"History's Has-been"
Columnist Robert J. Samuelson picks up on the graying-of-Europe meme: "Europe as we know it," he writes, "is slowly going out of business."
Samuelson's theme is that "It's hard to be a great power if your population is shriveling." Europe's economy is faltering, European majorities don't want to reduce the social benefits that are straining their economies, and now an increasing number of European societies want to reduce immigration as well.
"All this is bad for Europe -- and the United States," he writes. "A weak European economy is one reason that the world economy is shaky and so dependent on American growth. Preoccupied with divisions at home, Europe is history's has-been."
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A great many political hack have entire belief structures that are "proven" by the success of europe.
"It's hard to be a great power if your population is shriveling."
Samuelson doesn't back this statement in any way that I can recognize. He does make the case that a graying population AND a significant welfare state make for a bad combination. Maybe we'll see our own Social Security problems play out there first.
This type of article is/was common from Euro sources when describing 1990s usa. Whether it was crime, obesiety, health care, education (costs or quality), or what have you, it's possible to go back through the pages of vaunted European tomes to read their almost-gleeful predictions of america's demise.
Now we see it the other way. 9/11 changed america. We now act with the same knee-jerk petty nationalism that moves Europeans. We preceive the EU as a threat, we know little about it, but it collides with our worldview, and we resent it for that. It now goes both ways.
I also disagree with him that the EU const would have been merely symbolic.
Go back to the late 1970s and see how the demise of the US was predicted by people who later worked in the clinton administration (can't think of his name offhand). These gloom-and-doom "analyses" reflect poor journalism, jingoism, and probably the need to create more pages in the section (which makes better kitty litter lining).
cheers,
drf
A little too close to the "Japan's going down the tubes" prognostications from the early 1990s.
For the record, Japan continues to lead the United States in most measures of economic well being.
Not to be confused with the "Japan's going to overpower us with their yen and take over our country" prognostications of the even earlier 90s (and late 80s).
Samuelson is right, but what can be done?
You can probably select a set of data on any country or region you'd like to prove that it's in decline. How deep in debt are EU countries compared to the US?
At least they gave up on the ruinously expensive habit of Empire, which we're just starting on. Although we don't seem to be very good at it.
Never heard too much of that, joe.
So does that mean in 25 years columnists will claim "What's wrong with India?"
"For the record, Japan continues to lead the United States in most measures of economic well being."
Joe: what measures do you mean? the main measure of well being, GDP per capita, "y", tells a different story. Savings is higher in japan, but that's hardly a measure of well being.
thanks,
drf
So, if Paris empties out will I get a sweet deal on an pied-a-terre?
I'm thinking next month starts off the "China's in Decline" wave.
"Not to be confused with the "Japan's going to overpower us with their yen and take over our country" prognostications of the even earlier 90s (and late 80s)."
Exactly, Tim. These things are far more illustrative of the authors' political leanings than of the prospects of the country/region that is the apparent topic of the article.
I couldn't agree more.
Why degenerate into meaningless relative comparisons? Why not focus on what makes for a bright future for a nation, and see if we can agree on anything?
I'll start:
More freedom
Population growth
Open borders
drf,
Lifespan. Poverty rates. Unemployment rates (which supporters of the "Sick Man Europe" thesis always point to as their strongest piece of evidence).
FWIW, I'm not putting forth a position on a "Who would win a fight, Superman or Batman?" contest featuring Japan and the US.
Ruthless-
I'm with you on freedom, and maybe open borders, but why do you think a stable society needs population "growth?" Couldn't population "stability" work just as well, if not better in some ways?
Not that Europe has either one.
Ruthless:
while we all would like the "more freedom", that has different meanings for different groups.
freedom for the left wing SF party member i know in denmark = "poor people should be 'free' to vacation at mauna kea"
for the christian conservative i know = "you're free to live your life so it doesn't bother me"
for the pot-head i know = (see hippies)
for the neocons = "world empire where america controls all. domestically not much different. just don't insult policy"
for the libertarians = (ask ten, get twelve opinions)
🙂
joe - i'm lost on what you're saying. of course these types of articles show political slant. but what economic indicators do you mean?
thanks,
drf
joe:
sorry for the back-to-back posts.
while unemployment is often used, i would disagree that those three metrics are the biggies.
i just strongly disagree with your characterization of "most measures of economic well being". I'll ask our development dude at the institute, but the biggie is "y".
Jennifer,
Both Adam Smith and Julian Simon saw the correlation between economic and population growth.
Jennifer,
I agree with you. The freedom to make your own decsisions on procreation without coercive pressures is what's important, not what the final result turns out to be.
BTW, I was just watching Pink Floyd's Pompeii movie last night, a friend (and bandmate) had just gotten it on DVD. At one point Roger Waters says that the coming "economic collapse" will hit everyone at all levels. Chuckle, sigh. Shut up and bang your gong!!
Ruthless-
I haven't read the Adam Smith/Julian Simon population growth stuff, but I'm still having a problem with it. Assuming we're stuck on this planet and not going to colonize new ones, the population can't keep growing forever. Also, Adam Smith is pre-Industrial Revolution, isn't he? Maybe you needed population growth for economic growth when pretty much all work was done by hand, but now that we have machines that can do the work of hundreds of people, I don't see why population growth HAS to accompany economic growth.
Don't mean to be morbid, but the Black Plague and its aftereffects on the European economy suggests that a sudden population DECREASE can actually be good for the economy, provided there's no destruction of infrastructure involved.
drf,
I listed three above.
Per capitan GDP is an important measure to be sure. But outcomes are important, too.
I guess the term "most" depends on what you consider to be a relevant measure of economic well-being. I'm sure many people reading this don't consider our higher poverty rates to be an indication of an economic problem, and quite a few consider them to demonstrate evidence that our economy is functioning as it should.
(I'll now await the outraged "libertarians don't like to see people in poverty, you slanderous bastard!" post, and hope that it appears, as has happened in the past, immediately after the "poor people are poor because they're inferior, and that's the genius of the market, you stupid liberal" post that also inevitably appears when I mention poverty rates.)
Samuelson's mostly right about Europe, but I have trouble seeing how he gets off pointing to America as an exemplar of socioeconomic well-being by comparison. Between our:
1. Massive deficits
2. Increasingly substandard communications and transportation infrastructures
3. Acute shortage of native-born scientists and engineers
4. Less-than-favorable tax and regulatory climate for businesses
5. Upcoming entitlement crisis spawned by the retirement of the Baby Boomers
6. Dependency on low interest rates maintained by massive treasury bond purchases by Asian central banks
We're got our hands full as well. Europe and Japan might nonetheless be in worse long-term shape for the reasons that Samuelson noted, but it also might turn out to be just a matter of degrees.
drf,
Agree that an understanding of "property" may be a prerequisite to understanding freedom.
My own crackpot diagnosis is that Europe and Japan are much better suited for the upcoming era of Even More Expensive Oil than we are, and thus, our competitive advantage to the only other high-value services and manufacuting producers in the world is about to evaporate.
Of course, Really Expensive Oil will hurt China and India a lot too.
M1EK-
Are you a fellow believer of Peak Oil?
In theory, zero pop. growth would be good for a Europe that is already fairly crowded. Problem is, unless all the oldsters are going to work until they drop, I say there won't be enough productive citizens to keep their economies going, regardless of whether they slash their welfare structures. Maybe they need to pull a Logan's Run... 🙂
Of course, unstated is the accompanying problem that many Euro countries have had to import Muslim labor in order to keep high productivity--Muslim labor that refuses to assimilate and some of which appears to have dreams of overtaking the host population. Not that such is necessarily possible or even representative of the majority view in said immigrant population. Whatever the case, Europe seems to be a negative case study in the wisdom of libertarianism. And we're headed that way....
Both Adam Smith and Julian Simon saw the correlation between economic and population growth.
As has been stated elsewhere, that was in a time when economic growth = number of manual laborers, since the French Physiocrat school of Smith's day redefined national wealth to mean national production. In the information/robotic age that correllation no longer exists.
And regarding the Black Death: the Fourteenth century was a period of prosperity for the (surviving) laborers, so much so that in the countries it hit, the workers' shortage meant they were able to demand higher wages for their work, a migrant labor pool was created and serfdom, the result of an abundance of labor, began to die out. So it goes to follow that so long as the jobs themselves are not eliminated, a smaller working population means better living standards (see FLORIDA; ARIZONA; other retiree states).
So by the author's line of reasoning earth is going to be a pretty lousy place to live when the world population levels out in another 50-60 years???
M1EK,
That is my crackpot belief too. If there's any truth in Peak Oil, America is basically fucked. Hence, the Bush administration's determination to force coastal states to build dangerous natural gas ports.
Hi Joe.
I did notice you mentioned three. Unemployment i cited because, I agree with you here: that it's misused by those who want to use it as the end-all. I wasn't glossing over the other two; still, that's hardly "most". none of the growth or other models i've seen use those three metrics you cite in them. this isn't my area, so i won't say they don't exist. i just never saw them.
