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170 comments on 4%, 11%, Who the Hell Cares?

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Stuart Staniford on September 6, 2005 - 11:55am Permalink | Subthread | Parent | Comments top
You are right that I neglected to analyze the degree of warning carefully. My view is that, as long as the current lack of transparency into reserves holds, there won't be lots of warning. People only pay any attention to peak oil (and resource constraints in general) when prices are high (as in the 70s, which concern dissipated through the 80s and 90s, and now). Current prices are pretty much constrained to be not much lower than the future prices (via storage arbitrage). Historically, future markets have had extremely limited ability to correctly predict future oil prices (unsurprising given the lack of transparency into most sources of supply). Not only that, it's human nature to only respond to things after they've happened (no-one took very seriously that terrorists could fly planes into buildings or that New Orleans could flood until after those things had happened). If we are near peak now, we are starting to respond. If it turns out we are not, and there's some big new supply somewhere, we'll all go back to sleep until we are near peak (as we did in the 80s/90s).

Overall, I sort of assumed the warning of the decline rate is enough to set in place those 2x improvements in transportation efficiency, but not more. If we were to start constant decline next year, we obviously would not achieve 2x for some years because manufacturors would need to design new models (except Toyota and Honda), and rejig factories (in all cases).

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Rick on September 6, 2005 - 3:44pm Permalink | Subthread | Parent | Comments top
Great post.

I'm also very dubious about whether effective warning signals will actually occur. The classic economic assumption that markets receive perfect information, including warnings, can't possibly be correct under these circumstances because:

  1. We don't have good information on production and reserves now.

  2. We will not have good information on the timing of the peak: it can only be verified some time (2 years?) after the fact.

  3. Oil companies, as we've seen already, are unlikely to tell their investors that they are in a long-term decline.

  4. Governments aren't talking either. The Jimmy Carter experiment in telling the truth about oil was intellectually and ethically correct, and politically disastrous. It won't be repeated anytime soon.

This means that the warnings will come primarily from third party commentators in the peak oil community. This group has brains and passion. Unfortunately, we have no significant communication budgets. And we compete for credibility with a shadow--"they," as in "They who will find a solution."

We need to keep getting the message out, but most are not ready to really take it on board. So the warnings will be weak.  

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Washutoo on January 21, 2006 - 1:46am Permalink | Subthread | Parent | Comments top
What I find interesting is that over 50% of European cars are diesels and the ave mpg is about doble the US fleet. The trend is in place already. Almost all European manufacturers make diesels now, so the technology could be shifted over here quickly. I also think the service stations could be switched over pretty quickly, so it boils down to refinery retools or new builds to convert coal to diesel. I see a lot of new capacity coming on in Qatar, Iran, Nigeria, Australia, Algeria, Turkman/Russia, Trinidad. Ramping up battery manufacturing, lead mines alone tells you that hybrids could hit a wall quickly.
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170 comments on 4%, 11%, Who the Hell Cares?

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