Many Austrians Are Wrong About Peak Oil Theory

April 9th, 2012   Submitted by Seth King

Time and again I read Austrian School economists dissing Peak Oil Theory. They likely do this because they have not taken the time to fully understand the theory behind peak oil. Instead, they get caught up in the doom and gloom predictions made by many proponents of Peak Oil Theory and the erroneous calls for some sort of government intervention to alleviate the matter. The problem with this dismissive attitude, however, is that by not acknowledging the validity of Peak Oil Theory, the Austrians lose legitimacy in the eyes of a large percentage of the population, namely the environmental left.

In my younger days I, too, dismissed environmental concerns such as air pollution and overfishing, because in the back of my mind any acknowledgment of such would seemingly destroy the validity of the free-market. Only after having missed many opportunities with environmentalists did I finally discover a way to reconcile free-market economics with the environment. The same can be said for many Austrian economists who fail to acknowledge the validity of Peak Oil Theory.

One recent example of Peak Oil Theory denial is a piece written by David Deming and published by LewRockwell.com. To be sure, I am not familiar with David Deming or his economic background. My apologies to Austrians if David is not a student of our school. This attack on Peak Oil Theory, among other articles, having been published by LRC and Mises.org does demand a response from at least one student of the Austrian School and proponent of Peak Oil Theory. I will now go line by line of David’s article and pick apart his faulty logic.

Peak Oil is the theory that the production history of petroleum follows a symmetrical bell-shaped curve. Once the curve peaks, decline is inevitable.

True. For anyone who studies math, physics, or pretty much any other type of statistics or science, you’ll find that the nature of systems commonly take the form of a Gaussian(bell-curve). Although, it doesn’t have to necessarily be symmetrical.

The theory is commonly invoked to justify the development of alternative energy sources that are allegedly renewable and sustainable.

This is a loaded sentence. Whether or not the proponents of Peak Oil Theory advocate the use of renewable energy sources is moot. It has nothing to do with the validity of Peak Oil Theory. This is a smear attempt. Furthermore, he throws in the word “allegedly” as if solar, wind, and hydroelectric power are “allegedly” renewable. They are renewable. I don’t think there is any disputing that.

Peak Oil theory was originated by American geologist M. King Hubbert. In 1956 Hubbert predicted that US oil production would peak between 1965 and 1970. When production peaked in 1970, it was interpreted as proof that Hubbert’s model was correct and that US oil production had entered a period of inexorable and irreversible decline. Unanswered was the question of whether or not US production had declined simply because it had become cheaper to purchase imported oil.

True.

Peak Oil is a theory based upon assumptions.

False. The theory does not rest on any assumptions about future demand. Regardless of whether demand skyrockets or plummets, the rate of production is destined to decline at some point. It is not a matter of if, but when.

Like other scientific theories, it is subject to empirical corroboration or falsification. Although Hubbert correctly predicted the timing of peak US oil production, several of his other predictions based on Peak Oil theory were wrong.

He is being extremely deceptive here. First, he writes about theories and empirical evidence, which is fine. But then he writes about false predictions. Predictions and theories are two totally separate beasts and he is trying to attack the theory of Peak Oil by way of false predictions. Example: Everyone on Earth will die(theory). Tomorrow, everyone will die(prediction). Two days from now when it is proven that not everyone is dead, will the theory then be proven false? The answer is no. Poor example, but you get the point.

Hubbert predicted that the maximum possible US oil production by 2011 would be one billion barrels. But actual production in 2011 was two billion barrels. Hubbert predicted that annual world oil production would peak in the year 2000 at 12.5 billion barrels. It didn’t. World oil production in 2011 was 26.5 billion barrels and continues to increase. Hubbert was grossly wrong about natural gas production. In 1956 he predicted that by 2010 US annual gas production would be 4 TCF. But in 2010, US wells produced more than 26 TCF of gas.

Mere false predictions that add nothing of value to his claim that Peak Oil Theory is false.

