As the evidence grows that global oil production will peak in the next decade, many Americans grow increasingly frantic to deny this possibility. Hence the campaign against speculators (an historically common response to changed conditions). We see this even by intelligent and experienced people, showing how deeply rooted is our desire not to make the necessary (and probably painful) adaptations necessary.
An especially clear example of this appears in the posts about oil by W. Patrick Lang (Colonel, US Army, retired) at his blog, Sic Semper Tyrannis. His observations about military and geopolitical affairs are IMO consistently interesting. About oil, however, he confidently tells us of things outside his area of training and experience, about which many of the world’s top experts speak tentatively — as there are alternative explanations with strong supporting evidence.
Such as those of noted oil expert Philip K. Verleger, Jr — as explained in “Explaining the 2008 Crude Oil Price Rise“, June 2008 — Excerpt:
Start from a very simple fact. The price of crude oil in the summer of 2008 should be $70 per barrel, not $140. The rise from $70 to $140 has not been caused by a shortage. Instead it has resulted from bad policies, bad luck, and incredible inattention to market details by certain officials.
… In these circumstances, policymakers have very limited alternatives.
- They can relax environmental standards. There are supplies of higher sulfur diesel that would address Europe’s current needs.
- Governments can release strategic stocks. The U.S. and other IEA members hold significant sweet crude inventories. Release of these crudes (perhaps in a swap) would relieve pressure on prices while preserving environmental restrictions.
- The U.S. can suspend the renewable fuel mandate. This action would allow refiners to boost runs and produce more diesel fuel. Suspension of the renewable fuel act would also take pressure off food prices.
Regretfully, none of these actions will likely be taken. The failure of policymakers to diagnose the causes of the crude price increase properly makes the adoption of rational policy improbable. Prices will continue to rise.
Update: Verlerger has scathing comments about the Masters and White report attributing commodities price increase to speculators. See it here.
The International Energy Agency (IEA) explained it more succinctly in its “Medium-term Oil Market Report“, 1 July 2008 (see the free slideshow here):
Like alchemists looking for a way to turn basic elements into gold, everyone wants a simplistic explanation for high prices … often it is a case of political expediency to find a scapegoat for higher prices rather than undertake serious analysis or perhaps confront difficult decisions.
Economist James Hamilton perfectly expresses my view about the causes of the 2008 increase in oil prices:
Is the price of oil today too high given the fundamentals? Could be. Is it too low? Could be. But one thing I’m sure that’s too high is the confidence on the part of those who insist they know the answer.
Langs’s posts (shown below) are worth reading, as I believe they illustrate many of the cognitive errors hindering America’s adaptation to the changes looming ahead in the 21st century. To repeat, they are interesting because of the quality of their source (Colonel Lang). They are another bit of evidence showing that America’s broken Observation-Orientation-Decision-Action loop is not just a function of the wrong President — or the wrong Party in office — or influential neo-cons. Its causes perhaps lie within us, collectively.
These are all short posts, which I believe these excerpts adequately represent. For discussion of these issues see the links in the text or those at the end of this post. Note: this site has no short-term forecasts of oil prices. The experts have done poorly enough at it during the past few years; my amateur errors will contribute nothing to that debate.
“King Abdullah and the speculators“, 15 June 2008 — This illustrates over-simplification. The Saudi Princes are playing a complex game, seeking to maximize their oil income without antagonizing their chief ally — or destabilizing their domestic political situation. Lang notes their pleasant words and token gestures (tiny short-term production increases) which have proved effective in soothing Americans as oil prices have risen from $20/barrel to over $100 — a 5x increase in 8 years. Given Lang’s background, we might expect a more subtle and broad analysis of the Saudi’s actions.
Sooo, the Saudi king is going to increase production at the margin on crude oil going into the spot market and this is expected to lower the market price on deliveries of crude to refiners. That, in turn, is expected to cause a failure in confidence in the whole nasty complex of capitalist hedge fund managers, index fund managers, bankers, advisers to same, and individual mega-investors. It is hoped/believed that this failure in confidence will cause the players to lose faith in their ability to pass the risk along to the greater fools waiting somewhere in speculator limbo. After that set of developments the price per barrel is supposed to fall, a lot. I believe this to be true. We will assemble here afterwords to gloat, or not.