I still disagree with you about the others. I'm totally agree that poverty is a difficult, painful problem (and would be very pissed if you lumped me in with those others, whom we both could name). I live in Chicago where we see poverty with every El trip north from the city (Cabrini Green). life expectency isn't a good measure - my grandma lived far longer than expected, with terrible quality of life. that one is a politicized metric with dubious value, IMO.
as i said, i'll ask our growth person (my area is micro/econometrics) about this.
how about this: japanese have less leisure time than americans. they work more hours per year. that is about as useful.
i don't think most liberal solutions solve poverty. hell, here, they made problems worse. of course, most of today's conservative policies do the same, as well (to hell with the woman policies on reproduction, for example)
and FWIW, i duck and cringe when the so-called libertarians spout that bullshit about "fuck the poor" too. and i hate it when "libertarians" use the alleged free market as a tool to justify bullying. (many of them, as you've undoubtedly recognized, are in favor of torture and brutality, too)
respectfully,
drf
Okay, do we have any agreement, or are we just getting further apart?
drf,
FWIW, saying "fuck the poor" isn't bullying, it's just flippant and mean-spirited talk. It may offend you (and it may offend me), but it's just talk.
BTW, is there really a way to measure poverty objectively?
And Dave, good point. Current predictions are for population to level off and start declining everywhere, Europe's just ahead of the curve.
M1EK,I don't know what you would consider REALLY expensive oil,but the world is awash in oil.Oil shale and oil sands deposits await only a higher price or improved extraction technology to end supply anxiety.My crackpot diagnosis is that there is a moderate cap on how much higher prices can go.
Ruthless-
Uh, what were we talking about again? Something about the overpopulation of Europe causing Peak Oil to open the border with japan?
Jennifer,
I'm not an "immediate peak oiler" although some of my acquaintances are, but I think it's coming soon enough that we should at least be THINKING about it. The only rational reason to continue our current subsidization of suburban sprawl would be cheaper oil in the future for a long period of time, which is awfully hard to figure.
bill b,
Credible geologists (I don't qualify and I assume you don't either) don't believe much will happen from those marginal sources of oil.
That is my crackpot belief too. If there's any truth in Peak Oil, America is basically fucked. Hence, the Bush administration's determination to force coastal states to build dangerous natural gas ports.
As long as oil maintains a $50/barrel level, other alternatives become available. Namely, the tar sands in Canada become cheap enough to harvest, as long as the CA government allows a Nuke to come online to help with the sand boiling. At that point, Canada becomes the world's largest holder of oil reserves, 2x Saudi Arabia's current reserves.
If the price of oil goes higher and maintains that level, it then becomes cost effective to harvest shale oil, and guess who is sitting on the world's largest reserves of shale oil? 🙂
Also, with oil maintaining it's current levels, deep water exploration becomes feasible, meaning the asian and indian pacific will begin to see exploration.
Peak oil is a long ways off as long as tar sands and shale oil are made cost efficient by higher oil prices.
I have to say something here...In 1939, the Department of the Interior said something to the effect that we're all "screwed" because America only had 13 years of oil left to use on this earth...nearly 65 years later, we're at three times the production amount of that given year.
The point is, you have no idea what technologies and price incentives will do to oil production, and I am rather appalled that so many smart people are ascribing to "Peak Oil", which means making a Malthusian-sized error by assuming that current usage and technologies will remain the same and we'll will all go to hell in a little rowboat in 50 years (or 100, or whatever).
Furthermore, as to the additionally Malthusian assumption that a declining population is a good thing because of the "Black Plague example" is like comparing babies and couches. In feudal Europe, economics was a zero-sum game: if the king gave someone more, you naturally had less, and someone dying increased your bargaining power (because of the increase to labor value) to the lord. But in capitalism (not a zero-sum game) a Black Plague-esque event or negative population growth means less ideas, less people to work and innovate and grow food, and less people to add to the growth of the economy. After all, in feudal Europe, you couldn?t just walk away from your plow and start Microsoft, like you can in modern-day America, and less people means less overall well-being.
Guys, just because it'll be profitable for companies to extract shale oil doesn't mean it'll be cheap enough to save our economy, dependent as it is on cheap oil for transportation and many manufactured goods.
Let's say (and I'm making these numbers up since I don't feel like researching them) that it costs one hundred dollars to extract and process one barrel of shale oil. So companies won't bother doing it until the price of oil gets so high that it's profitable for them to do so.
Okay, the price of a barrel of regular Saudi oil is now $150. So now it's profitable for Exxon or whoever to get the shale oil. Good for them, they're making fifty dollars a barrel in profit, but that doesn't change the fact that for the consumer, oil is $150 a barrel, with all the corresponding economic problems.
By the way, Peak Oil doesn't say we'll be running out in our lifetimes; it just says that soon, demand will exceed supply, which will drive prices up so high that our economy, dependent on cheap oil, will be in big trouble.
joe,
Poor people tend to live in clusters.
For the "growth is always good" people, especially the Randroid, I'd be curious to understand how, exactly, economics can trump physics. At my current 'job, we occasionally butt into the desire of management that unpaid overtime trump physics (if you guys would just work harder, you could write software that can send 2GBps through a 1 GBps pipe), so I completely understand the mindset, but I wonder if YOU do.
And Jennifer got it, completely. Peak Oil doesn't say "we'll run out"; it says "permanently higher plateau for prices", which means big trouble for economies like ours. It won't be cheap to rebuild suburbia.
Guys, just because it'll be profitable for companies to extract shale oil doesn't mean it'll be cheap enough to save our economy, dependent as it is on cheap oil for transportation and many manufactured goods.
You're assuming that technology will remain stagnant. Technology will evolve to compensate.
By the way, Peak Oil doesn't say we'll be running out in our lifetimes; it just says that soon, demand will exceed supply, which will drive prices up so high that our economy, dependent on cheap oil, will be in big trouble.
And I'm telling you that if oil remains at $50 a barrel there are 2.4 trillion barrels of oil laying in central canada. Demand won't outstrip supply because at specific oil pricing points, 3 significant sources of addition supply come on line. We may reach peak oil for conventional land-based and shallow water drilling, but peak oil for the planet is a long way off.
Peak oil is a rallying cry for environmentalists and scaremongers.
Tom-
If oil remains at $50 dollars a barrel it's not economically feasible to get the shale oil, unless you're talking about some hard-core subsidies.
Jennifer has a point. Who cares how much oil there is if the middle class can't afford it anymore? The American Way of Life is totally dependent on cheap oil. Further, I don't remember the exact figure, but the second- and third-hand material I've read indicates that tar sands and shale oil are not feasible at anything like $50 a barrel, but rather at much higher costs.
I am rather appalled that so many smart people are ascribing to "Peak Oil", which means making a Malthusian-sized error by assuming that current usage and technologies will remain the same
I am rather appalled that so many people dismiss valid concerns with a wave of the hand. And I doubt current usage will remain the same; rather, it will skyrocket as it has been doing for decades. Current technology will improve, but will it improve fast enough?
And oil sands are a rallying cry for head-in-the-ground deniers.
http://www.thebulletin.org/article.php?art_ofn=mj05cavallo
2.4 trillion barrels of oil? Maybe if we get efficiency up to 100%. Oh, and if we don't consider how much more energy it takes to get those barrels of oil out of the ground compared to what we do today.
TECHNOLOGY CAN'T BEAT ENTROPY.
Oil has tripled in price in the last 4 years with limited damage to our economy.Technology will continue to be our saviour.
And I want to repeat: Peak Oil is not the belief that we're running out of oil; we are simply approaching the end of the time when oil is CHEAP. I don't believe we'll end up in a Mad Max society, but our standard of living is going to drop like a brick. And, while I believe that eventually some genius will come along and find a better source of nice, cheap energy, it probably won't be soon enough for US to enjoy it, though our grandchildren might do okay.
And Jennifer got it, completely. Peak Oil doesn't say "we'll run out"; it says "permanently higher plateau for prices", which means big trouble for economies like ours. It won't be cheap to rebuild suburbia.
And you're assuming stagnant technology. If oil goes to $150 a barrel (which it won't), people won't be driving trucks and SUV's that get 9 mpg. They'll all be driving cars getting 45 MPG. You're assuming that electric, fuel cell or alcohol power won't greatly increase (which they will because the return on R & D is actually realized at higher oil price levels.
I'll still live in suburbia, I'll just drive a hybrid that gets 100 mpg.
Tom-
And retooling our society to replace all the SUVs with hybrids won't cause any economic disruptions?
Hi Fyodor:
Right. I was thinking of the "fuck the poor" in the sense that we can have employers grab their asses or stuff like that because, "well, the employers own the company, and those poor devils can just get work elsewhere or dammit, start their own businesses!"
that line of "reasoning"...
TPG: right on!
