[p2p-research] no oil crisis?

[Paul D. Fernhout]

Michel-

With all due respect about the value of peer economies, this is an issue of 
free markets and resources that conventional economists are right about 
(ignoring all the things they are wrong about or ignore like externalities, 
systemic risks, democratic implications of wealth concentration, war 
incentives, increasing unemployment and starvation amidst plenty, etc.)

Markets (when functioning) respond to scarcity by improving efficiency, 
finding substitutions, paying for innovation, or by changing other 
priorities, or doing something else.

Points #2 and #4 of what you list are the important ones (substitution and 
innovation).

If we can produce an infinite supply of oil if we want, like with algae and 
seawater, or with carbon fixation powered by solar panels, then where is the 
limit? Those will become cheaper than the cost of pulling the last hard to 
get oil out of the ground or out of tar sands, and so we will never run out 
of oil. :-)

Helium I'm more worried about, but even there, since we can get helium out 
of the air, we will never run out of it either. We may need to change 
various industrial and scientific processes though -- and in ways that may 
be more disruptive than oil limits because few people are worrying about the 
helium crisis.

When we have hundreds of years worth of coal at our current energy useage 
amounts, Peak Oil is just a statement about mercury etc. pollution from coal 
and the desecration of the land by mountaintop removal, really. An important 
statement, but not a crisis in any way like what Peak Oilers make out. Come 
on, WWII Germany almost took over the world using coal; and seventy years 
later we should be scared on not having enough oil? Doesn't make any sense. 
Switching to coal would be inconvenient to the tune of trillions of US 
dollars, and cost lots of lives in terms of pollution and mining accidents 
(unless we automated mining, which we know how to do) but on the scale of a 
US$60 trillion annual global economy, hardly noticeable in some ways. 
Naturally, I'd prefer we switch to renewables for all the market failure 
reasons I listed above (external costs, democratic issues, distribution of 
affluence, minimize system brittleness, etc.) and the market is not able to 
price those in without government or peers stepping in to to regulate, 
affect, or bypass the market with their own plans.

With the exception of helium that floats away, there are no resource crises 
I can see that are not solvable in fairly straightforward ways.

