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Comment by fleitz | Hacker News Reader

Peak oil depends on oil price, the world is awash in oil at $110. Even up to 2005 oil's peak price was $60.

Peak oil also depends on consumption, with cars like Tesla coming out we'll see a sharp decline in consumption over the next 20 to 30 years, at $300/bl a Tesla starts to make a lot of sense.

The world will never run out of oil, its price will simply continue to increase until other alternatives become economically viable, as those alternatives become viable economies of scale and capital investment will make alternatives that much better.

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This makes sense economically, but that doesn't address the difficulties we will face as oil becomes too expensive for common, important uses. Our fleet of oil-consuming vehicles won't magically convert themselves. The oil-backed electrical grid will take a hit. Food will become incredibly expensive (or more scarce) since the vast majority will come from far away, and have been transported via oil.

Oil won't be going up overnight. There will be a time period over which prices rise. As they rise various users of oil will reduce consumption as alternatives suddenly become cheaper. Hell, look at oil consumption in the US! I can't find the stats right now, but oil demand for personal transportation has been flat or dropping despite the increasing number of cars on the road.

If a gallon of gas ends up at $10 ten years from now, how much do you think people will complain about having to wait an hour to recharge their electric car? Not much I'm guessing.

Not just that. Most corn production heavily depends on oil-based inputs, such as fertilizer, fuel for machinery, and natural gas for drying and storage. Corn from the same county will become much more expensive, even without transportation costs.

Fertilizer does not come from oil. This is a myth. Natural gas is not an oil-based input.

http://en.wikipedia.org/wiki/Fertilizer#Inorganic_commercial...

Right. Hydrocarbons, then. Natural gas and petroleum have similar geologic and economic characteristics.

I hate to break it to you but pretty much everything is a hydrocarbon.

Natural gas and petroleum are about as similar as the hydrocarbons of corn and cherries.

Does natural gas exploration and exploitation have peak phenomena similar to petroleum? And does coal have its own reserves and peak phenomena?

Coal, petroleum, and natural gas are three large categories of energy hydrocarbons. If gas is cheap relative to oil or coal, then at the margin, some users will shift to gas. Prices of energy hydrocarbons will be correlated, over the long term.

Then, as coal, oil, and gas are all depleted (with their own separate peaks, perhaps), their prices will increase. Foods like corn which have many dependencies on low-priced energy (farm equipment, fertilizer, drying, and transport), will come under increasing upward price pressure.

Corn is used in perhaps a quarter of food SKUs in American grocery stores, so won't a lot of food prices go up as energy prices go up, as a consequence of peak oil (or coal or gas)?

Oil backed electrical grid? Where do you live exactly?

No one uses oil to generate any significant amount of electricity, most gas turbines are powered by natural gas, since it's cheap and plentiful. Gas turbines are only used to peak load not base load since coal is even cheaper than natural gas.

Most people spend more in fuel getting their groceries home than transporting them to the store. Food miles should be calculated by the distance to the grocery store from your home.

Not entirely true. Hawaii, for example, uses oil as the basis for most of their electric generation. They regret this now and are trying to move to renewables / natgas, but right now, they use oil.

Good point, I'm not sure if the US has enough money to take on the herculean task of providing non-oil fired generation for 1.5 million people.

There could however be a state where things just are not as convenient as they are now. There is no law of nature that says things have to stay as fun as they are now after we have depleted this unique resource that nature had to digest dinosaur bones for a few millions of years for.

Tesla's looking good though, so there's hope.

There's also the self-driving car which drastically reduces the number of cars required to replace the existing fleet.

How is that?

Imagine running trucks 24 hours a day. With no sleep constraints, you can move almost twice as much stuff with the same # of cars. Increase utilization and speed which would have great impacts on efficiency.

Those hypothetical cars and trucks would wear out twice as fast and consequently need to be replaced twice as often as before.

The world is "awash" in oil at $110, but that oil simply can't be produced fast enough to meet demand.

That's the fundamental problem.

This is provably false. If oil couldn't be produced fast enough to meet demand, the price of oil would not be $110 a barrel, it would be $110+x per barrel, where x is the maximum number of dollars people are willing to pay to use the available supply of oil.

This thinking generally leads people to miss OP's point, which is that the world will never run out of oil. Price will always fluctuate to meet demand (so long as we let the market set the price).

The oil business does not get disrupted by 3 kids in an apartment with $20K.

If you want to open an oil field or a refinery you need billions of dollars and a financial projection that says the oil will stay at $X dollars for at least Y years.

Since most people aren't convinced that oil will stay at $110 dollars for the foreseeable future they'd rather not risk billions of dollars.

If you can accurately predict oil prices stop reading hacker news and open a commodities account.

You misunderstood what I'm saying. It has nothing to do with economics or disruption. It has _absolutely everything_ to do with geology.

The hydrocarbons that become economic at higher oil prices fundamentally cannot be produced as quickly as conventional reserves. It's a matter of permeability. Not a matter of economics.

Also, I'd wager I'm far more aware than you think of the investments required to explore, develop, and produce a prospect. (I know nothing about refining, though.)

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