No Jennifer it will cause economic growth.
Tom-
If oil remains at $50 dollars a barrel it's not economically feasible to get the shale oil, unless you're talking about some hard-core subsidies.
Please don't put words in my mouth. Reread my post of 1:41. I didn't say shale oil was feasible at $50. But the tar sands most certainly are as the biggest hold up right now is power. However, the profits at $50/barrel are enough that it makes sense to bring a nuke online to power the harvesting of tar sands. When the price starts to move above $50, now shale oil and pacific ocean exploration come online.
Bill B-
The car companies will enjoy economic growth; the poor suckers who have to buy hybrids while they're still paying off their SUVs will be a different matter.
Jennifer and Bill B:
that sounds like the "broken window fallacy"
Jennifer has a point. Who cares how much oil there is if the middle class can't afford it anymore? The American Way of Life is totally dependent on cheap oil.
The middle class can afford $50/barrel, it just seems that vehicles with low gas mileage must go by the wayside, unless the middle class is too stupid to do so. Hey - if they want to continue to spend hundreds a week on gas, let 'em. And again - you are discounting hybrids, electrics, and fuel cells. Technology always catches up.
Further, I don't remember the exact figure, but the second- and third-hand material I've read indicates that tar sands and shale oil are not feasible at anything like $50 a barrel, but rather at much higher costs.
Not true at all. Tar Sands are already harvested. They are responsible for a significant portion of central canada's oil production (approx. 35% or 500,000 barrels per day). However, for large-scale harvesting, they need a nuke. They've got an estimated 300-400 billion barrels of recoverable oil using current technology. The total reserve level is estimated at a minimum of 1.6 trillion barrels, with 1.2 trillion not currently retrievable because of technological constraints.
Oh, and if we don't consider how much more energy it takes to get those barrels of oil out of the ground compared to what we do today.
Like I've said in ALL of my previous posts, it's all dependent on WTO, COS-UN, and PGH convincing the Canadian government to bring a nuke online in central canada.
DRF-
Broken windows? Huh?
For the others, thinking that hybrids will save us forgets that gasoline isn't the only thing oil is used for. Think of its important role in manufacturing. Think of the way modern agriculture is dependent on petrochemical fertilizers and whatnot.
And just to repeat myself: I am NOT syaing that society will utterly collapse (too many Peak OIlers do, which I think is one reason why it's not taken as seriously as it should be), I'm just saying that we're all going to be a lot less wealthy for awhile.
Gawd, first 9/11 conspirators, now Peak Oil people.
I don't understand how the end of cheap oil (if it happens) would doom suburbs.
I would expect that prices would increase in a gradual fashion, (not $50 today $150 tomorrow) and adjustments would be made to accommodate. People would start buying smaller cars (see: 1970s oil crises) telecommuting would become more prevalent, etc.
Additionally, the higher prices would cause huge amounts of innovation, not only in oil, but in other energy sources, more efficient technologies, etc. At some point Bio-diesel becomes cost effective, etc.....
If gas did go from $2 to $10/gallon in a week yes, we would be fucked. But if it goes up $1 a year? Things will change, but I am not all that worried about it.
Tom-
And retooling our society to replace all the SUVs with hybrids won't cause any economic disruptions?
"retooling"? Actually, millions of people buy new cars every year without economic disruption. In fact, just recently, I purchased a car for my family and my biggest concern was MPG. I was able to find a car with >35 mpg that wasn't a mini-compact and a comfotable ride. Unfortunately/fortunately, I didn't disrupt the nation's economic machine.
No, it won't be a disruption, it would actually cause a growth spurt in the economy. If gas becomes expensive enough for a wholesale swap to higher MPG cars/hybrids/fuel cells, then the auto industry will take off, as will service providers to the auto industry, and secondary suppliers to the industry will take off, as will service providers to the secondary suppliers. Auto dealerships will be packed. Jobs will abound. And, interestingly enough, demand for oil will drop.
Amazing, that.
Hi Jennifer.
en.wikipedia.org/wiki/Parable_of_the_broken_window
TPG: that's a good keynesian analysis. well stated.
cheers,
drf
Okay, DRF, I read it, but I am not sure how it relates to this. Also, Bill and I were arguing opposite points; which of us has the broken-window fallacy? Or are we somehow both doing it?
Now we're trying to define "disruption," then estimate how flexible we can be in recovering from disruption.
I vote for great flexibility and rapid recovery.
You would expect that of a peaceful anarchist who likes "disruption," eh? The recovery will take us to a "better" place.
i think the peak oil case has some merit -- easy-to-get oil hasn't been discovered much in the last couple decades -- but the transition to higher priced oil (in real terms) will probably be so gradual as to offer very little disruption as the technology changes underneath it.
what disruption there is will come at the margins -- people who truly can't afford new-tech cars and can't afford $5/gal gas. this is not something to pooh-pooh -- if future expectations do change suddenly (as they are wont to in markets) and millions of proletarians are left in the lurch, civil unrest could be the price.
Two additional points:
Most peak-oilers are using price points of $20-$30 a barrel to define "affordable oil". Obviously, with oil at $50 a barrel and a hardly discerrnable economic effect, this is a poor attempt at definition. The NYT, one of the leaders in the MSM when it comes to peak oil stories, is most guilty. Both economic markets writers for the NYT were bashing the oil stock sectors as they were confidently predicting a return to $25/ barrel oil up until 5-7 months ago!
Until this year, most oil companies continued to perform R&D budgeting using price of oil = $25. Now, with the additional opportunities that $50 oil brings to the table, R&D moves in directions that peak-oilers never thought was possible. Tar sands, oil shale, deep ocean exploration, increased recovery techniques, increased recycling techniques....all of these combine to push peak oil even farther away. Yes, maybe peak oil for existing methodologies and technologies is approaching, but global peak oil is not. Besides, wait until we drill Antarctica 🙂
Jennifer: he was.
"All this is bad for Europe -- and the United States," he writes. "A weak European economy is one reason that the world economy is shaky and so dependent on American growth. Preoccupied with divisions at home, Europe is history's has-been."
fwiw, this is secular-bull speak which started to show up a decade or so ago. mr cavanaugh's citiation is the perfectly relevant one:
"Japan's going to overpower us with their yen and take over our country"
one of the fallacies that has erupted in recent years is europe's economic "weakness". no one addresses why the euro zone is underperforming the us.
and millions scream "regulation" -- but that doesn't make the difference some ideologues imagine. the primary, indeed overwhelmingly important difference is an colossal intermediate-term debt binge -- americans simply have seen fit to borrow themselves into oblivion, whereas european attitudes about both lending and borrowing are decidedly more skeptical.
don't judge european economic performance vis-a-vis the united states until our savings rates have equilibrated with theirs.
Anvilwyrm,
At some point Bio-diesel becomes cost effective, etc.....I,/i>
Good point. Bio-diesel plants are already producing in CA. And Waste Oil plants are not far away:
http://www.changingworldtech.com/
I fear peak oil. Remember peak copper, peak tin and peak rubber? God help us. God help us all.
Gotcha, drf. I agree.
Most peak-oilers are using price points of $20-$30 a barrel to define "affordable oil"
Which peak oilers would these be?
Hmm. Tom's quote was supposed to be in italics. I don't know what I did wrong.
There's a story at washingtonpost.com today about the boom in oil sands extraction in Alberta. The analysts cuted in the story say, with tech advances, that oil sands are (right now) profitable at $20/barrell.
Which peak oilers would these be?
Did you just stop reading my post after the quotation mark?
If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?
The auto manufacturers will just develop 100 mpg hybrids for suburbanite to drive. Heck, it will increase economic growth!
There's a story at washingtonpost.com today about the boom in oil sands extraction in Alberta. The analysts cuted in the story say, with tech advances, that oil sands are (right now) profitable at $20/barrell.
Once the process is is refined in Canada, they'll get to use it in Venezuela as well.
Mmmmmmmmmmmm tar sand.
Tom-
From what I've read, neither the New York Times nor anybody else in the MSM seems to really believe in Peak Oil; they think they're breaking bold new journalistic ground to say something like "Well, there's a possibility that maybe not all of the Peak Oilers are total lunatics. . ."
If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?
Because, as is obvious to everyone, inclding yourself (actually, it might not be obvious to you, based on your debate history), the dramatic increase in fuel costs is meted out over time.
Now, with the additional opportunities that $50 oil brings to the table, R&D moves in directions that peak-oilers never thought was possible.
which is fine, mr goiter -- but you must admit that this is a statement of faith. you assume that techne will solve your oil problems in the future because it has in the past. that isn't necessarily so. it is possible that no reasonably cost-effective technique will be devised to make shale oil saleable. the problems facing kerogen are much different than simply discovering reserves or finding a cracking catalyst.
beyond the high-cost energy-intensive recovery process, shale oil (kerogen) has different chemical properties from crude oil -- it isn't oil at all, in fact. the 'oil' that results from processing is a low-grade hydrocarbon (ie high tar/low shortchain content), very high viscosity and high contaminant -- meaning that much of the pipeline and refinery structure in existence will not handle it. it requires *huge* amounts of hydrogen gas to even be processed into this oil-like liquid. kerogen is only handled now in small quantities by refining it as a very small proportion of a crude-shale feed. it is not obvious that there will be cost-effective solutions to these transport and processing problems.
with tech advances, that oil sands are (right now) profitable at $20/barrell
Uh... then they're not exactly "profitable" right now, are they? If the technology doesn't exist yet?
