Looking for Equilibrium in Oil's Hubbert Hysteria...if there is any...

Today on 321Energy, I found a link to an interesting historical/contextual article discussing the possibility of "equilibrium" in peak oil theorizing...also known as the "baby bear" strategy: not too utopic, not too dystopic...juuuuuust right. There's also some interesting historic points and a summary of those who say we peakoilers are crying wolf.

(goodness, how many fairy tales can I allude to in the same blog post?)

Here's a few snippets from the article by Tim Wood at the Resource Investor:

"Clearly if the present equilibrium remains undisturbed then Peak Oil is a reality. But we have more than a century of confirmation that mineral equilibria are never constant. Demand and supply are in constant flux based on cost, price and technology as the three leading drivers.

There appears to be a heathen haste to isolate oil as the one mineral that escapes market logic. Let's not forget Jimmy Carter declaring in 1977, with all the conviction a pessimist in a sleeveless sweater can muster, that it was likely that the world's oil reserves would be gone by the 1990s.

This does not rule out the impact of short-term shocks, such as the 1973 and 1979 market quakes, but in the long-run we are shown over and over that supply and demand problems eventually resolve toward something better. Just consider how oil consumption per dollar of GDP has dwindled over the past three decades.


If we're only half optimistic then we have over a century of oil left at present consumption rates. If we're half pessimistic then it's perhaps half that time in which to become less dependent on oil. Whatever your persuasion, let's not assume the trend is linear. Simply examine the exponential decrease in PGM consumption in auto-catalysts and fuel cells to see that out energy future will not be a linear event."

It's never a bad thing to sit back and take in what the folks on the other side of the conflict you are fighting are saying or doing...but to me, every bit of the "crying wolf" side's argument consists of "the market will solve the problem."

The catch is, if the market solves this problem, the population of our planet will be cut by a very large number.

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People are accustomed to thinking of "market forces" as that which makes DVD players cost less each year.

As a result, I would guess that many people would not understand why you would write, "the catch is, if the market solves this problem, the population of our planet will be cut by a very large number."

It's an alien idea that market forces could cause people to starve when they can no longer come up with the money to pay the escalating rate for fuel and food.

From a detached viewpoint, I am in favor of reducing the world's population, as long as it can be done without excessive use of nuclear weapons or other earth-destroying technologies.

From a personal point of view my feelings are quite different. I desperately want my children to live to adulthood and even perhaps have children of their own.

I don't think there is any way to resolve this paradox of double vision. It's inherent in the human predicament. Fortunately or unfortunately, my thoughts and feelings don't make a damned bit of difference. "Market forces" really will determine the outcome, don't you think?

Ralph -

From the macro POV, I think you are right. But bear in mind that the First World countries have declining populations, (US too, if you exclude immigration), world fertility is having problems due to environmental contamination, AIDS is ravaging the Third World, China is totally dependent on imports for their current growth, and global climate is in flux - and looks to be heading for some major perturbations.

It isn't "market forces" as much as it is ecological balance that will ultimately limit population, IMO.

I have been to places where people are starving - money has little to do with it. Climate is the issue, and the unnatural boxes (countries) man forces people to remain in.

In the US, we are at such a level of extreme consumption based on cheap oil that we have let ourselves become vulnerable to third world issues. Cheap oil technology is absent in poor countries, and starvation is the ecological limiter for population overshoot.

Oil price spikes may well turn out to be the limiter for overshoot in our technological society.

"Clearly if the present equilibrium remains undisturbed then Peak Oil is a reality. But we have more than a century of confirmation that mineral equilibria are never constant. Demand and supply are in constant flux based on cost, price and technology as the three leading drivers."

This quote from the linked article indirectly points to an underlying issue of economics that deserves at least a bit more attention, since I think it sheds some light on the mind set of the PO deniers/skeptics

"Peak oil", as I've understood and used the term, means simply the worldwide peak in oil production. But it says nothing about why production peaks. PO adherents (including yours truly) assume it means production peaks and declines because we've hit an absolute, geological limit on the rate of production that can't be overcome at any cost.

But historically we know that production of a given good or service can peak because it's abandoned in favor of a better alternative--the production of whale bone corsets, buggy whips, and countless other "quaint" products leap to mind as examples. (Yes, I know, there's a distinction here between renewable and non-renewable resources.)

The issue is that many PO deniers can point to a very long history of goods that were abandoned before they ran out. These people either don't understand the critical difference between renewable and non-renewable resource, or they can't bring themselves to believe that we won't find one or more silver bullet solutions.

My personal belief is that we'll hit the supply-contrained version of PO, but we'll get through it with a very complex and diverse set of mini-solutions: Conservation, possibly rationing, heavy reliance on bioenergy, more efficient transportation, more use of nuclear, solar, and wind power (in part to carry the load as transportation shifts from oil to electricity), etc.

One of the more entertaining side-shows will be how the deniers react when oil is over $100/barrel and having a huge impact.

ah but J, isn't "ecological balancing" a market force that we just haven't bad to pay attention to because of the access to cheap oil?

Once the cheap stuff's out of the earth, then we have to pay attention to all sorts of things we could assume away before...

PG, if the world ecology is a force, it dwarfs ANY manmade market...LOL! But yes, you could put it that way.

I think you already know my position. I think this will be a good thing for homo sapiens, if we do not murder each other into oblivion during the change. Long term, it will mean a better quality of life, and one more balanced within the confines of our spaceship, Earth. I am hoping it will force us to examine a spiritual and social balance that can last as well.

We have been busy trying to prove that overshoot and Liebig do not apply to us, because we are so very smart. One thing common to all previous defunct civilizations, and ours, is hubris.

I bet the Anasazi, the Maya, the Romans, they thought they were the bee's knees too. :)

That reminds me, if any of you have not read Diamond's Collapse yet, you need to do so. It is definitely a perspective changer.

Grinzo -

I am hopeful that this is what will happen. I think we stand a good chance of it working out in exactly that fashion, but it may be very painful.

Yet the next issue we will have to deal with is still there: the monetary system and current economics. The drive for profit and gathering of resources to increase profit force us into overshoot conditions. That means the rich get richer and the poor get poorer, until they revolt so that we get new rich guys and they can have a few hundred years reign.

What's your position on this?

We will definitely not run out of challenges.....

It's "consumerism versus peak oil" as a matinee feature.

I like to point out that energy use does not correlate well with happiness:


But, there have always been people who questioned the rat-race ... with little impact.


odo -

There are many more people opting out of the rat race than you realize.

Once they leave suburbia, they rarely come back, and have effectively disappeared into the "rural" or "other" statistical columns.