Freakonomics: Read this if you believe in Peak Oil | Hacker News Reader

Freakonomics: Read this if you believe in Peak Oil

freakonomics.blogs.nytimes.com

6 pointscwan7 comments

related link: http://www.nytimes.com/2009/08/25/opinion/25lynch.html?_r=1

This is so familiar. Smart economists tell us that something which seems so unsustainable is in fact sustainable. Remember when we heard that home prices had never declined on a year over year basis and that the extreme price appreciation from 2000-2005 was somehow rational? This argument feels exactly the same.

There are only two possibilities here:

1. The more oil we extract, the less oil is left in the ground

2. The oil supply is infinite

I know which my money's on...

I'd amend #2 to say that the supply of oil is effectively infinite as a result of substitutes. We will never extract the last drop of oil because it will be too expensive to do - and as it gets more expensive, the incentives for alternatives rises (as has been the case for every form of historical fuel source - it's probably a good thing for us and whales that we don't depend on whale blubber for light anymore).

I agree, but that doesn't really refute the possible gloom-and-doom scenarios proffered by the Peak Oil crowd. Whether or not we slowly wean off oil or experience a chaotic shift depends on the particulars of just how expensive it becomes to extract more oil over time, and how much global demand rises. I believe in the power of the market as much as anyone, but it's not a given that the market will find a cheap, easy alternative to fossil fuels within the timeframe that we may need them.

We already have (though it is a fossil fuel) - natural gas (http://paul.kedrosky.com/archives/2009/08/the_grand_energ.ht...) - the equivalent of between 80-120 years of equivalent oil consumption (if we switched everything including consumer vehicles over). Conversion of existing vehicles while not cheap, is still viable and not difficult.

Actually, there's at least one more possibility, namely "extractable oil is created at some non-0 rate".

I was hoping to find an intelligent rebuttal of Peak Oil, but it reads more like a hatchet job than anything else.

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