Well, we can all argue this until we're blue in the face. We have all read enough documentation to "prove" our side. Guess we'll just have to wait and see. I, for one, am not content to cross my fingers and place all my trust in technology that doesn't exist yet.
Remember the Simpsons episode where all the teachers went on strike? The parents were going nuts having to keep their kids all day, so they had an emergency meeting where Flanders opened the envelope containing the Emergency Plan for dealing with a teacher's strike: "Hope that by then technology would have come up with teaching robots. Have them teach the kids."
I smoke, and I know it's bad for me, but at least I'm not deluding myself by saying, "Hell, by the time I need to worry about lung disease technology will have invented a way to cure that!"
fwiw, profitability is only one side of this. the australian project in the stuart shale is breakeven around $20/bbl -- but produces only fuel oil and naptha. to find a way to produce gasoline out of this process adds much higher levels of expense.
joe,
Watch out, that seeming hypocrisy can work both ways. Speaking for "my" side, taxation is coercive and thus interferes with economic activity. That's true whatever you tax. As I think TPG addressed, a sudden and huge decrease in oil reserves is not likely. Even if it becomes harder to find new reserves, the increase in price will be gradual. Technological and lifestyle changes will ost likely have plenty of time to adapt. Back to a gas tax, true raising gas to $3 a gallon wouldn't likely cause our economy to "collapse." But since it's coercive and disruptive, why do it? Well, I'm actually in favor of taxes on mechanisms that clearly violate the rights of third parties in an unavoidable commons. It's the violation of the rights of others, and that only, that justifies the force of law.
drf,
Right. I was thinking of the "fuck the poor" in the sense that we can have employers grab their asses or stuff like that because, "well, the employers own the company, and those poor devils can just get work elsewhere or dammit, start their own businesses!" that line of "reasoning"...
I know it's off topic, but if I don't think ass grabbing should be more punishable than it would be normally because someone endured it for years because they preferred enduring it to quitting his or her job, I hardly see that as saying "fuck the poor." And unless you favor a government program that guarantees everyone a middle class job, you would be subject to the same charge by your own logic. (BTW, the one time I remember this discussion coming up, it concerned a TV producer who quite likely made far more at her job than the national average, much less was "poor")
which is fine, mr goiter -- but you must admit that this is a statement of faith. you assume that techne will solve your oil problems in the future because it has in the past.
Technology may not "solve" the oil problem, but it's damn sure going to postpone it for a long while. Not only that, it's going to provide alternatives to oil, some of which have been discussed in the thread, some of which we haven't discovered yet.
But in the end, I'll bet on technology and all of the options that come with it, rather than doomsdayers talking about peak oil.
Gaius, it's not a statement of faith when it has proven itself right time and again. I think rod said it best: a lot of people have said over history that X commodity will "run out", and that's just not the case. The case is that, despite dire predictions about oil every 5 years since, oh, 1940, we have made each drop of oil more efficient in the sense that we used to "burn off" about 70 percent of it, and now we "burn off" about 10 percent or less. There's no reason, given historical and technological trends, to think that this won't be the case.
Even if it is not the case, however, Peak Oil does deserve the same treatment, as rod so well put it, as "Peak Rubber" or "Population Bomb".
But Jennifer, what IS it you propose to do now about future oil shortages? Forcing conservation would be ironic since you'd merely be bringing about the harm right away that you're supposedly trying to forestall in the future, no?
But in the end, I'll bet on technology and all of the options that come with it, rather than doomsdayers talking about peak oil.
Not saying doomsday, Tom; I'm just saying a serious economic slump.
Fyodor:
there was another time something like this came up where the whole point was that "the poor have to tolerate this because they're poor and they have no choice". it was not for more or less legislation. It was about those who use the name "libertarian" to justify whatever they want in the name of some faux economic, philosophical, or political slant.
and yes, there was a "fuck the poor" attitude. i don't want to dig through when this might have been (probably summer 2004 or earlier).
yeah it's off topic. and i'm not going to get into a purity test discussion, either. you commented on that thread, as did joe and jennifer and thoreau. dan and rc were on the "abusive bosses are okay" side. if i recall.
(i have no idea why your comment just now annoyed me so much)
Uh... then they're not exactly "profitable" right now, are they? If the technology doesn't exist yet?
Uh, read the article. They've been producing and profitable for awhile on the surface deposits. It's the deeper deposits that will take some technology to enable large-scale production.
From the article:
"Companies here are producing increasing amounts of oil from this unconventional source -- about 1 million barrels a day. If all of that oil went to the United States, it would amount to roughly 5 percent of daily consumption. In 1995, oil derived from the sands was less than half the current amount. Alberta officials expect production to triple from today's level by 2020."
One million barrels is well beyond 2003 levels, which was the last time I was reading these production reports in detail.
Fyodor-
That's the problem; I don't know HOW we can get out of this corner we've painted ourselves into, at least not without seriously expanding the power of the government and limiting individual freedom. And the government would just make matters worse, no matter how hard they attempt to do otherwise. I, personally, am taking steps to shelter me and mine from the serious economic downturn I expect in a couple of years.
It's funny, though; one anti-Peak Oil article I read basically used your question as proof that the problem doesn't exist, by saying something like "You can tell Peak Oilers are nuts because they offer only problems, no solutions." Brilliant logic--if a problem seems unsolvable then it doesn't really exist.
Additionally, I'd like to mention that, as a political group, libertarians as a whole are usually painted as Pollyanna types with "too much" faith in mankind and all of our wonderful inventions and productivity, but when Goiter and I make some kind of statement about how the market and humanity will take care of itself and present an optimistic face, we're smacked down faster than Tina Turner. I thought libertarians were supposed to be the skeptics about junk science like Peak Oil, not its most zealous followers.
"Because, as is obvious to everyone, inclding yourself (actually, it might not be obvious to you, based on your debate history), the dramatic increase in fuel costs is meted out over time."
So you'd predict no harm, and significant benefits, to the economy if the gas tax increase was phased in over time?
fyodor,
I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.
Ayn Randian-
Why do you say it is junk science when others claim that the demand for oil is growing faster than the supply?
In feudal Europe, economics was a zero-sum game: if the king gave someone more, you naturally had less, and someone dying increased your bargaining power (because of the increase to labor value) to the lord.
Actually, economics have never been a zero-sum game; it was only perceived to be so throughout most of history because wealth was generally measured only in terms of a single commodity, gold or silver, ie. ready cash. This is why it was believed, for example, that Spain was the wealthiest and most powerful nation in Europe in the 16th century; the New World silver mines allowed Phillip II and his heirs to spend huge sums on armies, navies and other tools of empire. But Spain bought most of its wheat and other essential goods and eventually the costs outweighed the cash frow from Mexico. By 1650 Spain was a has-been.
England, on the other hand, grew its economy precisely because it was not a zero-sum game and through the cottage industries of the late Middle Ages (home spinning of woolen cloth, for example) it increased productivity. The point about Microsoft is untrue: a wool dealer setting up a network of home-based spinners to produce the more valuable cloth in the 1400's was no different from Bill Gates for his time. Raw wool was originally sent to Antwerp; by the early 1500's most English wool was being spun domestically to bring profit to the local merchants. In turn, the peasants found they had other options to plowing the fields to make money.
fwiw, profitability is only one side of this. the australian project in the stuart shale is breakeven around $20/bbl -- but produces only fuel oil and naptha. to find a way to produce gasoline out of this process adds much higher levels of expense.
There was a story on NPR a couple of weeks ago about the Colorado Oil Shales. Apparently one of the oil cos (BP?) has a new process for extracting the oil from shales. The said the could extract for about $20/bbl. I wondered what further inputs were required because it seemed that it would not be profitable until the world price was $55-60/bbl. They have set up a pilot plant now, but now there is a possibility of going to a commercial scale.
Your post went some way towards enlightening me as to what further costs might be involved, thanks.
Although producing only fuel oil and naptha is a good start since it means that less of "the good stuff" has to be diverted for that purpose.
My whole point is that environmentalists have been saying for decades that food demand would outstrip supply, right? And yet, we have higher per acre yield than could have ever been imagined with less land being used for farms every day. Why? Technological achievements made land more efficient. To me, I see no difference between land and oil, if we can make one (land) about 1000% more efficient, then there's no reason we can't have (and, in actuality, have been making)those same gains come to oil.
