than I can give here. Nuclear, maybe so but it still takes 10 years to go through planning, design and construction of such plants and the progress here is a little slow. To replace our existing fossil plants with nuclear and provide the extra energy needed to make hydrogen to replace oil we would need hundreds in this country alone of such plants, granted that there would be other alternatives also in use. I have to admit I have never seen a PV of 60% efficiency (could you provide a link), the best I know of is 30%. How much energy would solar hot water really save? Not much of our total. Biofuels: I have read many counter arguments to that article which do various calculations to show that its figures are wrong (probably at www.energybulletin.net somewhere), the most immediate problem that I can remember with this is that these crops would require massive quantities of fertilizer to produce those yields and this comes from oil/gas.

    Overall, yes there are a lot of alternatives, and none will solve the problem alone. Many studies have also shown that combined (and not using silly figures like 94% biofuel, but realistic ones) will not be enough to offset the removal of fossil fuels. Like many of you above I initially though all these things would work but then I looked deeper and found all the flaws. Maybe the economy will work and allow us to implement all of these quick enough, but there is a lot to suggest that it will not do it in time. Even if the money becomes available, will there be enough time and stability (will the poor rise up and riot about being unable to afford food) to actually implement these.

    My argument about progress is that it is actually slowing, more importantly it is costing more money, time and resources to develope even the smallest advances. What has really changed with computers? We having slightly faster PCs than a year ago (not much), nothing revolutionary happening here. Where are all these virtual reality systems we were promised. Compare a car now to a car 50 or more years ago, yes there have been improvements but not 50 years worth (not as much as you would think in that time). In the last 10 years next to nothing has changed, actually fuel efficiency on average has decreased since the 1980s. I will admit there is still a lot we can do but it is rapidly becomming more difficult to do it and most fields have reached those limits (the ones u mention are about the only ones that have not). How have our lives changed in the last decade, we have internet (but that was invented a long time ago now), we have iPods, but that is just a slow natural progression of existing technologies.

    Anyway, I appologize for starting this, it seems no one is willing to look at the possibility that some of what I say may be true. Perhaps I ranted a little to much in the original post. Mostly these disagreements seem to come from the fact that I did not explain everything in great detail, I assure you I have considered all of these arguments in great detail over the years, I am sorry I cannot remember every argument well enough to debate it, perhaps I should write a thesis where I contain all the facts, figues, references and so on. All I ask is that you consider it. It is quite possible that I am wrong, but if we do not collapse then where is our civilisation heading? Surely we should not ignore history.

    17 Apr 2006, 08:20

16. Non-conventional reserves may be more expensive to develop than conventional, but as oil prices rise they are becoming economically viable (and yes I mean tar sands and oil shale). Also, by integrating our energy technologies better (say, using waste low grade heat from power stations to feed the extraction and refinement processes), we essentially get for free a lot of the extraction energy that would otherwise have been wasted. I wouldn't say we necessarily need "hundreds" of power stations; most reactors are in the order of 600MW. The UK base load is around 47GW, so even if we provided all of our energy from nuclear (not likely and I'm not arguing for it at this stage of nuclear development), we would require the constuction of 78 reactors (most of which are doubled up on site anyway, so around 40 sites in the UK).

    Solar PV's – for efficiencies of greater than 60%, look at cells where the semiconductors ("plastic" types, such as cadmium selenide) are are constructed using nanotechnology. By forming nanorods or quantum dots of semiconductor on the surface of the cell, you are able to very finely control the bandgap energies (i.e. we maximise the amount of light in the higher energy frequencies that can be absorbed). In this way, energy efficiencies of greater than 60% are possible. Of course, such technology is prohibitively expensive to all but the most critical of applications (space craft, where the cost of weight is such that it makes sense to pour more money into developing smaller collectors, are about the only application for this). But then, on earth you don't want the most efficient collector, you want the most bang for your buck (i.e. efficiency to cost per square metre ratio). This is where most people go wrong with renewables – because they are so used to dealing with fuels that cost, they treat efficiency as the goal. With renewables, you're not paying for your energy so the driving fuel is free, and all we want to do is extract the most power for our money, not the most efficiency. For power production from the sun that makes sense, look to solar concentrating collector arrays (SEGS and Solar 2 in the USA, the planned Solar Tres system in Spain, and a system that I forget the name of that is currently being built in Australia. Alternatively, look at solar chimneys. Appauling efficiency, but really cheap to make (about 1.2 times the cost of coal). I don't think your assessment of solar thermal is accurate. One of hundreds of examples – look at the Trisol solar houses built in the highlands, and contribute around 33% of the heating demand. This is not insignificant! This can be pushed up further if we adapt technology used in Sweden and Norway – for example the use of large ground thermal stores that are heated in the summer and then extracted during the winter with ground source heat pumps.