“‘Speculators accused of dictating oil prices’“, 18 June 2008 — One distinguishing aspect of Lang’s posts about oil is the lack of reference (or even apparent awareness) of the vast expert literature about these issues (for a small sample see here). Everyone gets to have an opinion, but he makes little effort to support it with evidence. This is a common characteristic of blogs.
I offer the opinion that the “fundamentals” of supply, demand and all the other undergraduate economics concepts that we all remember from long ago do not adequately explain the pricing process that now prevails in the oil and financial markets.
“The Oil Meeting at Jeddah“, 21 June 2008 — Here we have “ignoring the big news”, one of the most powerful and frequent cognitive errors of American leaders. Lang’s comments about the Saudi’s are hilarious, given their announcement in April (after hints over the past few years) that they will not be increasing oil production as expected over the next decade or so. This initiates of “political peaking” of global oil production (see here for more evidence). This has resulted in increasingly alarmed forecasts by the world’s major government energy agencies (e.g., the EIA and IEA).
We are about to enter a period in which a major lesson will be taught to the world regarding the fact that market prices are more a product of mass perception and a form of hysteria than they are of “hard data.”
Greed feeds greed. Prices in oil have been rising because there was money to be made in the atmosphere of “casino” gambling fostered by the impatience of the young and ruthless adventurers who dominate the derivatives markets.
… The Saudis are going to lend a hand in that process this weekend. The amount of the increase in their production is not significant as an incremental rise in the world’s oil supply. Its significance lies in their stated intent to cripple the process of parasitic speculation in a vital commodity.
“The Oil Meeting at Jeddah -2“, 22 June 2008 — Good reporting.
“The oil bubble is leaking“, 19 July 2008 — Here we see the triumph of an amateur making a successful single short-term market forecast, made with 50-50 odds. Investment professionals do this for a living, and the market teaches them to do so only with caution — and expectation of a low batting average. His confidence that it is a long-term problem — not today’s — is extraordinary, given the fact that global oil production has been flat since early 2005 (which explains the rise in prices since then).
I told you so! Ah, that’s not very mature. Yes, but it feels sooo good. Down how much last week? What’s that again? I couldn’t hear you…
It is true that there is a severe supply and demand problem in crude oil supply, but it is a long term problem. As is often the case, the time-scape of this problem is one of the most important parts of it. There clearly is not enough oil in the ground for humanity to continue using it in the ways that we have been doing. Growing demand in newly industrialized places like China and India exacerbates that problem. The solution to the supply problem in energy lies in new reliance on different ways to produce electricity. Cheap electricity would enable short distance drivers to use electric cars and could eliminate the absurd reliance on fuel oil to heat buildings in the deep north. That would produce a very different situation. Al Gore is calling for windmills, etc., but the real solution (as he says) is nuclear power. The Greenies will have to “suck it up” and accept the idea. Hey, the French get most of their electricity from nuclear power. The Francophobe crowd should take that as a challenge.
The short term problem is not the same. This is and has been a bubble generated in the ways that have been discussed in previous articles. Short term investment in the futures and spot markets have driven prices to levels unrelated to present supply and demand. The markets have recently been a fantasy world without real limits for movement on the up side.
The bells are now tolling for that fantasy. The smart people who stand to lose from this festival of childish greed have been kicking the psychological props out from under the process of finding bigger and bigger fools.
You don’t think so? Good. It will be amusing to see how much money is lost in your disillusionment. Sometime in the next few months the price per barrel will fall below 100/barrel. It will be interesting to see how far it falls below that level.
“More oil leaking from the barrel“, 22 July 2008 — The world is so simple when one has a master narrative explaining events — that rendering one superior to experts who see the world in terms of many complex dynamics! This is one of the most common sources of error — often folly — on blogs.
