Thursday, March 10, 2005
Wanker Of The Week
I was listening to Rush Limbaugh yesterday afternoon while on my way to a supplier, and I got to catch his take on the whole deal with the price of oil and gas. To paraphrase, he stated that he doesn't care much about such things because they aren't significant costs to him, and that people who do have concern about energy prices would be better-served by finding ways to make more money. Um-hum. As if the job market is just going to explode with new opportunities as the price of energy takes its toll on the economy.
Today, he went on to state that as oil dries-up, we'll just innovate our way out of the problem, since that's what American has always done. Except that if we wait until prices skyrocket, it might be too late. And last I checked, we've got relatively no history in this country with energy crises. It would probably be prudent to note that we hit a bump in the road about 30 years ago, and in the past three decades have mainly figured out ways to replace big sedans with bigger SUVs. Perhaps that's the innovation Rush spoke of.
What's interesting is that a report recently prepared for the US DOE seems to conflict with what Rush is stating (big surprise!):
* Waiting until world conventional oil production peaks before initiating crash program mitigation leaves the world with a significant liquid fuel deficit for two decades or longer.
Initiating a crash program 10 years before world oil peaking would help considerably but would still result in a worldwide liquid fuels shortfall, starting roughly a decade after the time that oil would have otherwise peaked.
* Initiating crash program mitigation 20 years before peaking offers the possibility of avoiding a world liquid fuels shortfall for the forecast period.
The date of world oil peaking is not known with certainty, complicating the decision-making process. A fundamental problem in predicting oil peaking is uncertain and politically biased oil reserves claims from many oil producing countries.
As recently as 2001, authoritative forecasts of abundant future supplies of North American natural gas proved to be excessively optimistic as evidenced by the recent tripling of natural gas prices. Oil and natural gas geology is similar in many ways, suggesting that optimistic oil production forecasts deserve to be viewed with considerable skepticism.
The Belmont Club weighs in with their opinion on future energy matters; unfortunately, they don't explore the possibility of a world-wide supply shortage but instead address regional shortages. While that makes for interesting conversation, I hardly feel that it paints a realistic picture of decades to come.