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| Mick Harper wrote: | | The official Applied Epistemological position on oil is an application of the "What is is what was' rule. Since the oil industry has been claiming "There are only thirty years of reserves left!" since they first started drilling for oil in the 1860's, it is a reasonable assumption that this will always be the case. |
But in terms of US oil production (easily accessible oil - not tar sands kind of stuff) Hubbert's peak was hit in the early 70's. This is about when Mr.Hubbert said it would be hit. Maybe he just got lucky, he was wrong about the peak for natural gas, but maybe he was onto something. If Hubbert's peak was in fact reached for the US, why could the rest of the world not reach Hubbert's peak?
Isn't it just faulty reasoning by induction to assume that there always has been lots of oil and there always will be? Kind of like saying in the Maritimes a few decades ago, "well there has always been lots of cod, therefore there always will be lots of cod."
| Mick Harper wrote: | | In other words oil is not limited. There is, for all practical purposes, an infinite supply. |
But what are our practical purposes? If humanity's practical purposes are to start building Atlantas and Calgaries in countries where they don't have Atlantas and Calgaries, which according to National Geographic, China seems intent on doing, then I don't think there will be enough oil.
But if "for all practical purposes" means to go back to living like farmers, then yes, you could probably say there is an infinite amount of oil. But isn't that just moving the goal posts in a sense? When people talk about there being enough oil, they think enough means "Of course there is enough oil for you to live in your open-air floorplan McMansion with 1000 square feet for person, drive your Excursion everywhere and for all of your neighbours to do the exact same as well." They don't think enough means "Of course there is enough oil. You've just got to go live in small farming villages."
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Ishmael
In: Toronto
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| EndlesslyRocking wrote: | | But in terms of US oil production (easily accessible oil - not tar sands kind of stuff) Hubbert's peak was hit in the early 70's. |
Marginal reserves have been tapped, not because conventional supplies have peaked but because demand has risen so dramatically.
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Ishmael
In: Toronto
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| EndlesslyRocking wrote: | | But what are our practical purposes? If humanity's practical purposes are to start building Atlantas and Calgaries in countries where they don't have Atlantas and Calgaries, which according to National Geographic, China seems intent on doing, then I don't think there will be enough oil. |
Au contraire.
The greater the demand, the greater the supply.
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Komorikid
In: Gold Coast, Australia
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There is no oil crisis because oil is not a "Fossil Fuel"
It is being reproduced all the time.
"Hydrocarbons are not biology reworked by geology (as the traditional view would hold) but rather geology reworked by biology."
The origin of coal, oil, and gas deposits has an abiogenic origin. Coal and crude oil deposits have their origins in natural gas flows which feed bacteria living at extreme depths under the surface of the Earth; in other words, oil and coal are produced through deep forces in the lithosphere, rather than from the decomposition of fossils.
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| Komorikid wrote: | | The origin of coal, oil, and gas deposits has an abiogenic origin. Coal and crude oil deposits have their origins in natural gas flows which feed bacteria living at extreme depths under the surface of the Earth; in other words, oil and coal are produced through deep forces in the lithosphere, rather than from the decomposition of fossils. |
But how long does this process take? Suppose that we've used up X units of sweet light crude so far. If if takes, say 300 years, to wait for the abiogenic process to produce another X units of sweet light crude, then for our present economic purposes it is non-renewable. Our timeline until we reach a crisis is very short.
I think everyone would agree that oil and gas prices are going up. The orthodox reason for this (the "Cornucopian" view in the jargon) is that there is lots and lots of cheap recoverable oil and prices are only going up because publicly traded oil and gas behemoths are consipiring to raise prices.
The other orthodox view for the price increase (the "peakist" view) is that this is the end of the cheaply recoverable oil era
If the Cornucopians are right, then there is no problem. We'll just find a new way for CEOs and people on Wall Street to be grossly overcompensated for very little work, and prices will drop back down to normal.
If the peakists are right, then I do think we will enter into the era of the "long emergency" because our lifestyle functions on the premise that there will always be lots of cheap energy. People assume that next year will be just like this one, except maybe 1% or 2% more expensive, not 20% more expensive. If next year is 20% more expensive, and the next year after that 20% more expensive, chaos will result because we have no psychological fault tolerance for dealing with huge year-over-year increases.
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| Ishmael wrote: | | EndlesslyRocking wrote: | | But what are our practical purposes? If humanity's practical purposes are to start building Atlantas and Calgaries in countries where they don't have Atlantas and Calgaries, which according to National Geographic, China seems intent on doing, then I don't think there will be enough oil. |
Au contraire.
The greater the demand, the greater the supply. |
But why wasn't this the case with the cod?