Gaius, it's not a statement of faith when it has proven itself right time and again.
you're abstracting, mr randian. "technology" is not a universal. the specific problems of developing kerogen from rocks into 87-octane gasoline have never been tried before recently and may not have reasonable and cost-effective solutions.
"technology" advances -- obviously. but hidden in "technology" advancing are millions of dead ends, problems without solutions and failures. making gas of kerogen might be just that.
the broader question of developing energy sources for the future is something else again. i'm sure mankind isn't going to fold up and go under for a lack of oil. the transition to what-comes-next, however, may be very painful and even violent (as many such changes have been in the past). there's no point in hiding from that.
Randian, farmland actually produces the product, year after year after year. This process can be made more efficient.
Oil fields don't actually produce oil. They contain oil. They will not make any more, and no technology is going to change that. Making them more efficient isn't like making wheat plants produce more kernels; it's more like making threshers pick up the little bit of grain that gets scattered.
Ayn Randian-
There's some overlap between Peak Oilers and environmentalists, but not completely; I'm the former but not much of the latter. Is there some reason for dismissing it as "junk science" other than "people have been wrong in the past, so they must be wrong now?"
And again: FUEL EFFICIENCY IS NOT THE ISSUE. The issue is that the demand for oil will be greater than the supply. And it's not just gasoline: it's plastics, it's fertilizers, it's a LOT of petroleum-based stuff.
Now, an end to cheap manufactured goods and super-cheap food isn't going to mean Armageddon; it's just going to mean a considerably lower standard of living than the one which Americans have come to view as our birthright. So when I say Peak Oil is coming, THAT is what I'm talking about. Please don't confuse me with the "sky-is-falling" Peak Oilers who I've already said are doing the subject more harm than good by basically predicting the end of industrial civilization.
Jennifer-
I suppose it would be more accurately termed "junk economics" because, while demand and supply can vary in the short-run, long term supply and demand equal each other. Always.
Whether this transition will be painful, I have my doubts. As it was said, oil prices are not going to jump 5$ a gallon tomorrow...they will gradually rise (assuming, of course, we continue with both present consumption AND present technological abilities) and will eventually be phased out as some daring entrepreneur develops a cheaper way to grab a larger market share. If oil becomes too pricey, just like if a certain type of food or computer software might, then consumers will switch brands and upstarts will give "Big Oil" some serious competition. That's how markets work, that great term of "creative destruction".
So you'd predict no harm, and significant benefits, to the economy if the gas tax increase was phased in over time?
Of course. Tax increases are a negative sum game in the economy. However a lengthened time period reduced and draws out the impact. Oil price increases that lead to energy intelligence or diversification, while initially bearing some R&D costs, will be a long term positive sum game to the economy.
But Ayn, when you're talking about switching food or computers, you're talking about manufactured (or at least grown) products. How can you switch "brands" of oil? "Shit, ExxonMobil's running low; I'd better go to Shell?"
Also what do you mean "long-tern supply and demand are equal?"
they will gradually rise (assuming, of course, we continue with both present consumption AND present technological abilities)
this can be assumed, mr randian, if you choose. but commodity prices need not move smoothly, even on longer-term averages. a radical change in future expectations can cause a paradigm shift in pricing without the physical supply and physical demand suddenly shifting.
I think, actually, Jennifer, the problem comes in that you are assuming that after millennia after millennia of rising living standards for people all across the globe, you are now (like it or not) Chicken Littling the idea that, all of the sudden, (or gradually), our living standards will decrease sharply. It isn't God's gift in the form of oil that gives us our great living standards, it's the free market and the innovation of mankind. The only reason now we use oil so heavily is because it's the easiest thing. When it ceases to be so, we will use something else to not only maintain but continue to raise our standard of living.
And yes, I do tend to think that when a group can only provide problems with no viable solutions, there (historically) has proven not to be that much of a problem. Isn't this "constant crises" and "all the world is going to hell" kind of thinking that Reasonistas are supposed to be against?
"long-tern supply and demand are equal?"
he means you're right, in a way, ms jennifer -- global economic activity would crash to nil, along with oil demand, if oil supply was suddenly and largely removed.
If a dramatic increase in fuel costs can so seamlessly, painlessly be assimilated into the American economy as TPG, Anvilwyrm, and others suggest, why not raise the gas tax to $3.00/gallon and eliminate the national debt?
Actually, from an user side innovation standpoint I expect the increasing the taxes on gas would have very much the same effect as the costs going up due to scarcity. As the price goes up people will find methods to use less/more efficiently. I bought a Prius because it will save me money at $2/gallon. At $.5 a gallon why would I pay the extra cost?
The problem is that a tax would have no effect, indeed probably a negative effect, on supply innovation. Consider: if oil is $100 a barrel due to production costs I can make lots of money if I figure out how to get oil (or an oil substitute) for $75. But if the production cost is $50 and there is a $50 tax the consumer still sees $100/barrel, but I can't make any money with my $75/barrel technology.
As an added problem, you now have the government *requiring* people to use lots of oil to make ends meet. Just like governments which *need* cigarette taxes and traffic fines. Great strategy. If everyone stopped smoking and speeding tomorrow, Maryland would be SCREWED!
Also, please point out where I said seamlessly or painlessly. I think there would be pain, but the pain is what would MOTIVATE the changes required! I would LOVE to stop using oil, but until it is too expensive, or something else is cheaper, it just ain't happening.
If prices go up, things will change. Some people will do better, some worse. Major disruptions are unlikely unless things change FAST.
TPG, I agree entirely with your last post. Which is sort of odd.
Jennifer, what I mean by that is simple economic fact: the amount of goods demanded in an economy equal supply, in the long run. Radical price changes (i.e. a "going out of business sale"), a sudden spike in supply etc. can all affect supply or demand in the short term, but the first rule of economics (other than there is no such thing as a free lunch) is that Supply = Demand in the long run. This is why total GDP will always equal the amount the United States spent on goods and services (minus savings, but even then it can be argued that those savings are used as loans to purchase goods or invest in capital).
But Ayn, when you're talking about switching food or computers, you're talking about manufactured (or at least grown) products. How can you switch "brands" of oil? "Shit, ExxonMobil's running low; I'd better go to Shell?"
Think of Oil as Campbell's soup. Think of sealed cans as Tar Sands.
Think of Bio diesel as Chunky Soup. Think of Waste Oil as ramen noodles. Think of electric cars as mom's homemade. Think of fuel cells as takeout won ton from the chinese place down the street. Think of hybrids as Progresso.
When Campbell's gets too expesnive, you're switching foods.
But, in the mean time, those sealed cans are making campbell's last longer.
Ayn Randian-
By that logic, people sholdn't have talked about the population decimation of the Black Plague; keep pointing out the problem of people dropping dead without offering even one plan to stop it.
And to say "millenia of rising living standards" isn't quite accurate; living standards in the ROman Empire were in many ways higher than in the same parts of the world after the Empire fell and the dark ages took hold.
But the main point is that oil is different. How? There is nothing currently known that can provide the huge amount of energy as oil (compared to the energy it takes to produce it); nor is there anything as cheap which can be used to produce so many things. Sure, there ARE plenty of alternatives for oil; they'll just be a hell of a lot more expensive.
And seriously, to insist that a decline of American living standards is an impossibility seems to me like the junkiest economic theory of all.
Chicken Littling the idea that, all of the sudden, (or gradually), our living standards will decrease sharply. It isn't God's gift in the form of oil that gives us our great living standards, it's the free market and the innovation of mankind.
except that that isn't just "chicken littling". western civilization has been spectacularly successful -- but so were the persian and roman and mayan once. our fate lies with theirs, unless you believe we're divinely ordained and "special".
the issue is one of timeframes. in a long view, the west has done remarkably well. in a longer view, it will inevitably collapse and stagnate. in a yet longer view, humanity has by a series of civilizational cycles managed to progress from primitive nomadism to where it is. in a yet longer view, that need not continue -- the impulse to civilization is not necessarily irreversible. in the longest view, humanity will someday go extinct.
can anyone say what progress is in that context?
I think, Jennifer, we are talking about two different things. For the time being , living standards in terms of take home pay could be raised greatly through all kinds of economic protectionism, but technology and society, while wealthier in the relative sense, objectively suffer as a whole by missing out on "what could have been". I think, therefore, that when I discuss a raise in the standard of living as a certainty, I mean it in the sense that progress cannot be stopped, and we have no choice but to better off than our parents and grandparents. Whether or not we're better off relative to other countries because of our heavier usage of oil than they, that's a different story.
Well, I guess the Supply=Demand thing is true, then. If some monster weather anomaly killed all the world's crops this year, the demand for food would start off greater than the supply, but once a bunch of people starved to death everything would leve off.
I mean it in the sense that progress cannot be stopped, and we have no choice but to better off than our parents and grandparents.
this is a myopic fallacy, mr randian. you extrapolate the recent past into the future. if you had asked most people at the bottom of the depression, they'd have told you that capitalism was doomed to anarchy and destruction; because you sit at the end of a long winning streak, you think everything must get consistently better even on a generational timescale.
it isn't so.