The flaw of Peak Oil theory is that it assumes the amount of a resource is a static number determined solely by geological factors.

Is oil a static resource or is it not? If anyone can prove that oil is regenerated at a rate of any significance for human consumption then I will admit that Peak Oil Theory is wrong. But that hasn’t happened. By all accounts the reserves(including undiscovered) of oil within planet Earth are understood to be finite. This fact alone shoots dead his entire argument.

But the size of a exploitable resource also depends upon price and technology. These factors are very difficult to predict.

How much oil can be exploited has nothing to do with the finite amount of oil that exists in Earth. The amount of oil that is exploitable in the future may change one’s predictions when Peak Oil hits, but it does nothing to disprove the Theory of Peak Oil.

The US oil industry began in 1859 when Colonel Edwin Drake hired blacksmith Billy Smith to drill a 69-foot-deep well. Subsequent technological advances have opened up resources beyond the limits of our ancestors’ imaginations. We can drill offshore in water up to eight-thousand feet deep. We have enhanced recovery techniques, horizontal drilling, and four-dimensional seismic imaging. Oklahoma oilman Harold Hamm is turning North Dakota into Saudi Arabia by utilizing hydraulic fracturing technology. US oil production has reversed its forty-year long decline. By the year 2020, it is anticipated that the US will be the world’s top oil producer.

A nice history lesson that has nothing to do with disproving the Theory of Peak Oil.

For at least a hundred years, people have repeatedly warned that the world is running out of oil. In 1920, the US Geological Survey estimated that the world contained only 60 billion barrels of recoverable oil. But to date we have produced more than 1000 billion barrels and currently have more than 1500 billion barrels in reserve.

Again, these were predictions about what would be recoverable. The predicted amount that is recoverable has nothing to do with the amount of oil in existence.

World petroleum reserves are at an all-time high.

This is likely bullshit. I write “likely” because few people know for sure. There are only a handful of entities that have a true stock of global reserves. For example, there are many who believe that Saudi Arabia(the most productive OPEC nation by far) falsifies the true amount of reserves that they have. There is speculation that they overstate their reserves so as to intentionally keep the price of oil low. While one might think that Saudi Arabia would benefit from higher prices one must realize that the Saudi puppet King is beholden to the U.S. And the U.S. Federal Government does not want skyrocketing oil prices. There are also many other political considerations concerning the amount any OPEC nation may produce relative to others. In other words, politics are likely hiding the true quantity of global reserves. Even if petroleum reserves are at an all-time high it says nothing about the future of reserves. It is false logic. Example: Home prices are at an all-time high. We have nothing to worry about. Crash!

The world is awash in a glut of oil.

Bullshit. Even by official reports the amount of oil that has ever been discovered in Earth is equivalent to three Lake Tahoes. And half of that has already been consumed. I would not call that awash. Would you?

Conventional oil resources are currently estimated to be in the neighborhood of ten trillion barrels.

Deception. Notice he uses the word resources here. There is a huge difference between sweet crude oil and oil shale, for example. Sweet crude can be easily extracted and yields a very high EROEI. Oil shale on the other hand is extremely difficult to extract. The amount of energy required to extract and produce usable oil from shale is relatively low to other forms of oil.

The resource base is growing faster than production can deplete it.

The resource base has not been growing at all. Oil is finite for all intents and purposes.

In addition to conventional oil, the US has huge amounts of unconventional oil resources that remain untouched. The western US alone has 2000 billion barrels of oil in the form of oil shales.

And we’ll be lucky to net 200 billion of that.

At a current consumption rate of 7 billion barrels a year, that’s a 286-year supply.

If we are lucky to net 200 billion barrels of oil it would mean a thirty year supply for the United States. This is also assuming the current consumption rate remains stagnant. I will admit, however, that in this regard one could count this as increased oil production. But it does not take into account the amount of oil necessary to extract oil shale. The net aggregate of produced oil will, at some point, decline.