    Fertiliser is energy intensive, but again we have plenty of ways of making energy that will help us make fertiliser without eating into fossil fuels. I'm not suggesting that most biofuels are a serious answer to energy production (rather, a serious answer to provide transport fuel); however co-firing with biomass (such as coppiced willow, which is easy and not energy intensive to grow) has it's advantages and could reduce our fuel burn a bit. Especially mixed with sequestration technologies for coal (which we have massive supplies of), we aren't exactly stuck just yet.

    I'm not suggesting any one technology will solve the problem. But a mix of technologies that are a lot further on than many people think will change the way we meet energy demands over the next 100 years. Scientists and engineers aren't stupid people; we've seen these problems coming from a long way off and we're ready to solve these problems. Our frustration is in the slowness of market acceptance of the things that we create! (cont)

    17 Apr 2006, 09:50

17. … We need to build a lot more power stations now to avoid blackouts in the coming decades; relatively little is currently being done. When it is, we have the solutions ready.

    Where do you get your information that research is slowing and costing so much more? The law of diminishing returns shows that as we advance further it takes more effort to make advances; however we're hardly there yet. What has changed with computers? Well we're currently in the process of moving to a 64 bit architecture, hard disk sizes continue to expand at phenomenal rates; look at the advances in TFT's etc etc. We are moving away from ever increasing processor speeds because there isn't the market demand to drive the research anymore; rather we want more features than more speed, because there's little software that really demands more than the modern PC has to give. We're a good way away from the limit of Moore's law yet (we're switching to 0.09 micron processors which is still miles off of atomic size). To date we haven't seen VR, but then technology is littered with things like flying cars, living on the moon, science fiction type ideas that just haven't materialised. That doesn't mean that we haven't made progress!

    Again with cars I take issue that we have made big improvements. Fuel efficiency has not increased as much as it might for a number of reasons – firstly there has been an increase in focus on emissions instead of outright efficiency (the two are different) and so with things like catalytic converters and engine mapping we are foregoing the optimum for fuel economy set-up to reduce production of things like NOx, CO and particulates. In the past 10 years alone look at the growth in diesel car sales due to massive advancements there (chiefly due to fuel injection advances), the increase in safety due to vehicle structural design and things like airbags, the take-up of features like satellite navigation, climate control, voice activation, parking sensors even on relatively cheap cars now, the improvement in build quality and reliability, the quality of fit/finish and material textures, the advances in engine technology in general (variable geometry turbochargers, common rail fuel injection, variable valve timing, increase of three way catalysts). Advances are being made abound, just not in fuel economy because the market has chosen to go down the route of demanding more features, safety and performance than increased fuel economy. Although the takeup of diesels has pushed fuel economy up anyway. History is littered with people who have suggested we've reached the peak, the limit of advancement (such as 100 years ago just before relativity was discovered, where it was widely thought we'd pretty much finished with physics) and then look what's happened in the past 100 years. To suggest that we're done and dusted with advancement when we have so much left to do is false I believe, and I take issue with it.

    With regards to the sentiments of your original post, I do believe some of it to be true. For example, I don't deny peak oil or that it's rapidly approaching us, or even might have just passed (although there's plenty more development that could be done of Arabian sources in particular if they'd invest in extra capacity to meet demand, OPEC is just unwilling to). I also think that the population advances we're seeing and getting predicted are unsustainable; I think that over time a halving of the world population would do us a great deal of good. I am also frustrated with the lack of motion of large companies and government to move towards alternatives on a meaningful scale. My main bone of contention is your suggestion that we have little advancement left to do, or that we don't have the solutions to problems when the powers that be try to implement them, be it too late or not.

    17 Apr 2006, 09:50

18. I have to admit I have never seen a PV of 60% efficiency (could you provide a link)

    Look up any of the papers by R.D. Shaller and V.I. Klimov. They're experimental still, but they're on the way.

