While discussing the concept of 'Peak Oil' at work today, I offered that it made no sense to to invest in an expensive high mileage car (for example) in order to 'save oil'. Any oil you saved would just be used by someone else at today's low price and - in the meantime - you would put yourself at a competetive disadvantage by paying more for energy than you needed to.
The other person offered that this was an example of the "tragedy of the commons" since everyone was incentivized to use the oil and no one was incentivized to conserve it. Although I couldn't argue that it certainly looked the same, I always thought that the "commons" argument pointed to a problem with property rights - that common ownership was at the root of these sorts of problems. However, it doesn't look like oil supplies - in general - suffer from a common ownership problem.
So I'm confused with how to classify the whole situation, is it:
1) An example of the "commons" tragedy? But does that imply that "commons" is more than just property rights? or that oil supplies have ownership issues?
2) An example of something else with similar consequences? perhaps some sort of game theory?
3) A problem with the argument as a whole? (by assuming peak oil is true, am I putting some false constraint on the issue?)
Any help appreciated - even a link somewhere - I'm not sure if this is a "commons" issue or not.
This is not just a discussion for geology. Peak Oil is an interesting concept, but as with any resource, the key rationing device is the price. Conservation of oil can and will be dictated by the price alone. What seems very strange to me is that oil continues to be exclusively denominated by it's price relative to the US dollar. There are many countries throughout the world that have suggested oil be denominated relative to another currency.
What's also very interesting is that other forms of energy are denominated relative to a barrel of oil equivalent (BOE) and our friends at the IRS define BOE in terms of joules (J). But why does the IRS determine this and not a convention held by the market or at least the Department of Weights and Measures? The problem with defining oil in terms of joules is that it assumes the conversion rate of oil is constant and that there's no possibility for efficiency gains. Efficiency gains in the burn rate of oil would effectively increase the amount of oil by increasing the energy derived from converting it to another form of energy.
Peak Oil could be a construct of this thinking that the energy derived from oil is constant. But it is certainly not. So why does the government hold it constant?
Two theories:
(1) the government creates the Peak Oil myth to declare the supply of oil will run out in the short-run. Many DOE estimates over the past century have declared we will run out of oil, only to have to push the estimate back with new discoveries. Efficiency gains are like new oil finds. But the myth helps to drive the push for government interefernce in the energy markets: conservation efforts, taxes, and "investments" in back-end (consumer) efficiency technologies.
(2) the Peak Oil myth is a way of controlling the means of production. Declaring that if we running out of oil justifies the capture of land to prevent from being used for E&P operations. Preventing E&P limits the supply and increases the price of oil and the inputs costs to other production. Preventing input costs from falling prevents the efficency gains throughout the rest of the economy and the corresponding fall in wholesale prices (their dreaded deflationary event in Keynesianism).
Peak Oil is a Myth
Ask any proponent of the Peak Oil Theory what the exact amount of fossil fuels the earth contains. Without knowing this amount no rational claim of Peak Oil can be made and it is thus a Myth as currently proposed.
The only entity preventing further exploration and extraction of fossil fuels is the state and the only entity negatively effecting the actual cost of fossil fuels is the state through taxes and regulations. Only the state can cause shortages of resources and any energy "crisis". In a pure free energy market all land would be available for energy production at a free market price, thus availability would be limited by cost, technology and of course actual supply. Say a hypothetical obtainable limit to our demand was reached in actual supply, long before this was reached prices of fossil fuels would rise, once fossil fuel prices rose above what other competing free market energy sources were, these cheaper energy sources would be adopted on their own. All without government intervention. The government was not needed to switch away from horses to cars. But we have no such scenario since the state is artificially creating supply shortages by restricting land access through regulations. The state is also artificially increasing energy costs above free market rates with taxes and regulations. In essence the state is creating a Peak Oil scenario to benefit the green lobby. But no such thing exists even with known reserves:
