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Comment by codingslave | Hacker News Reader

Let the peak oil hysteria from the 80s and 90s be a reminder to everyone here how fallible common beliefs are among the population.

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Peak oil theory is sound economics. We now have sufficient proven and suspected reserves that we expect that demand will tail off before supply does, so we expect that we won't have a supply crunch. But it could have possibly gone that way if the Earth had fewer extractable reserves or if humans had been less innovative in finding new methods of extraction. It really just comes down to whether demand or supply tails off first.

Okay, well it would still be nice if we could tell ahead of time which pronouncements of "sound economics" are valid and which are total bunk. Even at the time that Peakists and oil investors (were these really different groups?) were most noisome, lots of more sober people could see the bunk.

It's basic supply and demand, which is microencomics, formally known as the non-bunk part of economics. Macroeconomics is where the bunk lives, so it's quite easy to tell - only slightly joking.

I don't think anyone on either side really knew with oil how things would go. Hindsight is 20-20, and one of the two camps was going to win with 100% certainty. It's not fully decided yet mind you, peak oil could still happen if people keep increasing demand for it instead of weaning away from fossil fuels. But I don't think that scenario is likely at all.

I don't recall any of the original Peakist manifestos including your very reasonable caveats about hindsight and uncertainty?

Really though, this is why I sort of stopped worrying about peak oil about a day after I was first exposed to the idea. It was a very absolutist disastrous sea-change phase-transition sort of scenario, and those are relatively rare in real life. (Well, at some level they are very common: everyone is conceived at some time and dies at another. These details disappear in aggregate.) It's much more common for equilibria that have been stable over decades to continue that stability, even if at slightly different locations. Lots of things are more expensive in our modern times than they used to be; somehow society has survived.

It became a moot argument due to the rise of renewable energy and concern about global climate change. I really doubt that is going to change for many decades.

> we expect that demand will tail off before supply does

While I agree with your "sound economics" conclusion, I think that tapering demand was not part of the "peak oil" modeling.

The underlying assumptions involve no particular shift to the oil demand curve, whereas with improvements to other energy technologies (renewable energy, but also natural gas) we find that oil demanded per unit output at a fixed oil price appears to decrease with time. (The covid-related demand shock is of course not helping to bolster this curve.)

> Peak oil theory is sound economics.

Why is oil special? Why not peak iron, aluminum, concrete, NaCl, or any or the myriad other things we consume? All of them are in finite quantities, not only oil. Earth has a finite mass after all.

Haha, ISTR something on HN within the last year about "peak sand"[0]. All physical substances are vulnerable to this silliness: we're nowhere near "peak peak".

[0] https://news.ycombinator.com/item?id=20363875

Iron, aluminum, and salt are extremely common and very much renewable. Concrete is looking like it might be sand limited, and of limited renewability; there's already concern over our long-term ability to make concrete. Oil, on the other hand, we literally burn & convert into C02, and other fun stuff. Once we use it, it's pretty much gone.

> Once we use it, it's pretty much gone.

Oil is as renewable as any other renewable resource. It's made from plants.

We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil.

It's an open question whether our access to cheap fossil fuel will outlast our demand for it.

> We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil.

A: Our business is running out of money we can no longer get any loans at any interest rate.

B: False. You're not running out of money or access to loans. You can still get loans as long as you're willing to put down more collateral in cash upfront than the amount you're borrowing.

I think see why you used a throwaway for this insight.

You're mistakenly assuming that our only use for oil is energy production.

Oil has many uses besides as an energy source. Even in transportation, oil is still useful as an energy transfer system even if it isn't an energy source.

Net-loss energy systems are very useful. Fuel cells and batteries fall into this category. The latter has already begun to function as a replacement good for oil in the automotive industry.

While yes we can use oil for other purposes, the vast majority of use of oil is for net positive energy use. If oil were net negative the majority of it's demand would disappear.

Well sure, because it's cheap and available! The point here is that when price points change replacement good emerge causing us to never actually run out of the good in question.

This process of substitution is a cornerstone of cornucopian theory, as described by the famous Simon-Ehrlich wager.

It's not clear demand would evaporate, by the way. Right now we produce oil at a variety of price points - from cheap light crude at a few dollars per bbl to shale oil at ranges from $30-90/bbl. Most folks expect electric cars to undercut oil at higher price points. It's certainly possible we might some day develop technology to obsolete even oil at light crude extraction prices. But it's also possible that we would opt to produce petrol products in a net-negative energy process because petrol is just so damned convenient for energy transportation.

In a sense we already have, as Fischer-Tropsch can produce at around $40/bbl. We see it used today in special cases such as on aircraft carriers to work around logistical complexity. Producing jet fuel from seawater is very handy, if costly in terms of energy consumption.

Oil and oil products are very much renewable. The price points relative to substitution tech will change over time and some day we likely will decide that oil just isn't attractive anymore. Above, I suggested this might happen before we run out of light sweet crude (mostly from Saudi).

I think this is a very reasonable thing to wonder.

Those plants require petroleum-based fertilizers to produce at industrial scale.

No, they do not.

We use fossil fuels in fertilizer production because it is cheap. It is not the only alternative, nor are fertilizers required to operate at scale in the first place. Fertilizer increases yield but has nothing to do with our ability to scale an operation.

Yes, the problem is the energy that could be used to produce oil would be much more efficiently used by applying it directly to what the oil was going to be used for.

Not always. Oil has many uses outside of energy production.

It's also important to distinguish between energy production and energy transfer. Petrol products are very useful for energy transfer even if they aren't energy producing.

Batteries and fuel cells are other examples of useful net-negative energy transfer systems.

We can make sand (and do so) by crushing rock. So concrete is renewable too in that sense, or at least not sand limited, but the cost would likely go up.

Go to the wikipedia page for any of the elements. Look up what percentage of the earth's crust is that element. Multiply by 2.77x10^22 kg.

You can't re-use oil products that have been combusted.

Because after we use iron, aluminum, and NaCl, they are still iron, aluminum, and NaCl. our using them doesn't prevent future generations from using them.

Peak concrete is also sound economics, it just gets less air time because there are more alternatives and fewer affected industries.

No. There is enough oil on the planet for another 500 years. There is no shortage.

>There is enough oil on the planet for another 500 years

Math please?

And remember when people talk about peak oil, they mean oil that is cheap enough to be of economic use.

This statement of yours shows a deep misunderstanding of the relationship between price and availability as it pertains to oil: less availability only implies higher price in a very local way and for very short time spans. Oil is too vital to the global economy, it's not competing against any other energy source at its scale and mode of usage, and it's availability conditions enough of all economic activity, that availability conditions affordability for all economic actors. There is therefore no correlation between availability (production volumes) and prices for oil.

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