    Compare a car now to a car 50 or more years ago, yes there have been improvements but not 50 years worth (not as much as you would think in that time).

    How on earth can you judge what are 50 years of improvements are worth? Compare the cost of a car now with the cost of a car 50 years ago.

    And so I withdraw from this discussion. It's clear that your understanding of economics is limited, and I get the impression that you're just spouting "facts" from random websites; If you're going to engage in a rigorous debate it is essential to really understand what it is you're talking about: I don't feel that you do.

    17 Apr 2006, 10:08

19. Hmmm, a very big and good comment. Maybe there are enough alternatives, although I have read too many good arguments about there not being enough to change my mind on your post alone. We have not finished with advancement, I did not claim that, there is a lot more to do but prices would have to rise to allow these to happen (currently it is shear quantity that allows them to be cheap, what happens when people have to pay more for fuel and food and so less buy these products). The real question that I am trying to get at here is can we actually do this in time. Who benefits from high oil prices? Only oil companies. Will those oil companies invest sufficiently in alternatives and then implement them? They may not do it, it is risky to rely on these companies. I cannot claim to absolutely know the anwser, but these things a nagging at me and I am worring about how we will achieve it.

    Thanks for all these comments, it is always useful to re-evalutate ones ideas, even if my own conclusions have changed little.

    17 Apr 2006, 10:09

20. To fully understand everything involved in such a debate is next to impossible. It seems you do not understand all the issues either, just the economics (of which I admit I know little). Obviously it seems my debating skill is non-existant and so further discussion is pointless. The End, I hope.

    17 Apr 2006, 10:26

21. Arguments on both sides are often over simplistic, failing to take into account very important factors associated with change and often based on false data to begin with (example – nuclear cost projections based on past UK nuclear experience instead of concentrating on the more modern and superior reactor designs, which are cheaper). Economists tend to produce overly optimistic estimates because they don't fully understand the technical side of the problem, nor the implications both technical and practical of widespread change. On the other hand, most negative articles tend to base their information on data that we have currently or from the proven past, not taking into account the fact that embryonic technologies will improve in design, reliability, performance and most crucially build cost as they are developed. In short, it's somewhere in the middle. I get your point about time, it's an important thing to consider that most people don't, but nevertheless I think to worry excessively about the future that we just can't reliably predict in reality is a sightly fruitless exercise. The reality I believe is somewhere in the middle.

    And a final word on oil companies – whilst corporations are mostly geared toward short term gains, it's no use for long term strategy if they cease to exist once oil runs out. Their methods might not be in tune with the way of thinking of the current alternatives crowd (micro generation etc), but at the end of the day it makes sense for oil and energy companies to position themselves in a position where they will continue to meet demands of the consumer once oil runs out, hence their investment in future technology. They just want to make plenty of money out of oil first before making the switch. But bear in mind, a bankrupt economy benefits no-one, including the oil companies, so I shouldn't worry yourself too much :-). And with that, I too end my contributions.

    17 Apr 2006, 10:51

22. Whether or not anyone agrees, the comments above are have been good. I know absolutely nothing about various technologies so reading the views of others can be insightful.

    I’d like to go back to the point about futures made earlier. Predictions of catastrophic economic failure aren’t aligned with current market data. On the New York Mercantile Exchange futures contracts can be traded for periods up to 2012. As of today, you could get a contract for delivery of crude oil in December 2012 at $66.20 a barrel (see here ). If we should expect a rate of price increase incompatible with gradual adaptation to new habits and technologies, why is oil 6 years hence priced below the current spot price? Markets can act irrationally, but dealers have immense incentives to evaluate data on energy availability and on the basis of that data drive prices to their correct value. I’m inclined to believe the collective wisdom of those commodity dealers given that their future wealth depends on whether or not the doom-mongers are correct. Anyone who thinks sky high oil prices in the future are a certainty should be stocking up on such contracts right now. The market would disagree with you, but if correct, you stand to make an absolute fortune.

    17 Apr 2006, 12:34

23. Futures markets are not something I know a lot about, but what you said would seem to make sense. There is a great deal of uncertainty over when peak oil will occur and most oil companies tend to say it's going to be later rather than sooner. Perhaps they do not think peak will occur until after 2012 and that the current spare capacity will not change in that time (although I am unsure why they think that). Prices may be higher now for political reasons which they see as being resolved by 2012, hence the slightly lower price. I could of course be talking shit. Out of interest, what were the futures prices for oil for April 2006 several years ago, were they not lower than they actually are now? If the answer is yes then it would seem to suggest that futures markets cannot be relied apon.