Myth: The World is Running Out of Oil (5min)
Despite Popular Belief, The World is Not Running Out of Oil, Scientist Says (Science Daily)It’s a myth that the world’s oil is running out (The Times, UK)Myth: The World is Running Out of Oil (ABC News)No Evidence of Precipitous Fall on Horizon for World Oil Production (Cambridge Energy Research Associates)Oil: Never Cry Wolf—Why the Petroleum Age Is Far from over (Science)Oil, Oil Everywhere... (The Wall Street Journal)The World Has Plenty of Oil (The Wall Street Journal)
Reserves:- 1.3 Trillion barrels of 'proven' oil reserves exist worldwide (EIA)- 1.8 to 6 Trillion barrels of oil are estimated in the U.S. Oil-Shale Reserves (DOE)- 986 Billion barrels of oil are estimated using Coal-to-liquids (CTL) conversion of U.S. Coal Reserves (DOE)- 173 to 315 Billion (1.7-2.5 Trillion potential) barrels of oil are estimated in the Oil Sands of Alberta, Canada (Alberta Department of Energy)- 100 Billion barrels of heavy oil are estimated in the U.S. (DOE)- 90 Billion barrels of oil are estimated in the Arctic (USGS)- 89 Billion barrels of immobile oil are estimated recoverable using CO2 injection in the U.S. (DOE)- 86 Billion barrels of oil are estimated in the U.S. Outer Continental Shelf (MMS)- 60 to 80 Billion barrels of oil are estimated in U.S. Tar Sands (DOE)- 32 Billion barrels of oil are estimated in ANWR, NPRA and the Central North Slope in Alaska (USGS)- 31.4 Billion barrels of oil are estimated in the East Greenland Rift Basins Province (USGS)- 7.3 Billion barrels of oil are estimated in the West Greenland–East Canada Province (USGS)- 4.3 Billion (167 Billion potential) barrels of oil are estimated in the U.S. Bakken shale formation in North Dakota and Montana (USGS)- 3.65 Billion barrels of oil are estimated in the U.S. Devonian-Mississippian Bakken Formation (USGS)- 1.6 Billion barrels of oil are estimated in the U.S. Eastern Great Basin Province (USGS)- 1.3 Billion barrels of oil are estimated in the U.S. Permian Basin Province (USGS)- 1.1 Billion barrels of oil are estimated in the U.S. Powder River Basin Province (USGS)- 990 Million barrels of oil are estimated in the U.S. Portion of the Michigan Basin (USGS)- 393 Million barrels of oil are estimated in the U.S. San Joaquin Basin Province of California (USGS)- 214 Million barrels of oil are estimated in the U.S. Illinois Basin (USGS)- 172 Million barrels of oil are estimated in the U.S. Yukon Flats of East-Central Alaska (USGS)- 131 Million barrels of oil are estimated in the U.S. Southwestern Wyoming Province (USGS)- 109 Million barrels of oil are estimated in the U.S. Montana Thrust Belt Province (USGS)- 104 Million barrels of oil are estimated in the U.S. Denver Basin Province (USGS)- 98.5 Million barrels of oil are estimated in the U.S. Bend Arch-Fort Worth Basin Province (USGS)- 94 Million barrels of oil are estimated in the U.S. Hanna, Laramie, Shirley Basins Province (USGS)For Comparison:- 260 Billion barrels of oil are estimated in Saudi Arabia (EIA)- 80 Billion barrels of oil are estimated in Venezuela (EIA)
"Anarchism misunderstands the real nature of man. It would be practicable only in a world of angels and saints" - Ludwig von Mises
Poptech wrote:
<<< I take it you never watched the video in my original post, >>>
I already watched that, and what he basically says is that - indeed - we run out of cheap oil. He does not say that either oil is 'infinite" nor that peak oil theory as such is untrue.
Yes, there are tar sands that will still last some time. But at what price?
Have you made the calculation about his claim that tar sands will fuel all the world for all the energy need for 100 years?
I'm sure he forgets about the fact that the planet's population in a 100 years is a bit larger as today, and that the energy use per capita will also be signifianctly bigger.
Rob:<<< Also has anyone one read up on abiogenic oil? >>> Oh, come on. That is too ridiculous for words!!!!
Oh, come on. That is too ridiculous for words!!!!
Rob:<<< Actually abiogenic theory is not bogus, >>> It is bogus.
It is bogus.
In your opinion. Do you have the expertise to explain the White Tiger oil field and why, according to you, it's ridiculous????
Can you explain to us why the moons on Saturn have more oil then we do? Even though there's no evidence of there ever being carbon life?
Rob:<<< Ok then your whole argument is self refuted. >>> Have you read my whole post?
Have you read my whole post?
It's not necessary, you refuted yourself in the first sentence. You have no idea how much is out there, so there is no way you can know if we're at a peak.