Nine years ago, I predicted that “the age of petroleum has only just begun.” I was right. The Peak Oil theorists, the malthusians, and the environmentalists were all wrong. They have been proven wrong, over and over again, for decades. A tabulation of every failed prediction of resource exhaustion would fill a library.

Notice how he throws the Malthusians in with Peak Oil theorists? It is clear to me that there is a very large difference between food production(renewable) and oil production(non-renewable).

Sustainability is a chimera. No energy source has been, or ever will be, sustainable. In the eleventh century, Europeans anticipated the industrial revolution by transforming their society from dependence on human and animal power to water power. In the eighteenth century, water power was superseded by steam engines fired by burning wood. Coal replaced wood, and oil and gas have now largely supplanted coal.

Sustainability is a chimera? And this gets a pass from the Austrian School economists? Krugman would be proud! Not only does this line of thinking promote high-time preference but I find it laughable that he could write that “no energy source has been, or ever will be, sustainable.” Unless he wishes to employ the strawman argument, I think it’s safe to say that solar energy is a reasonably sustainable resource.

In the far distant future we will probably utilize some type of nuclear power. But for at least the next hundred years, oil will remain our primary energy source because it is abundant, inexpensive, and reliable.

This is another prediction which has no bearing on the legitimacy of Peak Oil Theory. And as far as his prediction is concerned, if oil is our primary fuel for the next century it will not be because of its excellence as a resource, but because humanity is still burdened by the regressive beast called The State.

Petroleum is the lifeblood of our industrial economy. The US economy will remain stagnant and depressed until we begin to aggressively develop our native energy resources. As Harold Hamm has said, “we can do this.” What’s stopping us is not geology, but ignorance and bad public policy.

Finally, something I can agree with!

To conclude, Peak Oil Theory is real. Many libertarian types are guilty of attacking predictions made by proponents of Peak Oil Theory instead of the theory itself. While I’m all for attacking predictions made by Peak Oil Theorists and their naive(or sinister) calls for government intervention, the refusal to acknowledge the theory of Peak Oil automatically disqualifies libertarians from the discussion table. A strong case can be made that much of what governs United States foreign policy and global finance is a result of Peak Oil Theory. It behooves libertarians to study Peak Oil Theory in earnest and steer the conversation towards free-market problem solving instead of turning a blind eye to the theory altogether.

39 Responses to “Many Austrians Are Wrong About Peak Oil Theory”

  1. helioNo Gravatar says:

    Thanks, Seth.

    By pointing out that David never once offered any counter argument to the theory and instead attacked the predictions, you shown me that I had been guilty of doing the same thing. Instead of attacking the theory, I will instead focus on how the peaceful market can solve the energy problem better than state violence.

  2. Gary GibsonNo Gravatar says:

    Nice one, Seth! Something tells me this article and its link will find its way onto various free market, agorist sites. I just get that feeling…

  3. Steve in HungaryNo Gravatar says:

    Thank you Seth!

    You saved me the bother of writing something similar. I was going to mention in relation to “Sustainability is a chimera.” that the North American Indians managed sustainability quite well for quite a number of centuries before the Pilgrim Fathers f****d it all up.

    Regards,
    Steve

    • Bob RobertsonNo Gravatar says:

      Yes indeed, neolithic hunter-gathering is sustainable, so long as you are fine with population die-offs whenever things go badly.

      Given that same criteria, human population now is “sustainable” since, when this or that resource becomes too difficult to harvest, there will be a die-off of excess population until equilibrium is again achieved.

      I’m not going to assert that what we have today is the end-all be-all of civilization that must be preserved at all costs. And cost is the single most important factor. Oil will, at some point, be more costly than its alternatives, just as happens with every other material resource. When’s the last time you wrote on Vellum? Or Parchment?