--Paul Fernhout
http://www.pdfernhout.net/

Michel Bauwens wrote:
> Sorry Paul,
> 
> but the argument that oil is not finite is just fallacious
> 
> just take any of his 6 points and not one of them is not seriously
> problematic, it almost seems like he is joking
> 
> 1) it is not finite because we cannot count them///!!!
> 2) it is not finite becuase it can be replace by vegetables which compete
> with the food supply ...???!!!
> 3) the EORIE on tar sands is extremely bad and environmentally destructive
> 4) it is not finite because we can REPLACE it with something else ?????
> 
> etc ... I don't any of this would pass a beginner's logic class ... if the
> post-scarcity thesis has to rely on these kind of arguments, the situation
> is desperate indeed ...
> 
> Please check the Peak Oil tag in delicious, it has plenty of material, and
> peak oil is now accepted, by both the EIA and the US DoE .. they both
> predict that future supply will be increasingly short of demand and become
> more expensive as time goes by ...
> 
> 
> 
> On Thu, Aug 6, 2009 at 9:56 PM, Paul D. Fernhout <
> pdfernhout at kurtz-fernhout.com> wrote:
> 
>> Michel Bauwens wrote:
>>
>>> Hi Paul,
>>>
>>> is chapter 11 is anything to go by ... Julian Simon's book must be total
>>> crap  ...
>>>
>>> http://www.juliansimon.com/writings/Ultimate_Resource/
>>>
>> OK, so where do you disagree with, say, this:
>> """
>>   You may wonder whether "non-renewable" energy resources such as oil,
>> coal, and natural  gas differ from the recyclable minerals in such a fashion
>> that the non-finite arguments  in earlier chapters do not apply.  Eventually
>> we'll burn all the coal and oil that powered these impressive advances, you
>> may be thinking.  But our energy supply also is  non-finite, including oil
>> as an important example. That was not a misprint. In chapter 3  I showed
>> that it is necessary to say how one would count the amount of a resource if
>> one  is to meaningfully say that the resource is finite.  Therefore, let's
>> consider the  following sequence of difficulties with respect to counting
>> the amount of oil.  As with  other resources, careful thinking leads to the
>> conclusion that the potential amount of oil - and even more, the amount of
>> the services that we now get from oil - is not finite.
>>   (1) The oil potential of a particular well may be measured, and hence it
>> is limited  (though it is interesting and relevant that as we develop new
>> ways of extracting hard-to-get oil, the economic capacity of a well
>> increases). But the number of wells that will  eventually produce oil, and
>> in what quantities, is not known or measurable at present and probably never
>> will be, and hence is not meaningfully finite.
>>   (2) Even if we unrealistically assume that the number of potential wells
>> in the earth might be surveyed completely and that we could arrive at a
>> reasonable estimate of the oil that might be obtained with present
>> technology (or even with technology that will be  developed in the next 100
>> years), we still would have to reckon the future possibilities  of shale oil
>> and tar sands - a difficult task.
>>   (3) But let us assume that we could reckon the oil potential of shale and
>> tar sands. We would then have to reckon the conversion of coal to oil. That,
>> too, might be done, but the measurement is becoming increasingly loose, and
>> hence less "finite" and "limited."
>>   (4) Then there is the oil that we might produce, not from fossils, but
>> from new crops - palm oil, soybean oil, and so on. Clearly, there is no
>> meaningful limit to this source  except the sun's energy (land and water are
>> not limits - see chapters 6 and 10).  The  notion of finiteness is making
>> ever less sense as we proceed.
>>   (5) If we allow for the substitution of nuclear and solar power for oil -
>> and this  makes sense because what we really want are the services of oil
>> and not oil itself - the notion of a limit is even less meaningful.
>>   (6) Of course the sun may eventually run down. But even if our sun were
>> not as vast as it is, there may well be other suns elsewhere.
>>   The joke at the head of chapter 3 makes the point that whether there is
>> an "ultimate" end to all this - that is, whether the energy supply really is
>> "finite" after the sun and  all the other planets have been exhausted - is a
>> question so hypothetical that it should be compared with other metaphysical
>> entertainments such as calculating the number of angels that can dance on
>> the head of a pin. As long as we continue to draw energy from the sun, any
>> conclusion about whether energy is "ultimately finite" or not has no bearing
>> upon present policy decisions.
>> """
>>
>> I think Julian Simon's philosophy goes wrong in issues like natural
>> biodiversity (until we gene-engineer new animals), social equity (until we
>> have a basic income), and the systemic risk of global war (an external cost
>> of war being profitable, which it is hard to eliminate until we move beyond
>> the market entirely to local production and a peer-based gift economy). But
>> the core idea of the market *eventually* adjusting to scarcity by changing
>> pricing structure and investing in alternatives seems sound, absent special
>> interests or government backed monopolies. From Brittle Power:
>>  http://en.wikipedia.org/wiki/Brittle_Power
>> "Brittle Power: Energy Strategy for National Security is a 1982 book by
>> Amory B. Lovins and L. Hunter Lovins, prepared originally as a Pentagon
>> study, and re-released in 2001 following the September 11 attacks. The book
>> argues that domestic energy infrastructure is very vulnerable to disruption,
>> by accident or malice, often even more so than imported oil. According to
>> the authors, a resilient energy system is feasible, costs less, works
>> better, is favoured in the market, but is rejected by U.S. policy. In the
>> preface to the 2001 edition, Lovins explains that these themes are still
>> very current."
>>
>> So, the production of better solar panels and wind power and alternatives
>> is just proof of Julian Simon's point. The market is planning for and
>> adjusting to an increasing physical scarcity of oil, which will ultimately
>> make fossil oil fairly very cheap (but no one will want it, because it will
>> be dirty, unhealthy, unaesthetic, immoral, etc. same as lighting homes with
>> whale oil lamps instead of electric light bulbs these days). Granted, the
>> market has to have a credible alternative to switch to, but solar and wind
>> and other things are very credible at this point, so the switch will happen
>> and is happening.
>>
>> Now, often the government supports the centralized technology for political
>> reasons (like special interests):
>>  http://www.runet.edu/~wkovarik/misc/blog/8.whaleoil.html
>> "In 1860, the government determined which technology was best. The oil
>> industry was the favorite, and in effect, it was born with the competition
>> swept neatly away and the silver spoon of subsidy (or tax advantage) lodged
>> firmly in its teeth."
>>
>> It has been hard for renewables to fight against all the government
>> subsidies to the fossil fuel and nuclear interests. But they seem finally to
>> be winning in the market, despite a playing field heavily tilted to fossil
>> fuels and nuclear energy.
>>
>> By the way, some people think much oil comes from cosmic processes, not
>> dinosaurs. Hydrocarbons are common in other parts of the solar system. So,
>> there are both lots of them around (though hard to get at, and pointless to
>> bring back to Earth, although using them in place may be a good idea). But,
>> like the stone age did not end because we ran out of stones, we now have the
>> solar electric option, like from Nanosolar, which will soon (two decades?)
>> mean fossil oil is no longer used much, same as whale oil is no longer used
>> much, and wood heat is no longer used much for industrial processes (some
>> heat homes with wood still, of course).
>>
>> Anyway, I'd appreciate it if you could be specific about what you object to
>> either above or in that chapter.
>>
>> --Paul Fernhout
>> http://www.pdfernhout.net/
>>
>>
>>
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