Oil on the moons of Saturn? Really? How do you know? Hydrocarbons maybe, but oil? Are you intending to bring it here? ;)
People who laugh off this issue can't be taken seriously. Throughout this thread there's been suggestions that there's lots of oil, that it is abiogenic, that prices will serve as motor for conservation and investment in alternatives. I think that's all bunk based on a whole slew of highly questionable assumptions. For one thing, if it takes a barrel of oil's worth of energy to extract a fresh barrel, it is simply never going to happen whether it is abiogenic or not.
the_Last_Name_Left:Hydrocarbons maybe, but oil?
Can you explain to me the difference between a hydrocarbon and oil? Thanks.
the_last_name_left: I think that's all bunk based on a whole slew of highly questionable assumptions.
Well those assumptions aren't as bad as believing in peak oil.
the_last_name_left:For one thing, if it takes a barrel of oil's worth of energy to extract a fresh barrel, it is simply never going to happen whether it is abiogenic or not.
This is just a very terrible play on words, and leans towards the dishonest side of things.
Oil is composed of hydrocarbons - but hydrocarbons such as the methane found on Saturn's moon Titan is naturally occuring. There is absolutely nothing to suggest the methane on Saturn is of biological origin, nor is there any reason to expect to find "oil" there. Anyway, you claimed 'the moons of Saturn have more oil than we do'. How you know this is a mystery. In reality, you don't know this, your claim is groundless
You also say peak-oil proponents don't know how much oil is left, hence can't know when we will reach peak. Did you forget that the same argument can be applied to the peak-oil sceptics' position? In fact there are estimates to how much oil is left, but such estimates need care: not all oil will be recoverable and OPEC sets its sales quotas on the estimates provided by its constituents and hence there is a self-interest in exaggerating reserves so as to maximise quotas (a profit incentive for quick depletion, somewhat supporting the OP imo) The implications are obvious?
As for abiogenesis of oil, it's an obscure theory with almost no support amongst chemists and geologists. Maybe it is true? Maybe. But how do you know? As a non-expert I have to take my cue from the experts, and their view is that oil is biogenic and finite. What is known has to determine policy, not imagination and hope for obscure and unsupported theories.
the_last_name_left:Anyway, you claimed 'the moons of Saturn have more oil than we do'. How you know this is a mystery.
I don't. How do you know peak oil is no mystery? What I do know is that I would be more ready to trust Nasa scientists on this specific topic over you.
Boy you guys will fight this too the bloody end won't you. It's not about truth any more is it?
the_last_name_left:your claim is groundless
Yea those stupid Nasa scientists! You tell em! Your intel on this matter far surpasses them.
the_last_name_left:You also say peak-oil proponents don't know how much oil is left, hence can't know when we will reach peak. Did you forget that the same argument can be applied to the peak-oil sceptics' position?
I know that the price of oil is generally low. So it pretty much debunks the idea that we are running out. But I am not arguing that we are running out, or have alot. I am arguing neither. I am just simply pointing out the fallacy of your claim. And by the way this comment does not change the fact that you still do not know how much oil reserves earth has.
the_last_name_left:As for abiogenesis of oil, it's an obscure theory with almost no support amongst chemists and geologists.
Not nearly as obscure as believing that Dinosaurs decidedly all banded together and died in the exact same spots on earth, so as to create large pools of oil in only specific area's on earth. I suppose you think your theory is less silly? Why because they taught that to you in grade school? It doesn't make sense that these area's are some of the most desolate area's on earth. Did you ever learn to think for yourself? Or were you taught in gradeschool to follow directions, and believe every academia theory you hear about? And whichever comes first wins? Which is it?
If any theory is vague it's yours. So many just blatantly silly assumptions made. Im not saying it's not true, I'm simply saying look at the thorn in your own eye, before pointing at mine.
What a silly argument you've built.
Over and over again. Does anyone read the thread before posting the same things? Oil does not have to be used to extract oil, natural gas and nuclear can be used.
"For one thing, if it takes a barrel of oil's worth of energy to extract a fresh barrel, it is simply never going to happen whether it is abiogenic or not." - the_last_name_left
It actually always takes more than one unit of energy to get one unit of energy out of the ground, however those units are defined. It's called thermodynamics and it's pretty well settled physics. And yet, people still do it. I wonder why...
