28 ms·

Let the peak oil hysteria from the 80s and 90s be a reminder to everyone here how fallible common beliefs are among the population.

eloff 7y ago
Peak oil theory is sound economics. We now have sufficient proven and suspected reserves that we expect that demand will tail off before supply does, so we expect that we won't have a supply crunch. But it could have possibly gone that way if the Earth had fewer extractable reserves or if humans had been less innovative in finding new methods of extraction. It really just comes down to whether demand or supply tails off first.
- jessaustin 7y ago
  Okay, well it would still be nice if we could tell ahead of time which pronouncements of "sound economics" are valid and which are total bunk. Even at the time that Peakists and oil investors (were these really different groups?) were most noisome, lots of more sober people could see the bunk.
  - eloff 7y ago
    It's basic supply and demand, which is microencomics, formally known as the non-bunk part of economics. Macroeconomics is where the bunk lives, so it's quite easy to tell - only slightly joking. I don't think anyone on either side really knew with oil how things would go. Hindsight is 20-20, and one of the two camps was going to win with 100% certainty. It's not fully decided yet mind you, peak oil could still happen if people keep increasing demand for it instead of weaning away from fossil fuels. But I don't think that scenario is likely at all.
    - jessaustin 7y ago
      I don't recall any of the original Peakist manifestos including your very reasonable caveats about hindsight and uncertainty? Really though, this is why I sort of stopped worrying about peak oil about a day after I was first exposed to the idea. It was a very absolutist disastrous sea-change phase-transition sort of scenario, and those are relatively rare in real life. (Well, at some level they are very common: everyone is conceived at some time and dies at another. These details disappear in aggregate.) It's much more common for equilibria that have been stable over decades to continue that stability, even if at slightly different locations. Lots of things are more expensive in our modern times than they used to be; somehow society has survived.
    - woodandsteel 7y ago
      It became a moot argument due to the rise of renewable energy and concern about global climate change. I really doubt that is going to change for many decades.
- Majromax 7y ago
  > we expect that demand will tail off before supply does While I agree with your "sound economics" conclusion, I think that tapering demand was not part of the "peak oil" modeling. The underlying assumptions involve no particular shift to the oil demand curve, whereas with improvements to other energy technologies (renewable energy, but also natural gas) we find that oil demanded per unit output at a fixed oil price appears to decrease with time. (The covid-related demand shock is of course not helping to bolster this curve.)
- credit_guy 7y ago
  > Peak oil theory is sound economics. Why is oil special? Why not peak iron, aluminum, concrete, NaCl, or any or the myriad other things we consume? All of them are in finite quantities, not only oil. Earth has a finite mass after all.
  - jessaustin 7y ago
    Haha, ISTR something on HN within the last year about "peak sand"[0]. All physical substances are vulnerable to this silliness: we're nowhere near "peak peak". [0] https://news.ycombinator.com/item?id=20363875 https://news.ycombinator.com/item?id=20363875
  - thechao 7y ago
    Iron, aluminum, and salt are extremely common and very much renewable. Concrete is looking like it might be sand limited, and of limited renewability; there's already concern over our long-term ability to make concrete. Oil, on the other hand, we literally burn & convert into C02, and other fun stuff. Once we use it, it's pretty much gone.
    - throwaway373438 7y ago
      > Once we use it, it's pretty much gone. Oil is as renewable as any other renewable resource. It's made from plants. We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil. It's an open question whether our access to cheap fossil fuel will outlast our demand for it.
      - deleted 7y ago
        [deleted]
      - BoiledCabbage 7y ago
        > We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil. A: Our business is running out of money we can no longer get any loans at any interest rate. B: False. You're not running out of money or access to loans. You can still get loans as long as you're willing to put down more collateral in cash upfront than the amount you're borrowing. I think see why you used a throwaway for this insight.
- codingslave 7y ago
  No. There is enough oil on the planet for another 500 years. There is no shortage.
  - woodandsteel 7y ago
    >There is enough oil on the planet for another 500 years Math please? And remember when people talk about peak oil, they mean oil that is cheap enough to be of economic use.
polotics 7y ago
This statement of yours shows a deep misunderstanding of the relationship between price and availability as it pertains to oil: less availability only implies higher price in a very local way and for very short time spans. Oil is too vital to the global economy, it's not competing against any other energy source at its scale and mode of usage, and it's availability conditions enough of all economic activity, that availability conditions affordability for all economic actors. There is therefore no correlation between availability (production volumes) and prices for oil.