    17 Apr 2006, 13:33

24. Predictions of catastrophic economic failure aren't aligned with current market data.

    Has anyone looked at past data to see exactly how good a predictor futures contracts have proved to have been in the past? I understand that most predictions of the future rely on simple extrapolations of current trends – tipping points are ignored (as they are too difficult to handle).

    Oil price rises in the 70's and 80's were associated with significant economic recessions. People take time to adjust to new realities.

    Personally I take a middle view. Technological innovations invisible to the bulk of the population won't be enough, but total collapse won't occur either. People will have to accept life-style changes (holidays cycling to France rather than flying to Bali?) but nothing which might be described as catastrophic.

    17 Apr 2006, 15:19

25. Nicholas and George, you’re both quite right. I’m not sure how well these markets have faired when it comes to prediction. I can try and find some charts though. There is no reason why there should be systematic over or under estimation of future prices however. Large deviations will be due to unforeseen shocks, technological or political. Some form of ‘tipping point’ may exist but by nature, its existence cannot be verified nor is it possible to model the time at which it will occur if it exists. That complicates the task of those proposing time sensitive government solutions to potential problems.

    The forecasting carried out by firms wouldn’t be naive extrapolation of trends. The profitability and future of Shell, BP, Virgin Atlantic, UPS, etc. depend on accurate forecasting and hedging of risk. Experts don’t reside only in universities and independent energy think tanks. Companies and individuals have the cash and the incentive to employ people equally as qualified as those professing disaster. Overall what we can say is that given the information available today, predictions of rapid price escalation in the near future don’t seem convincing enough for speculators, individual investors and firms to start bidding up prices. The data these groups are using are exactly the same data used by those who predict economic disaster in the next 10 years. They cannot both be right. What can account for the huge discrepancy? Does the fact that market participants have real money riding on their views make their collective opinion more/less believable? In all, I think I agree with George's middle road.

    17 Apr 2006, 18:38

26. As a matter of interest (and to aid my cronic lack of understand of economics), I would like to pose a small question:

    What if oil has to reach say $400 per barrel for it to become economically viable to make all these required changes (this figure may be wildly inacurate, but for sake of argument…). Obviously at that level the majority of the population could not afford oil (to drive their cars), but nor could they actually afford the alternatives since they to would be too expensive. Would you not end up with a situation where in theory it is economically viable but in practive no one can afford either? I understand that the alternatives may get cheaper (economies of scale…), but not enough and not fast enough perhaps.

    I may be missing something. It may be that these alternatives become viable at a level which enough people can afford. I can see two thresholds here, 1) at what point does it become impossible for people to afford such prices and 2) at what level do the alternatives become viable. As a result, either the economy will suffer but recover in time or it may fail completely depending on the relationship between these thresholds. I would appreciate any comments that find issue with this since I probably do not understand something.

    17 Apr 2006, 20:28

27. Here is where some of my blogs arguments came from.

    17 Apr 2006, 21:07

28. Isn't the stock economist's answer that if the price of oil went up, users would switch to substitutes? The so-called price mechanism.

    Isn't there a lot of coal in the world and isn't that a good substitute for oil for heating, electricity production and as a chemical feedstock? Although I suspect that oil would have to be a lot more expensive than $60 a barrel to make it economically worthwhile to obtain aviation fuel from coal.

    Sometimes the switch to the substitute would be invisible to the general public (e.g. the 1970's switch from oil to coal fired power stations, the more recent switch to gas). Sometimes it would effect the general public's comfort zone – e.g. flights being 20 times more expensive?

    Why is not being able to afford to fly a big deal? Why is not being able to use a car a big deal? – I haven't owned one since 1989.

    Burning coal like burning oil does have a climate change impact, so as has been already written perhaps climate change is a more serious issue. There's no price mechanism to pressurise users into changing their behaviour. Unless we are talking about the Carbon Tax.

    18 Apr 2006, 09:46

29. Indeed you are correct about coal and even wood becoming a better alternative, that would be going backwards not forwards because there were reasons we moved to oil in the first place (being cheaper, easier to handle and more efficient). In the process of this energy change we will uterly destroy the environment. My view is that this is exactly what will happen, all these nice alternatives will never become viable and coal will take its place.