"Not nearly as obscure as believing that Dinosaurs decidedly all banded together and died in the exact same spots on earth, so as to create large pools of oil in only specific area's on earth. I suppose you think your theory is less silly?" - filc
That's a little disingenuous to the position. Dinosaurs may not have all done a mass suicide in one area, but biology also includes plants and other organisms that aren't so mobile. Forrests and bounded habitats like inland seas and lakes, and their plankton and fish and other organisms which can't leave the area, are what generally form oil.
xahrx:That's a little disingenuous to the position. Dinosaurs may not have all done a mass suicide in one area, but biology also includes plants and other organisms that aren't so mobile. Forrests and bounded habitats like inland seas and lakes, and their plankton and fish and other organisms which can't leave the area, are what generally form oil.
But you get my point right? He's claiming that the abiogenic theory is bunk, has holes, and is just down right "rediculous". Meanwhile the existing oil creation theory's aren't any better. Furthermore he's passing judgement from a place of ignorance. Something that particularly bothers me. =p
But you get my point right? He's claiming that the abiogenic theory is bunk, has holes, and is just down right "rediculous". Meanwhile the existing oil creation theory's aren't any better." - filc
They are better. That's not to say abiogenic theory isn't correct, but even the White Tiger fields were conceivably 'filled up' from a source where biological oil was likely or possible. But the fact still remains that abiogenic hydrocarbons already exist, as you pointed out on Titan and here on Earth in the form of thermal depolymerization. Seems to work fairly well too, despite the fact that it isn't sucking down subsidies too which is nice. I see no reason why both processes can't be at work, biogenic and abiogenic.
"Furthermore he's passing judgement from a place of ignorance. Something that particularly bothers me. =p"
You just described The Internet.
Crude oil production peaked in 2005 and has been flat ever since. The deniers of peak oil are blatantly denying objective reality, not unlike flat earth advocates or other similar groups
80% of the worldwide oil supply is controlled by governments. Production statistics are therefore not proof of peak oil, but of the whims of some central planner.
- 1.3 Trillion barrels of 'proven' oil reserves exist worldwide (EIA)
If we take this example of known cheap oil reserves and do a calculation with today’s consumption levels. That would mean we have 40 years of oil left and that is not accounting for exponential growth. If you think oil shale is going to replace cheap oil then sure you are correct there is no oil crisis because based on those findings there are billions of barrels of oil shale that could last us 250 years by your amount of 7 trillion barrels. But unfortunately oil shale requires a lot of water and energy to produce and is only viable when people can pay a lot of money for it. Don't know how well that would work in some of the uses of cheap oil that play a large part in our economy. A lot of critics of peak oil make the argument that we can just move to another form of energy but there is no other type of energy that can replace oil at this time. You can turn coal in to plastic containers and Chinese tooth brushes. I always tell people that peak oil is not just running out of oil, it is when oil becomes so expensive that it is not economic viable to import those socks you are wearing from china. Then we have peak oil.
1.3 trillion barrels divide 85,085,664 bbl/day source x 365
40 years worth of cheap oil.
Peak oil was a wacky theory from the 50's that turned out to be wrong. Yet these days it is repeated as if it is a law of thermodynamics. Peak oil is based on very simple equivocation fallacy: It confuses known extractable reserves with the overall amount of oil on the planet. Both are called "oil", but known reserves can't peak because they aren't a finite quantity. That's where the whole theory of peak oil breaks down. We can talk about oil shortages, or oil running out, but peak oil is wrong.
Here's a little timeline for you: 1882: 95 million barrels remaining, 1950: 100 billion barrels remaining, 1980: 648 billion barrels remaining, 1993: 999 billion barrels remaining, 2000: 1016 billion barrels remaining, 2008: 1238 billion barrels remaining. (source) And above EIA link says it was 1342 billion barrels in 2009. That means that we actually added more to our reserves than we burned up. Despite unprecedented alarmism about oil running out, reserves have always been growing! Even in recent years. Now if something is supposed to run out, wouldn't you at least expect it to decline?
The simple fact is that oil reserves grow. They just go up, up and up. And if we extrapolate that trend, we will have more oil in 40 years than we have now. All that talk in the media is just pretty numerology. The numbers are true, but the implications are completely wrong. The fact is that predictions of this or that running out have been around since Malthus, and they have always been wrong. That is because these models don't take into account that reserves are renewed because a resource is scarce. Environmentalist predictions are like religious predictions of the apocalypse; the date is always a few years ahead yet it somehow never comes up. It's just perpetually postponed. And that's how it's going to continue to be. Like the food in your fridge, resources will always be about to run out, yet never actually run out.
"The fact is that predictions of this or that running out have been around since Malthus, and they have always been wrong."
To expand on this point, the USGS has been predicting the imminent depletion of oil since we started burning it for fuel.