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  • From: Clansgian AT wmconnect.com
  • To: homestead AT lists.ibiblio.org
  • Subject: Re: [Homestead] Tilting at oil derricks
  • Date: Wed, 14 Nov 2007 22:56:53 EST


>Do we know of any economic interest groups that do not have paid
cheerleaders?

No. There aren’t any. All the more reason to not use any of them as a
source of information. The two I mentioned, NAR and CERA, for example, I am
astounded at the number of times their predictions have been just dead 180
degrees
wrong and it’s not because they were blind sided. Other individuals and
organizations have made consistently much more accurate predictions in those
areas.

>Long before the oil runs out there will be a plethora of
>alternate energies. They exist now but the prices are too high to be
>economically viable. As alternate fuels' prices decline and oil
>prices rise, when the prices meet in the middle, the oil game is over.

Spoken like a true economist. The purist economist sees the "invisible hand"
in the market as correcting and equalizing everything, but the ivy grows
thick about their heads and too often reality is left out of the economic
equation.

My posit is this: Oil provides so much of the world’s energy, and especially
the energy used in the US, and oil is so convenient, energy dense, portable,
storable, flexible, and right now, abundant, that there IS no alternate nor
combination of alternates that bid fair to replace any but a small fraction
of
the energy from oil.



In a lot of ways, saying that we will find an alternative for oil is like
saying we will find an alternative for water or soil. Oil is unique. We pat
ourselves on the back with the likes of "but we sent a man to the moon!"
Yes.
But only because we were in the oil age. Feats like that are more a function
of our floating on a sea of oil than our cleverness.

Here is where the economists trip up. Suppose you have a farm vehicle that,
for the sake of easy arithmetic, has a ten gallon tank and gets ten miles to
the gallon. The filling station is just a little ways down the road and you
have for years driven the vehicle to the pump (for the sake of my
illustration,
the only way to fill it up) and the fuel expense of getting it from the farm
to the pump and back is negligible.

But one day that filling station closes (forever) and the next closest one is
five miles away. Now it takes half a gallon of gas to get to the filling
station and half a gallon to get back. Your overall fuel costs are a bit
more.
You arrive back at the farm with nine and a half gallons but must make sure
that half a gallon remains in the tank to get back to the filling station.
You
have a useable capacity now of nine gallons although you must purchase ten.

Then that filling station closes (forever) and the next closest station is
thirty miles away. Once you have filled up at this station, it takes three
of
your ten gallons to get back to the farm and even with the seven gallons
remaining, you can only use four to do farm work. You have to leave three
gallons
in the tank to get back to the filling station.

Your fuel cost is now much higher. You have to pay for ten gallons of gas
but you get the use out of only four of them.

Then that service station closes (forever) and the next nearest station is
sixty miles away. At this point the economics don’t matter any more. There
is
no way for you to get to the service station and arrive back at the farm.
You’d be out of gas before you got there. At this point you lose the use of
your
vehicle.

This is what peak oil is about. It isn’t about "running out" of oil. That
isn’t possible. In the 1930’s it took the energy of one barrel of oil to get
100 barrels of oil out of the ground and refine it. Now of days that’s close
to the energy equivalent of 30 barrels of oil to obtain and refine 100
barrels
and that ratio worsens each year. The filling station is 15 miles away and
is on the verge of closing (forever). Economists look on oil as if it can be
had forever if we are just willing to pay enough money for it, but just like
the example of the farm vehicle, once it takes a barrel of oil to get a
barrel
of oil, it doesn’t matter how much money you are willing to pay, you get no
oil
to use.



To the economist it’s just a matter of oil getting so expensive that solar or
wind will be "cheaper" and everything will equal out. But they are looking
only in the amount of money involved which in energy terms is irrelevant.
Oil
is used to produce wind turbines, solar cells, batteries, transmission lines,
vehicles, and every other device that uses and delivers energy. When we rely
on, for example, the energy of a wind turbine to make another wind turbine,
the returns are scant.



What is requires, which we don’t have now, is an entirely new way of viewing
what our culture is all about. Looking about for something else to stuff in
the gas tank when the oil is gone is not going to get us anywhere.

Or as Al Einstein put it: "We can't solve problems by using the same kind of
thinking we used when we created them."


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