Tim Haab has a couple of posts about Peak Oil on Env-Econ blog. I learned about these via Econbrowser. With all due respect for Tim and John, I believe that one should not try to sound authoritative if one does not know enough about a topic.
First, given the time scales over which energy systems evolve and change, ten years is tomorrow and Thity years is day after tomorrow. I recommend reading the Hirsch report.
I will not get in to resources, and reserves, but one thing I must explain. Even CERA acknowledges that as times goes by definition of what we call oil is changing as non-conventional oil is being clubbed together with conventional oil.
We currently project worldwide liquids production capacity (not actual
production) to grow from 88.7 mbd in 2006 to 105.3 mbd in 2015. This
involves a growing role for non-traditional liquids—oil sands,
gas-to-liquids, ultra deep water. This represents a widening of the
definition of oil. Such a development and accords with the history of
the industry, in which non-conventional technologies are introduced
and, over time become conventional.
What Peak Oil community wants Tim and similar minded economists to understand is that the issues of transition are far more complex than economists will give them credit for. What exactly do we mean by alternative fuels for transportation? Unfortunately, we do not have a good substitute for oil.
I must recommend that Tim read Dave Cohen's post at the Oil Drum:The Tragic Consequences of the High Discounting of Oil Extraction I admit that Dave's analysis is not complete, but he makes very good points about backstop technologies and implied high discount rates of oil extraction.
If current prices are sending a good signal, why does IEA feel the need to shout every year that enough investment is not being made in energy sector?
On Stabilization Wedges: I suggest that Tim check out the science paper by Pacala and Socolow.
Tim is right when he says that prices will not peak at peak oil, but they will keep rising. This is precisely the issue that peak oil people want to highlight. John asks what should we do. There is no clear simple answer, specially when one considers that we can't think of Peak Oil as an isolated topic. What makes this whole debate complicated that in addition to providing a long term secure supply of liquid fuels, we are going to be very concerned about cliamate change. Several of the non-conventional sources of oil are two to six times as Carbon intensive. The issue is not simply of supply, but whether and how we choose to manage our demand as well.
I was very angry when I started sriting this post. In many ways, I have cooled down while putting the links together for this post, which I think is a good thing. I still think however that Tim and John need to think about this topic in a much more sophisticated manner before making cavalier comments. I recommend reading the Oil Drum and Econbrowser regularly as starters.
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