The last month or so I have been watching the various TV financial market networks. Marvelous! These “analysts” by and large have no idea at all as to what really moves the various markets. They just mouth the received wisdom and describe what happened as a forecast of what will happen.
“The oil “head game” is collapsing – for now“, 24 July 2008 — Peak Oil is described by experts as a process taking place over years — or decades. Lang calls it off based on a few weeks decline in prices, what might be (who knows?) just a correction in the rise of prices extending back to 2001 (or 1998, depending on one’s perspective).
What happened to all the babble on the 24/7 news about the end of western civilization as we knew it? What happened to the images of Ali Velshi (aka – “the bald headed prophet of doom”) trudging across the Alberta tar sands, gloating over the pain?
“Kudlow – “Drill, drill, drill, so that the futures traders will flee“, 4 August 2008 — The confidence Lang’s exhibits in the first line below is classic Americana. Such confidence has worked for us in the past when tempered with the knowledge and judgement. Has our great successes in the 20th century resulted in us losing this precarious balance? The next line exhibits the ancient but enduring dream of easily manipulating markets so that they better meet our needs — to the detriment of those on the other side, in this case oil producers. Excerpt, quoting the economist Larry Kudlow:
He gets around enough in the right circles to know that short term traders in oil futures are the fire behind the crude prices we see now.
“… Ah,” he said (roughly). “Approval of drilling will frighten the futures traders out of the market and the price will go a long way down.” “They are already leaving the oil futures market” he went on. “This will push them out even faster.”
“The price per barrel – down, down, down.“, 15 August 2008 — Like most people not familiar with the operation of markets, Lang shows no awareness of the normal volatility of markets, nor the need to describe their direction on the basis of long-term trends — not short term movements. Every professional working with markets — both as investors or commercials — often finds short-term movements to be incomprehensible. Excerpt:
The TV business channel 24/7 crowd have more or less lapsed into sullen quietude over the continuing fall in the price of the oil commodity. Why? They can’t explain it in terms that they are willing to accept. Some of the anchors are restive and asking embarrassing questions that are “slapped down” as quickly as they arise.
“How to burn the speculators” – Galbraith“, 20 August 2008 — In my opinion, nothing illustrates America’s dysfunctional thinking better than calls to tap the Strategic Petroleum Reserve (SPR) in hopes of a short-term decrease in oil prices. Filled at vast expense when oil prices were far lower, it is our best protection against any one of the thousand events — natural or deliberate — that could interrupt the supply of the most vital input to the global economy. As Chet Richards notes, the SPR is the closest thing America has to a national savings account. Tapping it other than in an emergency is like eating one’s seed corn: it feels good but has long-term costs. Not only can the SPR be re-filled only slowly (to avoid pushing prices up), we might consider it too expensive to do so. Many respected analysts forecast substantially higher prices in the next few years, as new sources continued be delayed and production declines from existing fields (e.g. Cantarell, NorthSea) continue at horrific rates. Excerpt, quoting from “How to Burn the Speculators”, James K. Galbraith, Mother Jones, September/October 2008:
Finally, the federal government should burn the oil speculators by selling up to 4 million barrels a day from the Strategic Petroleum Reserve. And as economist Tom Palleyhas pointed out, consumers can help too. An awful lot of gas is stored in cars. If people stop topping off and make do withhalf a tank, they’ll back up supply and lower demand. It’s a brilliant suggestion and definitely worth a try.
Advising us to fill to only half a tank is bizarre. Since auto manufacturers recommend keeping at least a quarter tank, this means lines at gas stations as people make frequent visits. The effect will be to decrease gasoline demand while we draw down our inventory — and increase prices when we refill them. The net effect is a period of increased volatility to the long, complex energy “pipeline.” Meanwhile, the date of Peak Oil comes ever closer, while we play games that do nothing — absolutely nothing — to prepare for it.
The Hirsch “Mitigations” report — the closest thing America has to a sensible proposal for an energy policy — shows that it will take two decades to prepare/adapt to Peak Oil. The clock is running.
Afterword
Lang’s posts are among the best — informative and well-written) on the Internet about geopolitics (defining the term broadly, as I do on this site). As evidence, read some of these.