My last post ws written before some of those preceding it, so it appears out of place in this thread.
Ayn, maybe progress cannot be stopped, but there's quite a possibility that we'll be forced to define "progress" as "figuring out clever ways to make do with less."
Oil fields don't actually produce oil. They contain oil. They will not make any more, and no technology is going to change that. Making them more efficient isn't like making wheat plants produce more kernels; it's more like making threshers pick up the little bit of grain that gets scattered.
*sigh* Joe you can do better than this.
1) There are sources of oil and oil substitutes we are not using much at all. Tar sands, bio diesel, etc. These can be used to "produce more oil." This is the equivalent of finding ways of growing grain in deserts.
2) People require about the same calories/day as they did in the past and will in the future. *Demand* is constant per person, or increases. Technology cannot do much about this. With oil it is possible, and common even, to come up with ways of reducing the demand per person. Cars can potentially be made 10x more efficient. People do poorly on 200 calories/day.
Last party I went to had 5 priuses (priui?) in the yard.
3) Just about oil products have no-oil based substitutes. Read about the cornstarch based plastics? They become viable as oil prices increase.
joe,
I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.
First, "pain" is a rather vague term. It pains me to know that my former associate in weird, underground music is now trying to croon like a second-rate Bing Crosby. But...HE'S GOT THAT RIGHT. That's why we libbers talk in terms of violations of rights rather than nebulous and subjective "pain," and why I would restrict punitive taxation to violations of rights in an inevitable commons.
Next, as I said to Jennifer, it's rather ironic to cause with certainty now the "pain" one is ostensibly trying to forestall in one hypothetical version of the future.
gaius,
How would you compare the periods of innovation with those of little innovation? Would you say the innovative periods were marked by more individuality, or less?
on this last point -- i'm unsurprised that many here would feel progress is mandatory. it's part of the cult of the new and the young; as an article of faith, for one to believe that the past isn't worth learning about, listening to or living by, one must think that the future is inevitably better.
one cannot emphasize how new (in historical terms) this opinion is in the west. very few espoused it previously to the 18th c, and it only became popular opinion in the 20th. before that, the new was viewed skeptically and cynically by the vast majority -- which, whatever else it may be, is a viewpoint very good for a stable society of laws.
such a view is predicated on a society that has experienced massive technological advancement in its recent past, as ours has. similarly, the greeks and romans had made such spectacular advances in technology over their times that the view became endemic to classical society as well -- corresponding directly with the breakdown of law and order that characterized the rise of the roman universal state and ultimately the collapse of hellenic civilization. after a violent period of total anarchy, stability became fashionable again and advances in techne nearly universally rejected as dangerous -- "devil's work", in the parlance of the times.
i'd bet the same fate awaits us in a few centuries time, along with the destruction of the cult of the new and the arresting (for an age) of widepread technological development.
Would you say the innovative periods were marked by more individuality, or less?
transitional, imo. progress is not willy-nilly -- it takes a healthy respect for systemization, criticism and rigor to spark such advances, and those are not the hallmarks of self-indulgent revolutionism alone. but obviously, the artist/scientist must have room to work and explore, and that takes a degree of freedom within the law.
i think the ages past -- 15th-17th c -- were actually the peak of rapid scientific principles in development in the west. techne has advanced since at pace, i know, but consider the revolutionary nature of the laws and principles discovered between bacon and newton.
I've thought of something else to add to this on my drive home. A fuel-efficient car like a Honda Civic gets double and a bit more mpg than a monster like an Excursion or a Suburban.
The higher gas prices go, the more pain that those giant jackasses driving those SUV's feel. GO GAS PRICES!
I wouldn't be supporting a higher gas tax - and the pain it would cause - if I didn't believe the alternatives were more painful.
Joe you might get by fine with whatever it is you drive with high gas taxes. But don't forget pretty much everything you own was delivered to you or a store where you bought it from by truck. You know trucks run on gas. Airplanes they run on gas too. Not to mention all the other things that require oil to produce. On top of all that the government might be LESS LIKELY to fund or allow alternative energy, it would destory their revenues.
Whats more painful than having to pay a lot more for just about everything????
living standards in the ROman Empire were in many ways higher than in the same parts of the world after the Empire fell and the dark ages took hold.
I'm not sure how true that is. For a couple centuries after the fall of the Western Empire, sure, but overall? No. The Eastern Empire continued on, and until the Fourth Crusade in 1204 (when the crusaders sacked Constantinople) was better off than the old Roman Empire had been. And even in the West, standards of living for the average person had probably gotten back up to Roman standards by the time of Charlemagne. The fall of the Roman Empire was mainly the death of high culture and a wealthy upper class, which looks from this distance like a collapse. But mostly technology continued to advance (except in certain fields like architecture), and standards of living continued to rise. Again, the aristocracy in medieval Europe wasn't as well off as the upper class in the Empire had been, but the peasantry was probably better off.
our fate lies with theirs, unless you believe we're divinely ordained and "special".
I don't think you need to think that Western civilization is divinely ordained or special to think that it's going to last for a long, long time. Yeah, it's going to collapse at some point. The question is, when? I think that there are a good many centuries left in us yet. For a historical parallel, if I had to draw one, I would say that we're at the point classical civilation was at near the beginning of the Christian era. I think that America has been playing Rome to Europe's Greece; the US is still a young nation in many ways, and our vitality is a long ways from spent. Even then, at the beginning of the Empire, there were many bemoaning the loss of the old virtues of the Republic, and predicting the downfall of Rome. And Rome did fall, five centuries later. But it lived on, in Byzantium (as I noted above), for another millenium. Mixed with other ideas and civilizations, yes, but classical civilization lasted for a long time.
As to Peak Oil . . . I don't think it's going to be a big deal. I think that had restrictions on oil refineries not been in place for the last two decades, we'd never have noticed. The problem, as I see it, is that India and China have both started demanding more oil, and the infrastructure hasn't had time to adjust to it. Had we been building new refineries since the 70's, we might now have the reserve capacity to handle it. But we don't, and it will take a few years for the infrastructure to adjust.
For that matter, there are many other sources of energy out there. Oil is good for mobile applications, like automobiles, but coal and nuclear are better for electricity generation in the long run. In the longer run, we're going to probably switch to natural gas more and more; as someone (Jerry Pournelle?) noted, we've been moving towards higher and higher carbon-hydrogen ratio compounds over time (wood -> charcoal -> coal -> oil -> natural gas -> ?). You can release more energy from the low-carbon compounds, with less pollution from them. Hydrogen would be ideal in many ways, and I think we'll eventually switch to it for mobile applications, but there are hurdles in distribution and storage there. Plus, as several people have noted in the thread, in Jerry Pournelle's words, "There are far better things to do with all those lovely hydrocarbons in oil than putting a match to them." It'll work out, and I don't think that we're going to see much of a decrease in standard of living. Maybe there will be opportunity costs, in that our standard of living won't be as high as if there had been a limitless supply of oil, but we're not going to face a major crisis. In my opinion.
Some here claim that faith that the market will solve the energy problem is basically hoping for a miracle.
This would be true if we didn't know what the alternate sources of energy will be. If we were hoping for fusion power, that would be the case. But we're not. The chain of progression to alternate fuels is already clear. We KNOW we can provide all the power we need, given a high enough price for energy.
For example, we can use nuclear power to electrolyze water, produce hydrogen, and power vehicles. We can do it today. We don't because it's too expensive. We know we can produce almost unlimited amounts of electricity with nuclear power. We don't, because we're afraid of it and for various reasons the public has rejected it. We know we can get energy from solar and wind. We don't, because it's more expensive than the alternatives.
As the price of oil-based energy goes up, two things happen: First, previously uneconomic reserves come on line. Oil sands, oil shale, deep wells, etc. Second, the high profit potential of exploration will open exploration in more remote and/or expensive areas. Deep oceans, etc.
That's the supply side. The higher price will also drive demand for alternative sources of energy and increase conservation and efficiency. That will improve the demand side.
If we have to, we can replace ALL our oil energy with alternatives. The Canadian nuclear industry has produced a paper showing what it would take to convert the entire U.S. transportation grid to hydrogen: You can put 175 or so CANDU reactors in Nevada. They can use spent fuel from current nuclear reactors along with new fuel, and because they are right by yucca mountain you get rid of waste transportation issues. These reactors would electrolyze water from lake Mead and produce hydrogen, which would then be pumped in pipelines to end users. Extreme and expensive, yes. But possible. No magic required, no blind faith. Just a knowledge that if energy gets expensive enough, such solutions become feasible.
