3 ms·
That's a micro scale analysis. The article is all about the macro scale. If one gas well in the North Sea runs out, you're correct someone drills another well
by VLM 5y ago
That's a micro scale analysis. The article is all about the macro scale.
If one gas well in the North Sea runs out, you're correct someone drills another well. When ALL the gas wells in the North Sea run out, thats how you get a peak of 4.5MBE/day back around the turn of the century and now production has dropped permanently to a quarter of that around 1MBE/day.
If you have an infinite supply of something, like in some areas, drinking water, then economic activity controls water bottle filling plants. If you have a finite supply of something, like in some areas, drinking water, then economic activity has no effect if the wells are dry you don't have water. Water is very heavy commodity so trade between east of the mississippi with five feet of rain per year and California deserts with no rain, is irrational or at least very economic and environmentally expensive. On the other hand you can pack a billion dollars of silicon chips into a small moving van so world trade of semiconductors still makes sense... for now.
Also some economic activity being cyclical is "OK" or manageable. But food is oil, and you can't rationally go cyclical on food. So that's a second problem with oil. If you "let the market do its thing" with STM32 microcontrollers, you'll get a year long drought of 99% of everyone has nothing but the world will go on, more or less. Try that kind of supply squeeze with food and the government will fall within days.
- throwaway09223 5y agoI agree with the macro scale perspective you're sharing. Regarding food, there's quite a bit of flexibility in food supply- we primarily produce calories for enjoyment, not sustenance. Yes, hunger will topple governments. But "letting the market do its thing" with food doesn't necessarily mean famine. It may mean shortages of specific foods which don't make economic sense. High meat prices, unavailability of particular types of fruits and vegetables. Famine is terrifying, yes. But we should also acknowledge that there's a huge amount of contraction that can happen in our food production systems before bellies go empty.
- Spooky23 5y agoHumans are reasonably intelligent agents. We adapt. Energy supply changes aren’t a black swan event. Every time there’s a price spike, the demand curve is shifted by replacement and efficiency improvements. That’s why coal is a dead industry. That’s why solar went from a rounding error to a significant player that has slowed peak electric demand. Issues like water in arid areas like the American West are very different. Personally, I’m about 40, and I don’t think there will be a serious supply-side disruption in oil/gas supply in my lifetime. I do think that we will have a significant disruption in access to fruit and vegetable supply due to brain dead US agriculture policy. And I think my kids will see grain shortages in their lifetime as the Midwest aquifers are depleted.