On Sun, 18 May 2008, Jim Grisanzio wrote:
Brian Behlendorf wrote:
I would much rather be hitting this curve due to refining capacity than to
declines in the amount of oil being pulled out of the ground. If we could
refine all we could pull, then total reserves would decline that much more
quickly, and the wall we would hit (when oil really does start to run out)
would be much sharper than it would be if prices crept up slowly from here
on out, giving us a generation or two to switch to alternatives rather than
just a few years.
I totally agree with this. But with demand now rising so fast globally, will
we hit that inevitable decrease in supply that much sooner? Behavior is
changing, sure, but I'm not sure current prices in the US are high enough yet
to really move the government (I'm talking about the next government, not the
current one, of course) to invest in alternatives in a way that is serious
enough to re-tool the country's energy infrastructure.
If all the U.S. government did was eliminate its subsidies to the
petroleum industry, it wouldn't have to do anything more - $8/gal gas
would compel alternatives all on their own. Lots of nations subsidies
petroleum, not just the oil-producing ones; that will become less
sustainable as prices go and remain high. Iran's in big big trouble
because of this - they passed their peak crude-extraction years awhile ago
and have been net importers of refined fuel for quite awhile, yet the
government controls the price of fuel to be somewhere around 42 cents per
gallon:
http://www.iranian.ws/iran_news/publish/article_24506.shtml
A lot depends on *how* China's and India's new wealth turns into consumer
demand. In the same way that mobile phone technologies avoided the need
for expensive land line infrastructures (and the monopolies they created),
let's hope the new Chinese middle class gives up their bikes for electric
cars (powered from nuclear or wind or whatever) rather than petro cars.
There are some encouraging signs - the Tata nano car gets 60 mpg, from
what I understand - but other discouraging signs, like the continued
growth of electrical generation from coal in both China and India.
Without carbon emissions controls (like a cap n trade system that includes
China and India), there will be no economic incentive to modernize in a
low-carbon-emissions way. Yet neither country wants to be a part of such
a system (Kyoto, et al) as they see carbon emissions as an inevitable
result of economic growth to which they feel entitled. Even a
sensible-sounding policy like equal per-capita emissions limits would mean
a huge emissions cieling would need to be created, nevermind bringing us
down from current worldwide emissions levels. The only pathway out is to
make it expensive to emit and pollute, expensive for all players. The
good news is that there are significant economic returns from being a
non-petro-dependent economy.
Brian
