Another energy insider takes peak oil seriously:
Oil is going to US$300 a barrel, peak oil coming soon
Charles Maxwell, a former energy exec who is now an analyst at Weeden & Co., says “peak oil” will drive oil prices to US$300 a barrel over the next decade.
Alternative energy won’t save us, he says: It’s just too small a percentage of the overall energy market to matter. And neither will natural gas, coal, and other fossil fuels, which come with their own problems.
What will save us — because we’ll be forced to do it — is conservation: We’ll find ways to do more with less. We’ll also have to start eating root vegetables in the winter, because it will be too expensive to fly in plane-loads of vegetables from Chile.
Olivier Ludwig of IndexUniverse has a good interview with Maxwell here.
It’s going to play havoc with the economy as society adjusts to the new reality – but making oil expensive is the only way to wean ourselves off it and make some real progress on all the problems it causes. I’m not exactly looking forward to it, but I think it has to happen.
The perspective that the writer takes is indicative of the whole problem. Why is eating root vegetables in winter “less”?
Why do people “expect” strawberries in winter?
We just saw what happened when oil briefly hit $150 US/barrel – does anyone really think it can go to $300? We’ll have a recession (which will destroy demand for oil and reduce the price) well before that happens.
“We’ll also have to start eating root vegetables in the winter, because it will be too expensive to fly in plane-loads of vegetables from Chile.”
Correction, the wealthy will continue to eat whatever they feel like, the poor will continue to eat cheap high-simple carb diets.
“does anyone really think it can go to $300? We’ll have a recession (which will destroy demand for oil and reduce the price)”
That may very well happen, but it won’t last. Eventually we’ll need to push through that barrier. It’s not in our nature to roll over and die because oil is expensive. As the author suggests, conservation will help ease the transition. Next this will lead to innovation, and away we go again. Or we can take the doom and gloom route.
The planet is loaded with substitute goods. Right now the reason hybrid vehicles are very small part of the market in the US is that what you save over the lifetime of the vehicle in fuel costs is not made up in the additional expense for buying the vehicle with the hybrid option. But if the price of oil goes up, than we will see a lot more people shifting to hybrids and plug in hybrid vehicles because a certain point is really will be cheaper to buy a hybrid than to not buy a hybrid. Second there are fuel sources other than oil. While the planet may be using up the cheaply extracted oil, there are plenty of places that have access to oil shale deposits like Canada or the mountain west regions of the US. If the prices of oil goes up, we will develop them. The planet also has ready access to much cheaper power sources like coal and natural gas which can be used to power hybrids, homes and industry.
Concern about climate change is a luxury good. All of the countries with low incomes like China, India and Brazil are a lot more interested in increasing energy usage with the cheapest power available (coal) to rapidly raise living standards rather than worrying about preservation of polar bears in the arctic . If a shortage in oil becomes so acute to materially lower incomes in western countries, the primary causality will be continued support for climate change legislation.
Already as the economy has gotten worse in the US and Eastern Europe the tepid political support of climate change legislation has evaporated.
http://www.voxeu.org/index.php?q=node/5423
Mike, like you I don’t believe in the devastating effect of peak oil. There is simply too much of it lef, look at today’s consumption, and too many great possibilities to reduce it without significant consequence on lifestyle. Unless you think driving a smaller fuel efficient car is a big deal compare to go around in a gaz guzler. Not in my book.
I’m curently building a house that I will literaly be able to keep warm with my farts, for a few thousands dollars in extra materials. But the comments I get is not about the cost but the lost ps 6″ of space for the extra insulation. Again not a big lifestyle change in the big picture.
Some great comments from Ultraman, Tom, Mike, Declan.
Vancouverism needs a host of supporting secular religions, and Peak Oil is one of the hottest. Just ask the Georgia Straight or one of the Deputy Planners for one of the region’s biggest municipalities.
A recent FA article stated that over the next five or so years, moderate oil prices are indicated. And you would have thought that by now, post-2008 crash, that blind faith in the prices established in financial and commodity markets would be a relic of the past. Not all speculation is rational, after all.
But again, saying that kind of thing in the middle of the Vancouver real estate market is looked upon by most home and apartment owners in the region the same way members of the BC Liberal Cabinet look on the statements made by their former colleague Bill Bennett. Accuracy is not the issue. Survival and strategy are.