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201 comments on DrumBeat: September 2, 2008

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PaulusP on September 2, 2008 - 9:30am Permalink | Subthread | Parent | Comments top

"the switch to certain alternatives may weaken as people belief in peak oil get shaken."

Nawar, I'm not sure if I understand you correctly, but PO is not a belief. If you believe it you must understand the simple basic concept. The price will not shake that understanding.

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Nawaralsaadi on September 2, 2008 - 9:43am Permalink | Subthread | Parent | Comments top

Paul, indeed PO is not a belief, it is a basic concept, and I do understand it as such, however such severe declines, may push certain believers to consider that PO is not as big of a deal as it may seem, some may start believing that solar and wind are doing their trick, while forgetting that our issue is liquid energy, and not energy per say.

As you know a lot of people and investors have a blind faith in the ability of markets to predict the future (didn’t the CIA wanted to start a terror futures contract after Sept. 11?), if prices continue heading lower, they will rather believe the markets rather then believe the simple fact beyond PO.

Regards,
Nawar

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eric blair on September 2, 2008 - 9:55am Permalink | Subthread | Parent | Comments top

while forgetting that our issue is liquid energy,

And I'll say that this view is wrong. The issue is the economic model built on CHEAP oil. (Cheap VS the other forms)

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PaulusP on September 2, 2008 - 10:27am Permalink | Subthread | Parent | Comments top

I would like to refine that to an economic model built on endless growth.

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Soylent on September 2, 2008 - 7:47pm Permalink | Subthread | Parent | Comments top

And I'll say that this view is wrong. The issue is the economic model built on CHEAP oil. (Cheap VS the other forms)

Oil just isn't a cheap form of energy. For your dollar you could get ~8 times as many BTUs from coal, 1.5-2 times as many BTUs from natural gas, ~100 times as many BTUs from yellowcake(with ~10 000 as many BTUs potentially extractable); I haven't done the calculations for wind and solar, but they're definetly far cheaper still.

The reason people keep buying so much oil at such a high cost is that it's easy to store, easy to transport, low capital cost of the equipment required to use it, burns relatively cleanly, high energy density.

The cheapest forms of energy are exactly the most costly and cumbersome ones to use; otherwise demand would drive their price up.

You can see for instance how this plays out for a vehicle. Natural gas is hard to store and it costs a lot of energy to compress it for use in a vehicle; but it's still fairly straight forward to power a vehicle with it. Coal would fail the emissions standards of every single country that has one and you'd kill an awful lot of people; you have to build the infrastructure to turn it into something like oil(e.g. see SASOL and the fisher-tropsch process) and you're likely to be required to deal with all that CO2 instead of just venting it to the atmosphere. Nuclear is only practical for powering electric trains, street cars and other grid tied vehicles and renewables can't even do that(not without back-up generation or enormous grid storage capacity).

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DaveMart on September 3, 2008 - 6:19am Permalink | Subthread | Parent | Comments top

That is a good summary of the current state of play.
What it omits is that very shortly it will be practical to power most vehicles with electricity and batteries.
It will not be so convenient as oil, but for all personal transport uses works just fine.

Delivery vehicles can also run on electric, but long-distance trucks are impractical, and trains would be needed.
Agricultural equipment etc also will need oil or biofuel for the foreseeable future.

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Consumer on September 2, 2008 - 9:53am Permalink | Subthread | Parent | Comments top

PO is absolutely a belief. Whether something is true or not has nothing to do with how many people believe in it. As the price drops, fewer people will believe in PO, and will put less pressure on TPTB to do anything about it, and will want to continue the party.

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xeroid on September 2, 2008 - 4:43pm Permalink | Subthread | Parent | Comments top

The price just balances supply with demand at a particular time, the price says absolutely nothing anout the actual volume of oil being supplied/demanded.

Peak oil is about volumes supplied on a daily basis and has very little to do with reserves.

Peak oil isn't a belief it's a fact, for oil wells, for oil fields, for the USA, for the UK, for lots of countries ... and maybe for the whole world in total ... you need to check the data, moving averaged over a few years, to be sure ... monthly data is too inaccurate to be useful.

If you do check the data I think you will find C+C 'net exports' have actually peaked around 3 years ago - it is the 'net exports' that are important to importers.

Today I expect the demand for oil from refinerys has gone down in the area around NOLA at least, so today I would expect the price of crude to fall if there weren't other effects!

Each country will have it's own peak oil experiences - for some it won't matter much for a few years, for others it will be a rapid catastrophe.

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RSFB on September 2, 2008 - 4:51pm Permalink | Subthread | Parent | Comments top

I don't know how someone can make that statement here, but... PO is not a belief, it's a fact.

Any finite resource has to have a peak in production. If there's no peak, it means the resource is in fact infinite, obviously not the case with oil.

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enemy of state on September 2, 2008 - 6:52pm Permalink | Subthread | Parent | Comments top

PO is not a belief, it's a fact.

I believe it is useful to consider two realities. The first, and familiar one is the actual physical state of the universe (or some portion thereof), the second one is the collective mental landscape of the people (or the people empowered to make decisions). The second reality need not conform to the first. Politics is the realm of the second reality. Physics and geology exist in the first realm. Economics is somewhere in between. At least for a while a collectively held falsehood can control the market.

Needless to say, the farther apart the two realities, the greater the risk of a catastrophic event.

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sgage on September 2, 2008 - 7:08pm Permalink | Subthread | Parent | Comments top

There is but one reality. The first that you mention above.

The collective mental landscape of the people is not a second reality, it is a delusion, and it is not helpful to associate the word "reality" with it in any way. It is a house of mirrors, wishful thinking, evasion.

Words matter.

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enemy of state on September 2, 2008 - 7:18pm Permalink | Subthread | Parent | Comments top

Whether or not we should refer to the mental landscape as a reality, or some other term, it is a useful mental concept. A large part of human endeavor is involved with the intended manipulation of this second state. Without a favorable perception by enough people, beneficial actions are precluded.

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sgage on September 2, 2008 - 7:37pm Permalink | Subthread | Parent | Comments top

It is a very useful concept! It's just that attaching the word "reality" to it is a bit obfuscatory. At least let's distinguish between actual reality and virtual reality.

E.g., if you jump off a cliff, you die in a big splat at the bottom, no matter what you or anyone else believes. That's actual reality.

The maddening thing is that if you show any real interest in studying actual reality, you will soon be told that you're trying to "escape reality".

That's why I think words matter.

:-)

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Chriszenji on September 2, 2008 - 11:04pm Permalink | Subthread | Parent | Comments top

Sgage, you could have stopped with your first sentence. You reintroduce another duality by talking about "the collective mental landscape". We only have our one "delusion", and it is exactly the one physical reality, permeating all things.

Chris

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aangel on September 2, 2008 - 11:46pm Permalink | Subthread | Parent | Comments top

We only have our one "delusion", and it is exactly the one physical reality, permeating all things.

Perhaps.

I find it useful to distinguish the personal reality, the agreement reality (the reality shared by others) and the final or ultimate reality, which is what you would call "physical reality."

To see ultimate or physical reality clearly, one has to distinguish the personal reality and the agreement reality and then throw them away. What's left is physical reality.

For instance, I can look at the corridor between two walls and think "that's really wide" -- that's the personal reality getting its say.

Then I can say, "the corridor is 3 meters wide." That's the agreement reality (since units of measure are just an agreement).

Take away both realities and what's left is physical reality.

You just wouldn't have any way to talk about it :-).

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201 comments on DrumBeat: September 2, 2008

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