eloff 7y ago

Peak oil theory is sound economics. We now have sufficient proven and suspected reserves that we expect that demand will tail off before supply does, so we expect that we won't have a supply crunch. But it could have possibly gone that way if the Earth had fewer extractable reserves or if humans had been less innovative in finding new methods of extraction. It really just comes down to whether demand or supply tails off first.

jessaustin 7y ago
Okay, well it would still be nice if we could tell ahead of time which pronouncements of "sound economics" are valid and which are total bunk. Even at the time that Peakists and oil investors (were these really different groups?) were most noisome, lots of more sober people could see the bunk.
- eloff 7y ago
  It's basic supply and demand, which is microencomics, formally known as the non-bunk part of economics. Macroeconomics is where the bunk lives, so it's quite easy to tell - only slightly joking. I don't think anyone on either side really knew with oil how things would go. Hindsight is 20-20, and one of the two camps was going to win with 100% certainty. It's not fully decided yet mind you, peak oil could still happen if people keep increasing demand for it instead of weaning away from fossil fuels. But I don't think that scenario is likely at all.
  - jessaustin 7y ago
    I don't recall any of the original Peakist manifestos including your very reasonable caveats about hindsight and uncertainty? Really though, this is why I sort of stopped worrying about peak oil about a day after I was first exposed to the idea. It was a very absolutist disastrous sea-change phase-transition sort of scenario, and those are relatively rare in real life. (Well, at some level they are very common: everyone is conceived at some time and dies at another. These details disappear in aggregate.) It's much more common for equilibria that have been stable over decades to continue that stability, even if at slightly different locations. Lots of things are more expensive in our modern times than they used to be; somehow society has survived.
  - woodandsteel 7y ago
    It became a moot argument due to the rise of renewable energy and concern about global climate change. I really doubt that is going to change for many decades.
Majromax 7y ago
> we expect that demand will tail off before supply does While I agree with your "sound economics" conclusion, I think that tapering demand was not part of the "peak oil" modeling. The underlying assumptions involve no particular shift to the oil demand curve, whereas with improvements to other energy technologies (renewable energy, but also natural gas) we find that oil demanded per unit output at a fixed oil price appears to decrease with time. (The covid-related demand shock is of course not helping to bolster this curve.)
credit_guy 7y ago
> Peak oil theory is sound economics. Why is oil special? Why not peak iron, aluminum, concrete, NaCl, or any or the myriad other things we consume? All of them are in finite quantities, not only oil. Earth has a finite mass after all.
- jessaustin 7y ago
  Haha, ISTR something on HN within the last year about "peak sand"[0]. All physical substances are vulnerable to this silliness: we're nowhere near "peak peak". [0] https://news.ycombinator.com/item?id=20363875 https://news.ycombinator.com/item?id=20363875
- thechao 7y ago
  Iron, aluminum, and salt are extremely common and very much renewable. Concrete is looking like it might be sand limited, and of limited renewability; there's already concern over our long-term ability to make concrete. Oil, on the other hand, we literally burn & convert into C02, and other fun stuff. Once we use it, it's pretty much gone.
  - throwaway373438 7y ago
    > Once we use it, it's pretty much gone. Oil is as renewable as any other renewable resource. It's made from plants. We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil. It's an open question whether our access to cheap fossil fuel will outlast our demand for it.
    - deleted 7y ago
      [deleted]
    - BoiledCabbage 7y ago
      > We're only at risk of running out of cheap crude mined from the earth with a positive net energy return at a low price. We aren't ever at risk of not being able to have oil. A: Our business is running out of money we can no longer get any loans at any interest rate. B: False. You're not running out of money or access to loans. You can still get loans as long as you're willing to put down more collateral in cash upfront than the amount you're borrowing. I think see why you used a throwaway for this insight.
codingslave 7y ago
No. There is enough oil on the planet for another 500 years. There is no shortage.
- woodandsteel 7y ago
  >There is enough oil on the planet for another 500 years Math please? And remember when people talk about peak oil, they mean oil that is cheap enough to be of economic use.

polotics 7y ago

This statement of yours shows a deep misunderstanding of the relationship between price and availability as it pertains to oil: less availability only implies higher price in a very local way and for very short time spans. Oil is too vital to the global economy, it's not competing against any other energy source at its scale and mode of usage, and it's availability conditions enough of all economic activity, that availability conditions affordability for all economic actors. There is therefore no correlation between availability (production volumes) and prices for oil.