The next question is, "Will expensive energy destroy our suburban standard of living?" Consider this: Oil consumption in the U.S. today is about 2.8% of GDP. In 1980, it was 6% of GDP. Oil could double in price to $100/barrel, and we would still be paying less for it now than we did 25 years ago. Or more to the point, if oil doubles in price over 10 years, the net effect to the economy assuming nothing else changes would be a decrease in GDP growth of about .28% per year.
But of course things will change. If the oil price spike is permanent, you will see the demand and supply situation change as outlined above. We now have the technology to dramatically improve the amount of oil used in transportation through hybrids, plug-in hybrids, hydrogen, and electrical power, and transportation represents 75% of our oil use.
No gloom and doom. A long-term shift in the market, perhaps slightly slower growth until we convert fully to an alternative, and life goes on.
Here's my opus:
With respect, I don't believe in the Peak Oil hypothesis either. Someday the use of petroleum may become rare, but I don't think this will be any more disruptive than Peak Wood or Peak Whale Oil were.
I changed my previous thinking 180 degrees after reading through Julian Simon's The Ultimate Resource 2. I am now convinced that neither depletion of resources nor overpopulation can be a long-term problem. (Some posters said that Adam Smith lived too early to anticipate the crises we currently face, but Simon just died a few years ago.)
In a nutshell, the trend is that we become better and more efficient (as well as more enviro-friendly) at obtaining the raw materials we need. Eventually, the improvement of the extraction process may near diminishing returns, but that also createst incentives to seek out or invent alternates. It will spur research that, relatively speaking, was not economical before.
There is no such thing as a "natural resource." Ayn Rand said that, and it was one of the things she got right. There is no such thing as a natural substance with inherent and irreplaceable economic value. The ultimate resource is the human mind. A human mind figuring out a use for a "natural resource" is what gives that resource its usefulness.
It's been said many cavemen must have frozen to death while sleeping on seams of coal. Petroleum was once nothing but a sticky, poisonous polluting nuisance. Right now we're sitting on zero-point energies, or sonofusion, or something we haven't discovered yet, or (most likely) something destined to be the next Crucial Natural Resource that I just personally haven't heard of yet.
This isn't Pollyannaism; it's history, and human nature, and the way the world works. Our situation today is a continuation of a trend, not a unique break from the trend. In absolute terms, we have more people than ever before, consuming more resources than ever before, but in relative terms we are becoming more efficient and creating more resources than ever before.
Even if you believe the majority of people are useless and doomed to poverty, in absolute terms we are producing more geniuses and innovators and inventors and potential world-savers than ever before.
I know it's counter-intuitive. Surely we'll eventually run out of something we can't replace -- room if nothing else. But the trend is that we become better and better at doing more with less. Net, we create more than we consume.
We may have temporary localized crises and shocks, but the ongoing trend is clear.
Of course, this is a market-based solution, and it assumes that governments won't step in and really muck it up to exacerbate and perpetuate the crises. The Gas Crisis of the 1970s was caused by government policy. (I remember living through that, and never would have imagined it would be followed by an oil glut.) Our foreign policy and bad local governments keep a lot of Africans poor and starving.
But barring massive, bad government intervention, I don't believe in an impending serious decline in American living standards due to a sudden shortage of affordable oil.
We're more likely to bore our extremely spoiled grandkids with tales of sitting in a 30-foot-long 1970 Ford Galaxie 500 that got maybe 10 miles per gallon, waiting in line to get gas back when whatsizname, Carter or Nixon, was president, and you kids today have no idea how easy you have it. That car didn't even have air-conditioning, must have been 110 degrees in there...
Addendum: "Surely we'll eventually run out of something we can't replace -- room if nothing else" should have had quotes marks around it, as representing the conventional wisdom.
Stevo-
Well, I do hope you're right. Actually, in a way I *KNOW* you are--certainly at some point there will be either an invention or a discovery that will make petroleum technology look as obsolete as stone technology. I don't doubt that at all. My concern is that this discovery won't be made for us who are alive right now.
I mean, made IN TIME for us who are alive right now.
Also, consider that if we do continue following divergent sources of non-oil-based energies, competition and market pressures should speed innovation and reduce prices.
As for nuclear power -- i know that the waste is the biggest deal, but what about the idea I mentioned last week? Disposing of the stuff in subduction zones on the ocean floor?
http://www.econlib.org/library/YPDBooks/Jevons/jvnCQ.html
Jennifer, I have to admit there is room for short-term pessimism, since I did say, "it assumes that governments won't step in and really muck it up to exacerbate and perpetuate the crises." Like, what are the odds of something like that happening?
For anyone who wants information on Canadian tar sands, this is a good article, if a little old. An important point to note is that the tar sand production was brought down to $12 a barrel or so, for the easiest-to-reach oil; what held up Canadian production was the risk that Saudi Arabia would drive oil prices even lower, to something like $10 a barrel. That doesn't seem to be a major risk now.
Incidentally, it's useful to remember how oil reserves are counted. If I understand the process correctly, a country's or corporation's oil reserves is the amount of oil it has that it can access profitably. Thus, when the price of oil goes up, world oil reserves also increase--because more of it is profitable to extract.
Stevo,
I love you, man.
Thanks, Ruthless. But you're still not getting my Bud Light!
Those who think nukes can power the American dream through the magic of hydrogen are forgetting:
1. Hydrogen cars are a joke. Problems with energy density can't be wished away by libertarian economic theory either.
2. Uranium reactors - we'd run out of uranium pretty quickly.
3. Breeder reactors - we'd run out of life on earth pretty quickly (we'd have effectively weapons-grade plutonium all over the place).
4. Renewables splitting water - this can happen at small scales, but nowhere near what we need.
The only thing that would help is drastic reduction in energy usage per person. There is no fuel on even the THEORETICAL horizon with the energy density of gasoline.
Goodbye, suburban sprawl.
Now, electricity for non-transportation uses? No problem (at least in the short-term). But we'd better be building these nuclear plants and renewables while we have really cheap oil. What? It's too late? D'oh.
The Babushka's crooning like Bing Crosby? Now THAT'S pain!
Randian, you're arguments seem to be based on one big an homimem - people who are concerned about peak oil are environmentalists, and environmentalists are wrong about everything. Ergo, what they say about oil supplies must be wrong, too. Or the organic fallacy. Or bad hygeine. Or something. Anyway, it's not a very good line of reasoning.
TPG, one of your posts reads like a parody of conservatives thought - "I just bought a new car with good gas mileage. Everyone should just pick a car with good gas mileage when they buy a new car." Let them eat cake, is what.
We'll never run out of uranium. It's all through the crust, and huge quantities are in sea water. There's enough uranium in seawater alone to power the entire earth for several thousand years. And we know how to extract it.
Also, the cost of uranium fuel is a tiny percentage of the cost of the output power, so huge price jumps in the cost of the fuel have a relatively small impact on the price of delivered energy.
Plus, uranium exploration is still in its infancy. If the demand for it goes up, we'll find lots more.
The 'uranium shortage' is just an anti-scientific bugaboo promoted by the anti-nuke crowd.
As for breeder reactors killing us through proliferation, remember - If you're using the reactors to create hydrogen, you can locate them all together. You can put 200 reactors in a geographically small area, and the fuel never leaves the site.
If you believe that oil is going to run out, and especially if you believe in global warming, uranium is the ONLY power source we currently have that can take the place of fossil fuel. Time to dump our fears and superstitions and approach the problem logically and intelligently.
"If you believe that oil is going to run out, and especially if you believe in global warming, uranium is the ONLY power source we currently have that can take the place of fossil fuel. Time to dump our fears and superstitions and approach the problem logically and intelligently."
No, if you believe that oil is going to run out, and especially if you believe in global warming, rebuilding our economy to be less energy intensive is the only way out of this mess.
Even if I agreed with your claims about uranium (I don't), you still have to solve the energy density problem, rebuild the fuel-delivery infrastructure throughout the country, etc. Rebuilding the suburbs, as monstrously expensive as that would be, would actually be the CHEAPER choice of those two.
Actually, "rebuilding the suburbs" would mean, in real terms, no more than allowing future growth to take one form, and not another. It would require little or no investement that wouldn't have happened otherwise, just putting that investment into one kind of development and not another.
Instead of adding 10 units by building a new subdivision of 10 homes on acre lots, add 10 units by putting new housed in between the houses in an existing subdivision. Instead of adding a few thousand lane miles of roadways, put a trolley system in the middle of an existing roadway.
Actually, it's a lot cheaper to build infill houses in a developed area, because you save the cost of new infrastructure.
"rebuilding our economy to be less energy intensive is the only way out of this mess.
Good idea, M1EK, maybe we can form a People's Central Committee to make us all do the "responsible" thing and live on little collective farms so we can save energy. And hey!, we can even have government mandates to "ration gas!" Brilliant!
We can call it "The American Great Leap Forward".
Seriously, you talk about "rebuilding our economy" as if it can be controlled centrally (or should be) rather than the fact about economics that a little Scottish gentleman pointed out, that markets work on this cute thing called "personal choice" and the invisible hand.
