[p2p-research] no oil crisis?
Paul D. Fernhout
pdfernhout at kurtz-fernhout.com
Thu Aug 6 16:56:01 CEST 2009
Michel Bauwens wrote:
> Hi Paul,
> is chapter 11 is anything to go by ... Julian Simon's book must be total
> crap ...
OK, so where do you disagree with, say, this:
You may wonder whether "non-renewable" energy resources such as oil,
coal, and natural gas differ from the recyclable minerals in such a fashion
that the non-finite arguments in earlier chapters do not apply. Eventually
we'll burn all the coal and oil that powered these impressive advances, you
may be thinking. But our energy supply also is non-finite, including oil
as an important example. That was not a misprint. In chapter 3 I showed
that it is necessary to say how one would count the amount of a resource if
one is to meaningfully say that the resource is finite. Therefore, let's
consider the following sequence of difficulties with respect to counting
the amount of oil. As with other resources, careful thinking leads to the
conclusion that the potential amount of oil - and even more, the amount of
the services that we now get from oil - is not finite.
(1) The oil potential of a particular well may be measured, and hence it
is limited (though it is interesting and relevant that as we develop new
ways of extracting hard-to-get oil, the economic capacity of a well
increases). But the number of wells that will eventually produce oil, and
in what quantities, is not known or measurable at present and probably never
will be, and hence is not meaningfully finite.
(2) Even if we unrealistically assume that the number of potential wells
in the earth might be surveyed completely and that we could arrive at a
reasonable estimate of the oil that might be obtained with present
technology (or even with technology that will be developed in the next 100
years), we still would have to reckon the future possibilities of shale oil
and tar sands - a difficult task.
(3) But let us assume that we could reckon the oil potential of shale
and tar sands. We would then have to reckon the conversion of coal to oil.
That, too, might be done, but the measurement is becoming increasingly
loose, and hence less "finite" and "limited."
(4) Then there is the oil that we might produce, not from fossils, but
from new crops - palm oil, soybean oil, and so on. Clearly, there is no
meaningful limit to this source except the sun's energy (land and water are
not limits - see chapters 6 and 10). The notion of finiteness is making
ever less sense as we proceed.
(5) If we allow for the substitution of nuclear and solar power for oil
- and this makes sense because what we really want are the services of oil
and not oil itself - the notion of a limit is even less meaningful.
(6) Of course the sun may eventually run down. But even if our sun were
not as vast as it is, there may well be other suns elsewhere.
The joke at the head of chapter 3 makes the point that whether there is
an "ultimate" end to all this - that is, whether the energy supply really is
"finite" after the sun and all the other planets have been exhausted - is a
question so hypothetical that it should be compared with other metaphysical
entertainments such as calculating the number of angels that can dance on
the head of a pin. As long as we continue to draw energy from the sun, any
conclusion about whether energy is "ultimately finite" or not has no bearing
upon present policy decisions.
I think Julian Simon's philosophy goes wrong in issues like natural
biodiversity (until we gene-engineer new animals), social equity (until we
have a basic income), and the systemic risk of global war (an external cost
of war being profitable, which it is hard to eliminate until we move beyond
the market entirely to local production and a peer-based gift economy). But
the core idea of the market *eventually* adjusting to scarcity by changing
pricing structure and investing in alternatives seems sound, absent special
interests or government backed monopolies. From Brittle Power:
"Brittle Power: Energy Strategy for National Security is a 1982 book by
Amory B. Lovins and L. Hunter Lovins, prepared originally as a Pentagon
study, and re-released in 2001 following the September 11 attacks. The book
argues that domestic energy infrastructure is very vulnerable to disruption,
by accident or malice, often even more so than imported oil. According to
the authors, a resilient energy system is feasible, costs less, works
better, is favoured in the market, but is rejected by U.S. policy. In the
preface to the 2001 edition, Lovins explains that these themes are still
So, the production of better solar panels and wind power and alternatives is
just proof of Julian Simon's point. The market is planning for and adjusting
to an increasing physical scarcity of oil, which will ultimately make fossil
oil fairly very cheap (but no one will want it, because it will be dirty,
unhealthy, unaesthetic, immoral, etc. same as lighting homes with whale oil
lamps instead of electric light bulbs these days). Granted, the market has
to have a credible alternative to switch to, but solar and wind and other
things are very credible at this point, so the switch will happen and is
Now, often the government supports the centralized technology for political
reasons (like special interests):
"In 1860, the government determined which technology was best. The oil
industry was the favorite, and in effect, it was born with the competition
swept neatly away and the silver spoon of subsidy (or tax advantage) lodged
firmly in its teeth."
It has been hard for renewables to fight against all the government
subsidies to the fossil fuel and nuclear interests. But they seem finally to
be winning in the market, despite a playing field heavily tilted to fossil
fuels and nuclear energy.
By the way, some people think much oil comes from cosmic processes, not
dinosaurs. Hydrocarbons are common in other parts of the solar system. So,
there are both lots of them around (though hard to get at, and pointless to
bring back to Earth, although using them in place may be a good idea). But,
like the stone age did not end because we ran out of stones, we now have the
solar electric option, like from Nanosolar, which will soon (two decades?)
mean fossil oil is no longer used much, same as whale oil is no longer used
much, and wood heat is no longer used much for industrial processes (some
heat homes with wood still, of course).
Anyway, I'd appreciate it if you could be specific about what you object to
either above or in that chapter.
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