    BTW. People cannot just stop using cars. I do not drive, but many will not be in such a situation. Tractors and lorries will still need to run. Commuters need to commute, shoppers need to travel. Without the ease of a car people cannot travel much and cannot therefore consume at the shops. Alternatives exist (bikes), but this is a global economy, how can everyone suddenly become trapped to local communities and this economy still survive.

    18 Apr 2006, 12:46

30. Taking issue with your last point (I've not read every word of the thread, I'm afraid), the economy can adapt to survive, and needn't take the doomsday shape you predict.

    For instance, you assert that "commuters need to commute, shoppers need to travel". To refer to that individual point, there are two reasons why the above is not true. Firstly is the internet. Working and shopping from home (technological advancements we could only dream about, even ten years ago), are now a reality, and have proven not to result in any loss of efficiency to the economy. In fact, isn't it cheaper for a company to have its staff work at home rather than provide expensive office space for them? Instantly you negate the need for commuting.

    And secondly (and this requires future rather than existing adaptation), commuters don't need to commute. They choose to. Future developments may make it more attractive for people to work close to where they live, and also for people to shop in a local community (I've heard that used to happen not so long ago!). While the idea of ending the daily commute may be unattractive to some, I don't see that such a change would have any disastrous effects on the economy. Much of what you say "needs" or "must" happen is in fact simply a choice that consumers and workers make, not an actual necessity.

    18 Apr 2006, 14:15

31. It is all a matter of time. How long would it take to make these changes and how long do we have (from the point that we realise they must be made). Not everyone can work at home (labour is still required unless we automate everything, which is still a long way off). The internet does help, and this is why I believe we will have time after peak oil before things get bad, because of this demand destruction.

    Forgive me if I am wrong but our economy is based on growth, can it cope with going backwards even for a short time? However fast the economy might react in theory there are limits on how fast things can be done. It all depends on how fast oil declines after peak, evidence suggests (analysis of existing declining oil fields and the effects of modern drilling techniques…) that this decline could be up to 10% per year (after the initial delay).

    It is nice how everyone argues these individual points out of context with the rest of my argument, taken alone the economy could probably solve any of them. Only together do they create massive problems.

    18 Apr 2006, 14:45

32. Another problem, many companies (particularly those that depend on energy) will likely go out of business of at best have to make redundancies if energy costs went up too far (this is already happening). This could create unemployment on a large scale to add further problems for the economy, government and social order…

    18 Apr 2006, 14:50

33. Again your arguments seem very one-sided and don't attempt to explore the possibilities (hence creating such a long thread of comments, filling in the gaps for you!)

    If energy costs become too much for business, the demand for new energy sources will increase rapidly. Again, adaptation, rather than crisis.

    Secondly, I don't see where I (or anyone else) suggested that the economy should be allowed to go backwards. Are you assuming that adaptation infers that?

    Challenges in the global economy have never come one-at-a-time, and have often hit together. Yet they have all been steered around so far. Even the larger economic crises of the last century have not caused long-lasting damage. I wonder how your argument looks in historical context, compared with previous 'crises' which turned out to be overblown.

    Finally, if individual points are argued one at a time (I'd disagree that they're out of context), then that is probably an indication of the scope of the argument rather than any deliberate laziness on our part. I'm sure I agree with some of what you've said, but I don't really feel the need to list every individual point I disagree with you on, hence my selection of the key arguments on their own. Instead, I was picking you up on a couple of apparently factual statements that you made which I would suggest are open to argument.

    18 Apr 2006, 17:19

34. Who cares. It does not matter who is right, what will happen will happen and only then shall we know. I am insulted that you all think I am stupid, you underestimate the amount of thought I have put into these issues and the hugely complex relationships between each issue (I did not unfortunately put the same effort into writing this blog). You assume that because I have not said everything (explored the possibilities), or explicitly made every connection that my arguments are crap. They are crap on their own but they are not on their own, in the bigger picture they begin to make sense. See my followup to perhaps get a better sense of this bigger picture (the complexity of it), although I feel you will only insult my intelligence there as well. I apologise for insulting you, because if you knew me you would not think I was stupid and may perhaps have been more willing to entertain my seemingly crazy ideas without such insults and missunderstandings.

    The End, I have blocked all further comments on this post.

    18 Apr 2006, 20:47