      • Steve in HungaryNo Gravatar says:

        Bob, not yet but working on it. Not vellum – I don’t raise calves. But I have a young wether goat destined for food. I might well try a parchment experiment. I have quills aplenty and I have soot and the dye from walnut husks that does not wash off.

        Maybe if I can master this my writings will far outlive my random posts to the Internet.

        The skin from my big buck goat is destined to be an outer garment for me. I am not a young man but I live in a sustainable community if TSHTF. I agree with you about die off. That is why I am here.

        • Bob RobertsonNo Gravatar says:

          I know a bunch of Medieval Recreationists who would be very interested in your efforts. Best of luck.

          • Steve in HungaryNo Gravatar says:

            Thanks Bob! I only just recently found this forum but I find intelligent discussion here. The locals, friendly and helpful, are baffled with my passion for everything being done by hand.

  4. We may someday run into the problem of not being able to acquire more oil as production costs outstrip what the oil is worth, but I think that time frame is too far into the future to worry about.

    But even if we run into this problem sooner rather than later, there isn’t really anything anyone can do about it. Assuming markets are free to find a solution, we will probably turn to hemp as a fuel source.

    When oil gets expensive enough, it will force the hand of the criminal state to make legal the next best alternative. For all we know, hemp might even be superior as an energy source given our present technology.

    • Bob RobertsonNo Gravatar says:

      “force the hand of the criminal state”

      I’m not going to risk my life and the lives of my children that, somehow, the state will ever be “forced” to capitulate to reality.

      Demolish it now, before disaster strikes.

  5. Skyler DachéNo Gravatar says:

    Great article.

    I think a good way to frame the issue of non-renewable resources is like this: Suppose a group of European settlers travel by ship to the new world, with no native Americans in sight for miles, they have to set up camp and survive. Now suppose they have on their ship nothing. No food, no water, no tools, nothing. When they land, they will have to immediately start hunting and scavenging. Many of them will starve. Growth will be slow for a while. It wiil take time to develop the resources they need to sustain themselves.

    Now suppose they land with another ship, full of modern canned food, hammers, nails, building materials, power tools and farming equipment with seeds. Will they be in trouble? No, they can use their temporary (unsustainable) resources to develop farms, buildings, and other production before they have the means to make enough food for themselves. This arrangement is highly unsustainable, but it allows them to quickly develop productive and ultimately sustainable infrastructure because of the temporary resources they were given.

    All fossil fuels work the same way. They are unsustainable, but that doesn’t have to be a bad thing. One way or another, we will get energy from the sun. Weather it comes through inefficient silicon photovoltaics or through advanced, cheap biofuels, no one knows, but we will make energy when fossil fuels run out. That is, if markets are free.

  6. Steve PNo Gravatar says:

    “Peak Oil” seems valid in the same way as “Peak Coal” and “Peak Whale-Oil”.

  7. Steve in HungaryNo Gravatar says:

    Where are the whales, Steve P?? Japan is intent on hunting the rest of them to extinction! Do you find it acceptable that your children/grandchildren could never – ever – go out on a boat trip just to watch whales?

    Where did the anthracite steam coal go, Steve P? What are they digging up now? Inferior grades at an ever increasing cost to the environment.

    Peak Oil? You obviously never looked at the countries with HUGE oil fields that are now in terminal and irreversible decline. Shale oil – forget it. Thousands of wells that deplete by 85% in the first year. Oil shale – well that is not even oil. Kerogen. Canadian tar sands? The biggest environmental disaster to ever hit the planet.

    Unless you start to realise that this is happening you are destined to take part in the great die off already mentioned on this thread.

    Long life and happiness!

  8. AlexNo Gravatar says:

    Intriguing piece. You’re certainly right to say that most free-marketeers avoid Peak Oil promoters because of the prevalence of Doom and Gloom scenarios. Instead of just recognizing Peak Theory as applicable to any finite resource, they talk about it like the it’ll be the apocalypse.