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Komorikid
In: Gold Coast, Australia
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Hatty
Site Admin
In: Berkshire
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Lemme guess.... nuclear?
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Mick Harper
Site Admin
In: London
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Surely history demands that, provisionally, we ought to support the 'cornucopian' position since we have two previous occasions when oil prices leapt without any apparent change in underlying market conditions -- the Yom Kippur spike and another one (can't remember what, but it was similarly engineered by OPEC though this time not necessarily deliberately).
On the other hand, we have a hundred and fifty years experience of the cornucopia position ie an ever-increasing demand being met constantly by supply at a stable price.
But even if the Peakists are correct, and we have to get used to barrel prices in the hundreds of dollars indefinitely, we have sound historical reasons not to worry. This is because Britain and several other major economies have been operating a policy of charging hundreds of dollars per barrel for many decades (via punitive taxation) and nothing much has happened. The truth is, oil is so goddamned useful but is such a small amount of total costs, that pretty much any oil price is containable by any reasonably diversified economy.
But history gives us another lesson: being Alarmist is always either the majority orthodoxy or the largest minority one and societies constantly swing between the two. It's called the Pelasgian Cycle.
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Komorikid
In: Gold Coast, Australia
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| Hatty wrote: | | Lemme guess.... nuclear? |
No it's not Nuclear but the same technology can render nuclear waste safe and thereby eliminate the environmental and terrorist threat associated with it.
It can also make coal-fired power stations burn cleaner and more efficiently without resorting to expensive downstream filters.
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Ishmael
In: Toronto
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| EndlesslyRocking wrote: | | The other orthodox view for the price increase (the "peakist" view) is that this is the end of the cheaply recoverable oil era |
It is the end of the cheaply recoverable oil era only because the cheaply recoverable oil areas are already maximally tapped. It has nothing to do with the cheaply recoverable oil having been in any way exhausted or even in decline.
Prices go up because demand increases. The system requires a signal to trigger the exploitation of sources less easily tapped.
Some maples are easy to tap for syrup Some trees are less easy to tap. Doesn't mean some day we won't have any sauce left for our pancakes. Maple syrup is more expensive than sugar substitutes simply because it's so damn delicious!
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Ishmael
In: Toronto
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| EndlesslyRocking wrote: | | But why wasn't this the case with the cod? |
Because no one owned the cod. That's one of the reasons.
On the other hand, even in the case of publicly owned and nationally ambiguous comodities, it still did eventually work for cod. The supply is now increasing (but of course, this is not an analagous situation because world wide demand for cod has not increased).
Fish that can't be sold -- now those are the ones that are most likely to go extinct.
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Mick Harper
Site Admin
In: London
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I think it's time to set out the full AE position on oil. The basic technique is to aggregate together everything that is known about oil exploration. Which is simply done by examining the long-term success rate of wildcatting -- drilling holes in virgin territory.
In THOBR I pointed out that the success rate hasn't changed from one in ten since wildcatting began in the 1860's. I then used that figure, or rather the constancy through time of that figure, to claim that therefore oil must occur randomly under roughly ten per cent of the earth's surface. A fair enough simplification in a book about palaeolinguistics, but consider a few complications:
1. The length of wells ought to be proportionate to the success rate. If you drill twice as far into the earth you ought to have twice the rate of randomly hitting oil. I presume the length of drilling has been increasing all the time, so the odds ought to be coming down too....but they haven't.
2. Not all wildcatting is wildcatting. Or rather, unlike women, land can be at various stages of virginality. If I drill a well between two Saudi producing wells, my chances of striking oil won't be ten per cent , it will be virtually a hundred per cent. If I drill fifty miles away from a known producing well, clearly the ten per cent rate goes up compared to 100 miles. (Unless, which is entirely possible, oil production in the ground is actually negated by nearby oil.) As the world fills up with land already drilled, this factor will become more and more important. I can't work out whether the rate ought to go up or down....can someone help?
3. The whole ten per cent might be explained by another factor: the cost of wildcatting vis a vis the profits of oil. If it turns out that drilling a hole in virgin territory costs roughly a tenth of the profits from the average strike, then it might be (especially since oil prices have been stable for most of the oil industry's history) that the ten per cent reflects 'long term opportunity cost' (I think that's the term, it's a long time since I did academic economics).
4. I'll post them up as they occur to me.
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Ishmael
In: Toronto
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| Mick Harper wrote: | | ... the full AE position on oil... |
I wish you wouldn't do that.
AE does not have a position. You have one, arrived at using AE methods (which makes automatically your position superior to any alternative, granted).
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Mick Harper
Site Admin
In: London
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You forget we operate by the Fuehrerprinzip which means, in this context, that mine is the AEL position by default (and so long as I advance a properly AE argument). Fight or flight, Pagliacci.
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