> -----Original Message-----
> From: wilfrid02144 <mclynch@aol.com> [mailto:mclynch@aol.com]
> Sent: Tuesday, January 07, 2003 1:40 PM
> To: energyresources@yahoogroups.com
> Subject: [energyresources] Re: Non-OPEC Peak
>
>
> --- In energyresources@yahoogroups.com, "C Morningthunder"
> <mthunder@g...> wrote:
> >
> >
> > > -----Original Message-----
> > > From: wilfrid02144 <mclynch@a...> [mailto:mclynch@a...]
> > > Sent: Sunday, December 29, 2002 9:51 AM
> > > To: energyresources@yahoogroups.com
> > > Subject: [energyresources] Re: Non-OPEC Peak
> > >
> > > The curve of global production is primarily driven by the
> > > availability of demand in the last half-century, not geology.
> >
> > Michael;
> >
> > Of course your statement above is true. Is this not the basic tenet
> > of the Hubbert Curve, or whatever curve is chosen in its stead? The
> > rising part of the curve reflects that time in which demand
> > determines the output, because the potential to supply is always
> > greater; conversely, the falling part of the curve reflects that
> > time in which the ability to supply restrains what can be demanded.
> > The curve for the lower 48 certainly would seem to affirm this,
> > turning from rising to declining in an relative instant, completely
> > in contradiction to the subsequent demand as expressed by the
> > offered price.
> >
> > Because the world is finite in a similar sense as is the continental
> > United States, the global peak of petroleum production can be
> > expected to occur in a similar manner, as long as demand continues
> > to increase or does not sufficiently decline.
|
>
> Sorry, the question I was addressing is the shape of the curve at the
> regional and global level. The US curve is not constrained by demand,
> as producers could (and did) export oil to non-producing consumers
> (Europe, Asia, etc.) However, at the global level, you have no export
> options. If demand is growing 5% per year, then you don't want
> production to grow 10% per year. Thus, the two curves have different
> causal factors and you can't equate them.
Indeed, the US curve is better named an inverted-V peak and was not constrained by demand. It grew as fast as the oil could be found and steel put into the ground. The global curve is different in shape for the reasons you state, but it promises to have the same essential characteristic of rising and falling, if present momenta continue, unless you claim the continental US to be finite and the planet not so.
I am trying to get you to address that portion of the continental US peak
that you are so adroitly ignoring, the obvious decline that challenges the
central theorem of economics, the law of supply and demand. Surely you will
not make the case that the production decline resulted because the US schemes
to wait until all the world's easy oil is used up before surprising all with
a bounteous upsurge, which is the only rational pretext that I can conceive?
If this is not the case, then, even if the global potential to supply has been
able to compensate for the decline of US extraction, we are left with supply-exhaustion,
a concept which does not, cannot exist at a critical level within traditional
economics.
 |
The predicting portion of the attached USGS model for global depletion is something that looks like the marketing of pet rocks. When they first came out many people wanted them, and the sales took off; when they realized that they had enough rocks in their back yard to give names to, sales declined, quickly, to be later replaced perhaps by an affinity for lava lamps. In such a case the law of supply and demand would be correct, because the pet rocks could have still been supplied but they were no longer wanted.
But in these attached depletion curves, both the experienced reality of the continental US and that dubiously projected by none other than the USGS at a "comfortable" future moment, we are talking about that energy which powers the tractors and the trucks, which allows the farmer to feed so many from his efforts, which in turn allows the cities to rise so gleaming and proud. We are not talking about pet rocks or lava lamps. These declines have not occurred and are not projected to occur because suddenly everybody decides they want to walk. We are talking about the supply-exhaustion of an energy quality for which there is yet no known substitute by a substantial margin, and whose importance to industrial civilization can be belittled only through extreme naïveté.
You insist, you must insist by the very paradigm through which you view the world, that supply-demand will resolve the situation, because the market must be the final arbiter of what constitutes intelligent collective human action. Supply-demand, as modified by marginal utility theory, is so central to conventional economics, that it cannot admit the concept of supply-exhaustion on any critically important level. Substitution must come to the rescue, or else the entire economic model is fatally flawed.
We may find in the future the wealthy again being borne upon palanquins carried by four men, who feast upon the flesh of those who have died as previous bearers, and you would be able to say that was a resolution achieved by supply-demand.
We cannot intelligently allow the global peak of oil exhaustion to meet us expecting supply-demand to subsequently resolve the issue. It must be resolved before the peak is encountered. That means the peak must be avoided, which can only be done if our rate of exhaustion soon enough becomes declining.
The utility value of oil for the replacement of human labor at the rate of 117 hours per gallon of gasoline, which can be reasoned to roughly equal 29 net hours when the energy cost of machinery and the necessity to have a profitable saving of human energy expenditure is included, is in the three figures in terms of dollars per gallon for the US. http://greatchange.org/bb-answer2.html The majority of the world's remaining oil is concentrated in a small geographical area with low production costs while the price of oil is set by the marginal barrel. The inelasticity of demand is significant. Because of the centrality of energy and its relative cost to the modus operandi of present civilization, a cost so disparate from its utility value, the tool of supply-demand by itself is inadequate to foster any precautionary decline in exhaustion or to embrace the transition to the phase of supply-exhaustion: it can only carry us towards the breach in ever greater waves of chaos and violence, of growth resumed and then revealed illusory.
Thus, we have the tabla rasa of an existing economic system which cannot carry us into the anticipatable future; we have only the hope that some technological complex of feats will appear in the nick of time allowing us to replace 100s of millions of years of sunlight accumulation by our own cleverness, so that we can continue with an economic system whose sine qua non is exponential growth. Certainly it is invitation to the dangers of a colossal hubris.
To contemplate the incompetence to carry us into the future of the law of supply-demand, which has been really no more profound than accepting the process of using money as being adequately intelligent, is indeed a gaping departure from the known, terrifying to many: the way of promise to others.
--
A wall of infinite dimension stands before the present course of human evolution.
It is the wise finitude of the Earth and its resources.
Steve Morningthunder
mthunder@greatchange.org
http://greatchange.org