Julian Simon's Ghost Haunting Peak Oil
Peak Oilers love to say that "there just aren't any big finds left out there." The logical conclusion then is that oil production will decline. Well, you can't produce oil if you don't look for oil. Exploration has been declining for decades, so why should we not expect declining production? If we actually looked for oil and did so aggressively on a sustained basis, we wouldn't be facing declining production. Technology plays a huge role. The state of the art allows us to look only so many places and only so deep into the earth. Peak Oilers may have a point about our steady state existence, akin to saying we are pedaling as fast as we can on the bicycle. But what if somebody invents a motorcycle? The critical flaw in the Peak Oil theory is that it doesn't account for getting off the bicycle and mounting the motorcycle. As the state of the art in exploration and extraction technology advances, we can drill in more places and look deeper into the earth. If we've previously been constrained at, say, 8000 feet, who's to say what moving that constraint to 20,000 feet will yield us? Maybe nothing or maybe previously unimaginable availability of resource. Very likely it will be somewhere in between.
Well, today comes news about that motorcycle and what it may mean for us. Chevron, Statoil, and Devon have tapped what looks like a monster reservoir at an astounding depth. The implications are enormous, and I'll leave it at that, but suffice to say that the Peak Oil theory has two strikes and human ingenuity seems to still be throwing 95 mph heaters.
Well, today comes news about that motorcycle and what it may mean for us. Chevron, Statoil, and Devon have tapped what looks like a monster reservoir at an astounding depth. The implications are enormous, and I'll leave it at that, but suffice to say that the Peak Oil theory has two strikes and human ingenuity seems to still be throwing 95 mph heaters.
posted by Donny Baseball at 10:55 AM
3 Comments:
Peak oil is irrelevent. I don't know why it is even an issue. Natural resource has never been, and will never be, an issue. The key to energy is incentive structure. If the incentive is there, we will never run out of energy.
Great call on inequality! Too bad there is no money attached to it. That is the ACE in the hold for Dems. The WSJ has not framed this debate correctly, I think. The editorial should have pointed out that given our current tax system, it is very difficult for the working class to get ahead by working hard, save and invest (this becomes apparent if one does the math). Therefore, the logical thing to do is to cut taxes, i.e., take less money away from people who have the least money to give.
A cold war on Iran would be a great policy. It's always the regime, not the people, nor religion. Take those crazy regimes out, we will have peace.
Yes indeed. If you were a rational Dem you'd advocate tax cuts on dividends and capital gains while maybe not on income. After all, not everyone can be a CEO, a big shot lawyer or a surgeon, but we can all buy shares of 3M, GE or Boeing. Right there is a big part of the income story that is open to all Americans! How awesomely egalitarian is that? But then again, it's not about building the little guy up is it?
PS Thanks for reading.
Ahh, Peak Oil theory incorporates technological advances in both exploration and drilling.
But, I'd expect you to try to ignore that, even were you aware of it.
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