    The original article is absurd. As a lewrockwell reader, I’m disappointed that it was published there and thank you for the refutation. It picks a fight, where none is needed. That said, timing peak oil is a matter best left to market speculators, not economists. All we need to know is that, someday, oil scarcity will drive the price up to parity with alternatives (renewable or not). The market will transition to alternatives as it sees fit. This scarcity need not come from the true exhaustion of supply, however. Inconsistent or low quality supply would work equally well, as would a drop in alternative fuel prices.

    As to why Austrians might deny Peak Oil, I can only speculate. Any economist who fails to grasp that a finite resource will have a peak supply point needs to retake Common Sense 101. But as economists are generally tasked with determining why markets act as they do, and the data show that the markets have not reacted to Peak Oil (primarily because production continues to increase), then they may argue that Peak Oil Theory can safely be ignored unless and until its truths affect the market. Economists also don’t talk about Peak Gold, Peak Bauxite, or Peak Bismuth. All undeniably exist, but are not a driving factor in Gold, Aluminum, or Pepto-Bismol markets. Current production, near-term reserves, and, of course, demand are all that matter to the market.

    From an environmental stand-point, it seems that environmentalists should be excited by the prospect of Peak Oil. After all, there’s only so much oil we can burn. The faster we extract it, the faster we burn it all up, the faster we’re forced to alternatives. They should also never forget that all energy on earth, except arguably tidal, comes from the sun. Oil is simply a way that solar energy can be stored, just as it is in plants, or the wind. The wonderful physicist, Richard Feynman explains, http://www.youtube.com/watch?v=ITpDrdtGAmo&feature=relmfu

  9. EulerNo Gravatar says:

    Seth, I enjoyed the article and agree with you. However, I think it should be said that attacking the predictions of a theory does have merits. If a theory suggests several outcomes which do not appear, this legitimately serves to discredit the theory. But this is only as good as the strength of relation between the theory and the prediction.

    You have predictions attached logically, such as the orbits of the planets from Newton’s formulation of gravity, and those poorly attached, such as the ones mentioned in the Peak Oil article. The predictions reference in the article have little bearing on the validity of the theory, but predictions could very well have that affect.

  10. b wNo Gravatar says:

    suggest changing:

    I think it’s safe to say that solar energy is an inexhaustible resource

    to

    I think it’s safe to say that solar energy is a reasonably sustainable resource

    • Seth KingNo Gravatar says:

      Done! Thank you for the recommendation. I also fixed a repeated misspelling of the word “acknowledge.” For shame.

    • Steve in HungaryNo Gravatar says:

      No! “I think it’s safe to say that solar energy will be with us for millions or billions of years, until the sun begins to run out of hydrogen. Once fossil fuels run out it will be the only meaningful energy source that we have”

  11. RichardNo Gravatar says:

    You left out relevance. Dirt is also a finite resource, a fact that is both true and irrelevant. You rest your argument on the fact that oil is finite, but that is insufficient. For that fact to have significance, you must consider how well the supply of oil meets demand, and how long those conditions will last while alternative technologies are developed. If we have enough oil to last until alternative technologies are developed, then the fact that we don’t have a infinite amount of oil is pointless.

    • Bob RobertsonNo Gravatar says:

      Alternatives to everything petroleum provides already exist. They just cost more than petroleum at this time. Either their costs will decrease, or petroleum will get harder to extract thus raising its cost. At some point the costs of the alternatives will be lower than the cost of petroleum, and people will stop using petroleum and instead use the alternative.

      Thermal depolymerization, for example.

      We will never “run out”, it will simply be more expensive to use petroleum than to use the alternatives, as the costs change. Then, just like every other resource in a market economy, the use of petroleum will be for those few things for which the alternatives remain more expensive. Just like now, since we don’t use petroleum for those things where it is less expensive to use other resources. Big boats are made of steel, not plastic, for example.

      In my opinion, the Austrian argument against “peak oil” is NOT that there won’t be (or hasn’t been) a “peak” of petroleum production, which will be followed by a decrease in use as its costs of extraction rise.

