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Comment by jofer | Hacker News Reader

As a geologist in the oil industry, this is one of the few articles I've seen on peak oil that absolutely nails the salient points. (And even gets the geology correct.)

To quote: "Most simply, peak oil is about rates, not amounts."

Yes, there are a lot of unconventional resources. They're just a lot harder, more expensive, and most importantly in this context, slower to produce.

On the upshot for me, and the downshot for the rest of civilization, oil (and to a large degree, energy) prices are likely to stay high for the near future for exactly this reason.

However, we haven't developed a viable alternative to liquid fossil fuels in terms of energy-density fast enough. That very, very deeply scares me.

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The concept "peak oil" to me seems to misdirect the debate right off the bat. Obviously the question isn't "when do we run out of oil" but "how does oil supply given continually increasing demand affect oil price" and "what does rising oil price do to the rest of the economy?

Inflation-adjusted, the price of a barrel of crude oil was $23 in 1960, and has been averaging almost $88 in 2013. What does that do to, e.g., suburbs designed around 1960's oil prices?

Most of the interesting questions when it comes to oil have nothing to do with "what happens when it runs out?" The fun stuff is before then.

Oil will never "run out" it just becomes more and more expensive.

Where I would say that peak oil is about exactly the points you raised, and has nothing to do with running out of oil. The "peak" refers to the point where oil becomes so expensive that demand wanes and production starts to decline.

"Peak" in peak oil, at least as I understand it, refers to "peak rate of extraction." Or at least that's what Wikipedia says.

Re: "peak price" -- the punchline is that demand is almost inelastic!

Unfortunately it's not inelastic, we saw this in 2008. As prices go up the economy tanks, as the economy goes down demand goes down.

They are one in the same, really. The rate of extraction is driven by demand, which directly equates to price (supply and demand). As oil becomes harder to find, it becomes more expensive, but extraction rates can continue upward until the very last drop if people are willing to pay the price.

Well, the debate often gets off track, but the definition of the term "peak oil" is "when production stops increasing due to market demands and starts decreasing due to geologic control".

In other words, "when does long-term demand outstrip long-term supply?" The concept isn't to blame, it's just misinterpretation of it in the popular media.

At any rate, as you pointed out, the interesting question is "what does rising oil price do to the economy?".

In a free market, long-term demand will never outstrip long-term supply. Why? Because prices will rise to equalize them. As prices increase, long-term demand drops, and long-term supply increases, until they eventually equilibrate.

The problem with this description is that neither long-term demand nor supply is fixed but depends on long-term expected price.

In normal usage in economics the "long-term" refers to an equilibrium where supply matches demand. Demand never outstrips supply but instead drives up prices until a new equilibrium is reached at a lower quantity and some current petroleum users are forced into alternatives.

This is the essence of economics: the study of the allocation of scarce resources. Notice "study" as this is a completely natural process.

"Most simply, peak oil is about rates, not amounts."

See also, Arithmetic, Population, and Energy, wherein Dr. Albert Bartlett comments on the inability of most people to reason about concrete examples of exponential growth:

http://www.youtube.com/watch?v=vII-GxsrR2c

Thanks for mentioning Al Bartlett here. This video is very relevant to this post and worth watching. Al Bartlett is a brilliant man and does a wonderful job explaining the profound implications of misunderstanding exponential growth. Here is another link to his videos: http://www.albartlett.org/presentations/arithmetic_populatio...

I think batteries with the help of nanotech will eventually reach energy density approaching liquid fossil fuels, will probably be another 10 years though.

BTW - A couple of my friends recently started a recruitment company for scientists in the Oil & Gas industry, I'm helping them out with their branding/site and hosting. Would love to get your insight on what they're doing right and wrong - http://discoverinternational.com

> However, we haven't developed a viable alternative to liquid fossil fuels in terms of energy-density fast enough. That very, very deeply scares me.

Electric cars are getting there, and there is always domestic natgas production in the US. It won't be fun, but that's what we get for dragging our feet. The US had this happen in the 70's (oil embargo). It's been 40+ years. Its our own damn fault.

Oh man I couldn't agree more. I still refer back to Jimmy Cater's 1977 speech were he warned about our dependency on oil. Not just foreign oil (which a lot of people mistakenly think he said) and yet after 30 years, we're still in the same place.

Pretty depressing if you ask me.

Here's the speech: http://www.pbs.org/wgbh/americanexperience/features/primary-...

Consumer vehicles are definitely getting there, at least for high income and/or high net-worth people.

And while that is a relief, it is still very troubling to think about the implications for our transportation infrastructure as a whole (where consumer vehicles represent a minority fraction.)

How will we power our ocean freighters, our freight trains, our 18-wheelers, and our high capacity airplanes without high energy-density hydrocarbons (or with prohibitively expensive hydrocarbons)?

I can imagine nuclear and electric solutions (hand-wavy or hypothetical) to some of these modes, but could they be implemented on a global scale in time?

It makes me wonder what our transportation infrastructure will look like 100 or 200 years from now.

-In what non-obvious ways will we look backwards to people of the future?

-Will these people envy how cheaply we moved goods across the globe?

-Will they laugh at how expensive it was to move things across the globe?

-Will they even have the luxury of thinking about these things?

Exactly. A huge portion of the global economy is currently based on cheap transport of goods. What happens when transport is no longer cheap?

We adapt.

It's not an unmixed blessing, considering global warming. And there's nothing preventing people from synthesizing gasoline from other energy sources and atmospheric gases, it's just rather expensive.

I've actually looked into this in the past (synthesizing, for example, methane from the carbon dioxide in the atmosphere) but I haven't found anything that seemed achieveable from a DIY perspective. Do you know anywhere that I can get more information? It seems like this might be a good, carbon-neutral way to solve the problem of wind/solar fluctuation and (probably) would not require massive infrastructure changes (since you'd be synthesizing the stuff that cars and trucks are already designed to run on).

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