« Roubini: Fiscal Follies | Main | Why We Need an Individual Mandate for Health Insurance »

Tuesday, December 14, 2010

"Peak Oil is Stupid"

Tim Haab at Environmental Economics:

'Peak Coaler' just doesn't have the same ring, but I bet it raises the same vitriol for stupid economists: Time for some snark:

When will production of oil and coal peak? 

Better question: Who cares? 

Betterer question:  When will oil and coal run out?

Even betterer question: When will oil and coal reserves be depleted to the point that prices adjust to make investments in renewables make economic sense without the need for goofy (laymen speak for inefficient) government policies?

After the peak, production will decline because supplies are being depleted and no new sources are to be found. ...

Peak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. 

Terminal Decline? A sequel to a 1990's Charlie Sheen movie?

Optimistic estimations of peak production forecast the global decline will begin by 2020 or later, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.

I think they just called me an optimist.

Pessimistic predictions of future oil production operate on the thesis that either the peak has already occurred, that oil production is on the cusp of the peak, or that it will occur shortly. 

Who cares?  Oh wait, I already asked that.

Must be time to update my semi-regular 'peak oil is stupid' rant.  So here goes...

I don't care when oil (OR COAL) peaks, I care when we run out, which we won't because, as production declines, prices WILL rise. As prices rise, people WILL figure out alternatives. They might not be happy alternatives. They might not be as productive alternatives. They might not support the same lifestyle to which we are accustomed. But there WILL be alternatives, forced by higher prices--and no other mechanism is that powerful. 

See, I'm an optimist.

It's the end of the world as we know it...

And I feel fine.

    Posted by on Tuesday, December 14, 2010 at 10:06 AM in Economics, Environment | Permalink  Comments (91)


    Feed You can follow this conversation by subscribing to the comment feed for this post.