      The Austrian argument against “peak oil” is that the dire predictions that come hand in hand with that phrase in the popular media are far out of line with reality. That’s all.

  12. The environmental left are evil. Why do we want credibility with them?

    They want to murder several billion people to reduce world population to “sustainable” levels and set up a totalitarian terrorist world government as envisaged in the “No Pressure” video.

    If evil people do not hate you, you are doing something wicked. Our objective should be to make them fear us more than they hate us.

    The food to fuel program, which destroys enough food to feed several hundred million people, is a foretaste of the world state they intend.

    • Seth KingNo Gravatar says:

      Turn off the Alex Jones for a minute and take some time to read some environmental literature. While there may be evil people exploiting the environmental left, the average environmentalists are good people with, often, misguided philosophy. There is a ton of things environmentalists have right that traditional conservatives do not, and vice versa. In order for us to move forward, all sides are going to have to shelve their egos and learn from, and teach, one another.

  13. > “the average environmentalists are good people”

    Here is a test of whether he is a good person: Ask your average environmentalist about “Mike’s nature trick … to hide the decline”

    He will patronizingly explain that “decline” did not necessarily mean what it sounds like it means, but will not explain “trick” or “hide”, implicitly admitting that he knows that “trick” and “hide” meant exactly what they sounded like they meant. So, he wants to trick you by hiding stuff from you. Therefore, he means you harm. He wants you to suffer, he wants power over you, he wants to be able to act like the people on the “No pressure” video, wants to be able to execute those who will not submit.

    Which is what he would have gotten had the Copenhagen Climate Change Treaty gone through.

  14. AmanskiNo Gravatar says:

    Yeah, I have never seen the contradiction with AE or necessity of attacking peak oil. We already acknowledge from the outset that there are finite resources.

    I dont either see why because oil might be running out, we should give more resources to wasteful criminals. That doesnt follow. Especially wasteful criminals who hold alternative energy applications this very moment(patents).

    I do have a problem though with enviros pretending to know WHEN oil will disappear, or when their malthuasian predictions will occur. And ofc all their false socialist solutions.

    I think its important for Austrians too READ MISES, who said the Malthuasian discovery was one of the greatest social science discoveries in history. A great lecture on this “Escaping the Malthuasian Trap”.

    One thing that does make me suspicious though on the oil question is why its price has not risen by more than 20 % in precious metals the last 60 years. If it was running, one would expect it to increase more.

  15. Martin BrockNo Gravatar says:

    The Saudis don’t overstate their reserves to keep the price low. They do it to keep their production high. An OPEC member’s production allowance depends upon its reserves. The Saudi monarchy is unstable, so it has every reason to sell as much oil as possible as soon as possible, to enrich itself as much as possible before it loses power.

  16. Martin BrockNo Gravatar says:

    “Oil production follows a bell-shaped curve” oversimplifies Hubbert’s theory. The theory doesn’t simply fit a curve to oil production. It relates increases in production to increases in proven reserves. When reserves stop growing, a production peak will follow. “Reserves are higher than ever before” does not imply that a production peak is not near. A peak in reserves is an unprecedented high by definition, but a peak in reserves portends a peak in production.

    Reserves seemed to peak in the nineties, when estimates of reserves hardly changed over the decade; however, reserves are now rising again, partly because high oil prices have increased the reserves than can be profitably produced.

    Most of the recent increase in reported reserves is heavy crude from a single, Latin America country. Venezuela alone increased its reported reserves from 87 billion barrels in 2006 to 296 billion in 2010. These estimates seem highly questionable to me.

    http://www.opec.org/opec_web/static_files_project/media/downloads  /publications/ASB2010_2011.pdf

    Also, Hubbert’s model is “bell-shaped”, but it is not a Gaussian. It’s the derivative of a logistic function. The Gaussian is a common model for statistical distributions because of the Central Limit Theorem, but Hubbert’s curve is not a statistical distribution.

