Wednesday, January 7, 2009

Oil Prices: Nowhere to go but down? Part 3

Wanna take on Gwynne Dyer, astute journalist from London, England, in a debate about oil prices?

On any topic?

Didn’t think so. Me neither.

I just can’t help thinking he’s being pretty optimistic when he says oil prices are likely to go down in the next 10 - 15 years (following lower demand) as oil-fuelled cars go the way of the dodo and horse-drawn vehicles.

Though he makes very good points in a recent article [see Part 2 for full details] I don’t see our move toward electric cars and bio-fuel (e.g. from algae) by a large percentage of people happening as quickly.

Why? (I’m glad you asked).

We would have to divert a lot of available fossil-fuels toward...

the production of electric cars

hydro plants to produce the necessary electricity

algae farms



[Courtesy link to photo @ Thoughts on Global Warming]

...and all of that work and diversion of resources depends upon a cooperative effort between countries and continents throughout the world.

And right now the economy sucks in many parts of the world (creating a terrible distraction from environmental concerns).

As well, cooperation isn’t always the human race’s strong suit.

China and India would also have to buy in to a bio-fuel focus, and who is capable of driving algae production right now to supply fuel for a growing world population?

Sorry, Mr. Dyer. I wish you were right. I hope you are right.

Unless I see consistent evidence of co-operative effort, however, to overcome oil-dependence in the next five years between major industrial countries I won’t see your 10 - 15 year prediction as a safe bet.

.

2 comments:

Anonymous said...

As JH Kunstler says, all these plans for alternative energies are ... oil based. So thus, they're not sustainable. Bio-fuels require massive farming machines and a lot of post-harvest processing, windmills require strange metals and plastics, solar panels ditto, electric cars ditto ... so where does that leave us?

I've just read Peak Everything by Richard Heinberg, and he finishes the book with a hypothetical letter from the future to us, now: "The economists had been operating ... on an unshakeable faith in .. supply and demand. They figured that if oil started to run out, the price would rise, offering incentives for research into alternatives. But the economists never bothered to think this through. If they had, they would have realised that the re-vamping of society's entire energy infrastructure would take decades, while the price signal from resource shortages would come at the exact moment some hypothetical replacement would be needed. Moreover, they should have realised that there was no substitute capable of fully replacing the energy resources they had come to rely on."

Is this where we are now?

G. Harrison said...

Hi Jessica,

The good news is... if oil resources were used to drive (for example) the algae-to-fuel industry, I think there would come a time when the algae-fuel or green crude could be used to produce more algae farms, thus helping it become somewhat sustainable.

Certainly, all alternatives will start small and grow slowly over time because governments aren't getting into alts in a big way in many parts of the world.

And I think Heinburg addresses a critical issue. If we 'sleepwalk' long enough (borrowing Kunstler's word) a lot of things may hit us at the same time; e.g. high population, high demand for fuel, struggling economies, high price of food etc.

I don't think we're there yet; lower demand for resources (due to the weakened world economy and new habits of conservation) may spark a period of slow recovery.

False recovery? We'll see.

Cheers,

Mr. H.