Randroid,
You have me confused with somebody else, obviously. I'm the one who knows that the suburbs got that way because we effectively outlawed more urban development with the one hand and subsidized sprawl through massive pork-laden highway projects and over-reliance on property taxes with the other one.
"Actually, "rebuilding the suburbs" would mean, in real terms, no more than allowing future growth to take one form, and not another. It would require little or no investement that wouldn't have happened otherwise, just putting that investment into one kind of development and not another."
Joe,
I usually agree with you, but you're smoking crack here. How are you going to build houses between existing McMansions in CulDeSac Estates?
No, if you believe that oil is going to run out, and especially if you believe in global warming, rebuilding our economy to be less energy intensive is the only way out of this mess.
Ridiculous. First, fully 25% of our energy consumption is non-transportation related. Of our transportation-related energy use, much of that is used up shipping goods around the country and around the world. Even if you eliminated every personal auto and mandated that people ride bicycles, you couldn't cut our energy consumption in half. That just pushes the problem down the road, doesn't it? If you really believe in 'Peak Oil', then cutting our energy consumption in half would simply flatten the curve a little and give us a few more years in which to pay the piper.
But here's the real problem: If the U.S. suddenly cut its oil consumption in half, do you know what that would do? It would depress the price of oil, which would encourage its use elsewhere. China would get cheaper energy at our expense, and they'd use more of it, and nothing would be solved. That's the economic reality of a fungible resource in a global economy.
Even if I agreed with your claims about uranium (I don't)
Feel free to refute them with facts.
...you still have to solve the energy density problem, rebuild the fuel-delivery infrastructure throughout the country, etc.
Not as big a job as you would think. With current technologies, the hydrogen delivery infrastructure to serve 40% of the light duty fleet is likely to cost about $500 billion (Argonne National Laboratories). Totally replacing the gas station infrastructure with hydrogen is likely to be 1-2 trillion. That's 10-20% of one year's GDP for the U.S. Of course, we wouldn't do it in a year. It would be a slow change over maybe a 20-30 year period.
Rebuilding the suburbs, as monstrously expensive as that would be, would actually be the CHEAPER choice of those two.
Did you just pull this out of a hat? You're going to rebuild every city in America, and you think this would be cheaper than building a hydrogen pipeline and fueling station infrastructure? Here are some actual numbers, instead of the hand-waving you are doing: The total value of residential real-estate in the U.S is 12.4 trillion dollars. Much of that is in the suburbs or in rural areas. Mind you, that's just residential real-estate. That doesn't include the value of the shopping malls, businesses, roads, parks, power grid, and all the rest of the suburban infrastructure. And of the stuff that's in the city, much would have to be destroyed and rebuilt to accomodate higher-density living.
So let's think about the cost of destroying the suburbs, rebuilding the cities, building all-new high density transportation infrastructures, and all the rest. What would it cost? 50 trillion? 100 trillion? 200 trillion? Let's be clear about this: getting rid of the suburbs is NOT AN OPTION. IT WILL NOT HAPPEN. If the U.S. devoted 10% of its entire GDP to this massive project, it would take fifty to two hundred hundred years. If it just devoted all GDP growth so as to maintain the current standard of living, it would take at least two centuries and maybe a millienia. And here's the real flaw, if you don't like the economic argument: It would take a massive amount of energy and raw materials. MASSIVE. It would take hundreds of years just to recoup the energy expended to restructure America.
And of course, the only way you could do this in the first place is at gunpoint, since you aren't going to convince a couple of hundred million people to just give up their homes and move into the crowded cities.
This is the kind of pie-in-the-sky thinking from environmentalists that just drives me batty. You'll ignore or refuse real alternatives that we can implement today and hold out for a wild fantasy of a dream that will never happen.
"You'll ignore or refuse real alternatives that we can implement today"
My irony meter exploded. You owe me a dollar.
1. Hydrogen cars are a joke. Problems with energy density can't be wished away by libertarian economic theory either.
Yes, yes they are. But they won't always be. Most problems with hydrogen cars are solvable. Using some good numbers for future technology (i.e., not too optimistic, not too pessimistic), you can build a good hydrogen car powered by a fuel cell at the cost of a modern car. And it'd be cheaper to run. The main problem with hydrogen cars isn't energy density per se, but the fact that there's no easy way to store hydrogen. You can reduce trunk space if necessary to store enough hydrogen to run your car; it's not as easy to make the fuel tank light enough and cheap enough to be an alternative. Not to speak of the explosion risk if the pressurized fuel tank is punctured, or the flammability of hydrogen. There are solutions to these, but as of yet they're too expensive for commercial use. But there are no theoretical limits to the use of hydrogen, just unsolved problems with its use.
No, if you believe that oil is going to run out, and especially if you believe in global warming, rebuilding our economy to be less energy intensive is the only way out of this mess.
Actually, "rebuilding the suburbs" would mean, in real terms, no more than allowing future growth to take one form, and not another. It would require little or no investement that wouldn't have happened otherwise, just putting that investment into one kind of development and not another.
See, and the gloves come off. "Playtime's over, kiddies; you've had your cheap-energy fun. Now it's time to grow up and listen to the experts, and let us rebuild the world correctly."
I simply don't see any reason to think that we're near the end of human innovation. Why build a future based on the most conservative projections of what is possible? Had we done that in the last century, there'd be no computers today, no Green Revolution, no jet aircraft, no moon landing. We can't give all of you solutions to the problem of Peak Oil (if it's there), because we don't know them. If we did, none of us would be here talking about it; we'd be starting companies to exploit our great new idea. We don't even have to know the answers as a society, because we'll find a way to cope. And probably find a way to prosper. I don't think the solution is, "I don't see any way that this would work, so why even bother trying; we'll just have to make do with less." That's a pretty horrific attitude to have; making do with less sucks for Americans, but is devestating for developing nations.
M1EK said:
"You'll ignore or refuse real alternatives that we can implement today"
My irony meter exploded. You owe me a dollar.
Ah, the quick cheap-shot-and-run. The sure sign of someone who got caught talking about things he didn't understand.
By 'implement today' I didn't mean we'll change to a hydrogen economy overnight, or even necessarily that we'll use hydrogen. I was speaking generally of being realistic in our approach, and today that means that if you are serious about getting rid of greenhouses gas or solving the oil problem (if you believe there is one), nuclear is the ONLY option. Whether that means hydrogen fuel or electric cars or trolleys or whatever, the fact is, we need dense, 24/7 energy that can supply peak demands. Nuclear fission is the only energy source we have today that can meet those needs in the quantity we need and which we have the capability to build economically.
But rather than talk about real solutions, you'd rather just use "Restructure society!" as a mantra to put off thinking about hard choices. Like it or not, the suburbs are here to stay. Eliminating every SUV on the road and replacing them with CAFE average cars saves you a whopping 1-3% of transportation energy. Doubling the CAFE standard of passenger vehicles might save another 15-20%, but even if all new cars were twice as fuel efficient tomorrow, it would still take 12 years to turn half the fleet over (the average lifespan of cars currently on the road). So even if we took draconian measures to improve energy efficiency and conservation, we're still talking about playing around with the margins. MAYBE we can cut our energy usage by 20% within 20 years, except that our energy consumption is predicted to grow by more than that due to population and economic growth. So the best you could hope for is maintaining the status quo. And if you're a 'peak oil' believer, or you believe that greenhouse emissions are a huge problem, the status quo won't suffice.
If you've got any other big ideas, I'd love to hear them, but the stuff you've talked about so far is pie-in-the-sky handwaving and denial of reality.
Dan,
I consider your argument a "pie in the sky" approach which exploded my irony meter because you continue to fail to address the PHYSICS issues which prevent the hydrogen economy from providing free and easy suburban motoring. Not the ECONOMIC issues, but issues of ENERGY DENSITY.
Get it?
Energy density is certainly a problem, but it doesn't make hydrogen power unusable - just inconvenient. If a hydride storage tank is used in a hydrogen car, it would be about three times the size and four times the weight of a standard gas tank. So maybe your hydrogen car has a tiny trunk, and carries 350 extra pounds of hydrogen, or maybe hydrogen cars start to look like station wagons so the storage tanks fit. Hydrides have other problems, so maybe we won't go that route. Maybe we'll use some other way of sequestering the hydrogen. Or maybe we'll have hydrogen hybrids that have small tanks, pluggable electric motors, and slightly shorter ranges.
The point is, these are engineering issues. If hydrogen turns out to be non-feasible, perhaps we'll use nuclear power to make electricity, bio-diesel to power to the cars, and start making pluggable hybrids that run on bio-diesel. The point is, the energy problem WILL be solved, but as of today nuclear is about the only option we have for a source point of high-density power if we run out of fossil fuels.
But you don't like to think about that, so instead you'll nitpick every solution to death and sit on your hands waiting for the glorious day when we completely destroy our infrastructure and rebuild on some magical zero-energy framework, right?