  17. Robert FriedlandNo Gravatar says:

    Tough guy,

    Deming is a geology professor at University of Oklahoma and he has trained countless geoscientists. He knows more about the subject matter than you.

  18. David MorreyNo Gravatar says:

    Interesting discussion. I come down on the side of those who don’t see much point in Peak Oil Theory. The point of the peak, and the gradient of the down slope is very far from being fixed as the market price of the resource is such a huge influence. And what point is having the concept of a peak when our ability to predict it is so futile – existing predictions have already been shown to be at least a generation wrong and show signs that they may end up being wrong by a century or two, or three. Doesn’t that kind of timescale put peak oil theory in the same ballpark as other, likely but on an unknown timescale theories such as achieving low cost nuclear power or being able to mine the other bodies of our solar system for the hydro carbons to be found there?

    I think the Austrian viewpoint would be summarised as we have an obligation to exploit the most efficient (given current prices) energy source we can get our hands on and by doing that we develop the capital and technology base to introduce alternatives when the price system tells us they are needed. Using peak oil theory as an excuse to engage in the massive diversion of resources to low value purposes just makes us all poorer – particularly when it is the goverment making the decision for us.

    • Steve in HungaryNo Gravatar says:

      “existing predictions have already been shown to be at least a generation wrong”

      Well, not M King Hubbert’s prediction about when the US lower 48 would peak. Accurate to within a year and made in 1956.

      “we have an obligation to exploit the most efficient (given current prices) energy source we can get our hands on and by doing that we develop the capital and technology base to introduce alternatives when the price system tells us they are needed.”

      Nope, absolutely not. We ALL (especially the US of A) need to realise right now that we ALL use too much fossil fuel energy and need to get off it as soon as possible. What are governments doing? Bugger all. Bought and paid for by big oil, etc, etc..

      • David MorreyNo Gravatar says:

        Mr Hubbert’s lower 48 prediction could probably be proved wrong if there was the political will to drill more. I’m from England and in the 70’s North Sea Oil was supposed to run out by the mid-80’s, oops, make that 2000, oops, make that 2030… And Saudi Arabia was meant to peak in the mid-90s.

        I’m a bit surprised Steve in Hungary feels the need to cut down on fossil fuel usage regardless of the messages the pricing system is giving. In England we pay $12 a gallon for gas as 80% of it is tax – that’s a huge price distortion against gas and yet it is still hugely preferable to the alternative sources of energy. Just how much of my income does Steve think I should be spending on energy from alternative sources (rather than spending my income on other stuff, like educating my children for instance) for the sake of what looks rather like a sweeping value judgement on his part?

  19. All talk about “fossil fuels”. Why nobody notice that no experiment could verify that oil has a fossil source. Please read this: http://www.kth.se/en/aktuellt/lattare-att-hitta-olja-1.43372 or read the story in “nature”: http://www.nature.com/ngeo/journal/v2/n8/pdf/ngeo591.pdf

    • Steve in HungaryNo Gravatar says:

      Rubbish!

      The carbon isotope footprint of fossil fuels indicates quite clearly that it derives frpm stuff that once grew on the land or lived in the sea.

      Do some actual research!

  20. > The carbon isotope footprint of fossil fuels indicates quite clearly that it derives frpm stuff that once grew on the land or lived in the sea.

    Coal, clearly derives from plant matter, oil, however varies in its isotope levels in complicated ways that are hard to make sense of, and which do not “clearly” indicate anything. *Some* oil derived from plant matter, some oil derived from fish shit, some oil people wave their hands a lot to rationalize the data away.

  21. johnnyNo Gravatar says:

    Good discussion of peak oil, thanks. I often find myself arguing with people about this whole myth that north dakota oil is going to make us energy independent. The numbers just don’t add up, but people still want to trumpet that myth. Wishful thinking maybe.

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