There was a Woody Allen movie (one of the old, funny ones) in which he flashed back to his neurotic childhood, and he was being counseled by a rabbi about his irrational fear that the earth will one day perish as it hurtled toward the sun. That the event would occur many millennia in the future didn't matter.
Those who fear peak oil seem to fall into that same category. According to this Wicki-nition, peak oil is the point at which the maximum rate of petroleum production is reached, followed by a decline. Another way to put it is the point at which the total of earth's producible petroleum supply is half gone.
The technology of oil exploration and production is continually advancing, and maybe Moore's law applies in that field as well as in semi-conductors. The result is that more petroleum is being found and produced, but much of that has to do with the price of oil.
This brings us to Tim Worstall's article Can we please just declare the end of 'peak oil' and start worrying about something important?. Quote:
There is no such thing as "supply" or "demand". There is only either of them at a price. So, if there really is a limit on how fast we can pump the stuff up, the price will rise.
Like it is at the moment. There's a lot more demand for $50-a-barrel oil than there is supply of it, which is why the price is $100 a barrel. It's true that if we really do reach some production plateau, then it's likely that the price will rise.
But more importantly:
Even if we accept the geological conventional wisdom, then there's still no cause for panic. Prices will rise, yes, so people will go off and do other things. Either use something else instead of oil (that ever cheaper shale gas for example) or simply doing things that require less energy. That's what a price system is for, after all, providing the signals that a certain resource is in scarce supply.
When the price rises, there will be more effort in finding and developing petroleum by the producers. And he sums this next part up quite nicely: if the price gets too high, customers will seek alternatives.
Whether we are half full or half empty, it doesn't much matter.
Worstell article found at Carpe Diem.
You might be able to afford gasoline or its future technological equivalent at $20, $50, $100 per gallon. Many will not be able to. Many already are not able to. People are beginning to starve because the gasoline needed to bring food to their tables is too expensive. That is the problem.
Posted by: Ian Cooper | May 20, 2012 at 08:08 AM
Ian, a price of $20 per gallon is about five times the current price and would imply a very serious inflationary situation.
We probably wouldn't be able to afford the food, either.
Posted by: Geo | May 20, 2012 at 09:09 AM