From The Cost of Energy Blog, there is an excellent Energy Roundtable discussion on the Financial Sense New Hour site that is definitely worth a listen.
The audio is available in multiple formats, including MP3, so you can download and listen to it in whatever way is convenient.
3 Comments
Thanks for the great link! Just listened to it and noted a few surprising comments, at least to me:
Simmons thought that any kind of supply disruption in the U.S. would lead to a run on the banks. He didn’t explain exactly why, but used the example of gas running out in Houston during hurricane Katrina. Can anyone give their opinion about why people would cause a run on the banks?
Someone used the example of America needing the equivalent of another Pearl Harbor event to get woken up to the reality of peak oil. This would cause panic situations like 1973; stocks might crash; most people would not understand what was happening and react in unpredictable ways. Anything the government can do beforehand to warn us will alleviate panic later.
They all agreed that internal demand by developing countries, especially OPEC countries, due to increased growth, fast infrastructure development, higher standards of living, and mostly the government subsidies of gas, are causing the growth in demand worldwide. The U.S. and OECD demand curve is flat or going down. Also, these rapid-developing countries, like China and India, will very soon become the “main cause” of global warming, as opposed to the U.S. and Europe. Gas in places like Iran, Venezuela, and Mexico are $0.50 to $1.00 a gallon. In London, Simmons said, it was about $9.00.
There was a ton of infomation. I wasn’t pleased that it didn’t come off as a roundtable solution-oriented discussion. Most of it seemed like three separate monologues, with each speaker making some very clear and important point, followed by another speaker doing the same about some totally different point. I think it would have been nice if the moderator forced everyone to respond to a particular issue before diverting to a new issue.
Overall, it was extremely valuable to get these three experts talking live.
I didn’t get the run on banks thing, either. Although, I guess if there were a general, nationwide panic, people could do lots of irrational things, including a bank run. I thought that was a particularly weak point.
One big concern about future exports is explained by the Export Land Model put forward by Jeffery Brown at The Oil Drum. If this theory is correct, the increasing consumption of provider nations will cause the actual decline rate to importer nations to be much higher than the actual geologic rate. So, from a U.S. perspective, we could see much higher decline rates in available oil than the 2-4% often predicted because the producing countries are using the rest themselves. I think there is at least some merit to this argument.
The comment about $9/gallon gas in London is interesting as it shows how inelastic gasoline demand can be.
There certainly were not a lot of solutions discussed, but that is often the case with Peak Oil discussions as there don’t seem to be any easy solutions. Any solution you can think of seems to have major problems and it is going to take a lot of different mitigation efforts being done at the same time. But, it would be nice if we could start focusing on explaining the available mitigation strategies and their problems so we can hammer out some kind of plan. But, since the public still doesn’t seem to be aware of the problem, most efforts are focused on public awareness and I suppose that is justified. The Hirsch report has some strategies outlined, as they mentioned during the conversation.
One thing I don’t like about a lot f Peak Oil discussions is how much disdain their seems to be towards economics. Economists are not completely clueless, at least some of them understand the issue and I don’t see how we can address the problem without using economic tools.
Hi, all. I run The Cost of Energy, the site linked to at the top of this story.
I didn’t get the bank run thing, either. I’ll have to go back listen to it again. Possibly Simmons was using that as just an example of how panic can cause a run on a resource?
Being a card-carrying economist, I’m also more than a little upset by how economists are routinely portrayed by peakers as being utterly clueless. I like to point out that geologists or other non-economists are at least as clueless about how markets work as economists are about natural resource issues.
By the way, if anyone here wants a copy of a presentation I gave to a local Sierra Club chapter on the basics of peak oil, feel free to grab a copy and send it along to others:
http://www.grinzo.com/energy/downloads/theoilcrunch09x20x2007.pdf
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