About the Presidential candidates
- “Biden is a fighter, and a screamer.“, 23 August 2008
- “Frank Rich on ‘Change’“, 24 August 2008
About Iraq
- “Will Maliki “torpedo” the peace?“, 22 August 2008
- “Can outsiders manage change in alien cultures?“, 17 July 2008
Lang has written a pleasant note about this post: “Fabius Maximus teaches us. Thank You, Fabius.”
Please share your comments by posting below (brief and relevant, please), or email me at fabmaximus at hotmail dot com (note the spam-protected spelling).
For more information about Peak Oil
“Crude Awakening: Behind the Surge in Oil Prices“, Federal Reserve Bank of Dallas, May 2008 (3.2 meg PDF) — The best analysis I have seen of what is driving up oil prices.
Here are some of my posts about Peak Oil.
- When will global oil production peak? Here is the answer!, 1 November 2008
- Links to articles and presentations of some A-team energy experts, 11 November 2008
- The most dangerous form of Peak Oil, 8 April 2008
- The three forms of Peak Oil (let’s hope for the benign form), 23 April 2008
- The world changed last week, with no headlines to mark the news, 25 April 2008
- Peak Oil Doomsters debunked, end of civilization called off, 8 May 2008
- When the King of Saudi Arabia talks about oil, we should listen, 2 July 2008
- The secret cause of high oil prices, 6 August 2008
Here is an archive of all my articles about Peak Oil.
Here are other resources to learn more about Peak Oil.
It falls into the heading of ‘American entitlement’. We are a nation that has been told over and over how special we are and that we can do anything we want and have anything we want as our birthright. Economic laws are suspended for Americans just because we are Americans.
Turning peak oil on its head reveals a much different picture. Without oil, all short distance travel would be by electric or steam vehicles. All long distance travel would be by steam trains. There would be no planes. Shipping would be less affected since wind power, coal power and even nuclear power could be used.
The social upheavals would be enormous as the populations in the cities would face food shortages due to transportation problems from distant farms. The consumer economy based on imports would collapse as ‘basic’ and cheap goods become luxury items once more.
Civilization is based on energy. The more energy created, the easier the lifestyle. Crude oil is a dead end street no matter how much we keep drilling, energy is not. There is plenty of energy but lack of will to do what is needed for the future.
My freely given opinion, perhaps worth double the price, doubts that oil will drop to $100/barrel before the election, nor afterword. Because the USD will continue to slowly or quickly devalue to reduce the bigger housing price crisis.
I certainly DO believe in “Peak Oil”, but if coal gassification or oil shale to gasoline is mid-term economic at $100/bl or so, than that backstop alternative technology provides a large new supply plateau price.
On the US demand side, $4/gal. gas, along with house asset drop (=much less wealth than expected), seems to have made a lot of people change their behavior. When this unexpected and difficult to predict event occurs, the drop in demand will drop short term prices.
But in Europe, with taxes much higher, gas is about $5-6/gal., and people just get used to it. So I also predict that non-rising gas prices will lead to fairly rapid increases in demand, and a lot of behavior reversion–although the purchase of hybrid and high mileage cars will allow as many miles to be driven with less gas.
Short term demand fluctuations cause, thru speculator/investor leverage, larger than expected price fluctuations. Supply is not going to change so dramatically, so quickly.
The thing is, “changing behavior” is exactly what obese folk, smokers, drug users, drinkers, credit card borrowers, big car drivers, and jet setters do NOT want to do. They just don’t the bad consequences, and often wouldn’t mind some laws or regulations that mostly stop other folk from doing the particular vice.
But that’s how normal folk, always have been, and are likely to remain.
.
.
Fabius Maximus replies: All reasonable things to expect. Here are some relevant details.
(1) Economic impact is all about rate of change. EU nations had years — decades — to adapt to their oil prices. The 1970’s were difficult because the price increases were immediate, which makes the shock worse (not terminal, just more difficult).
(2) As most research about energy policy shows, esp the DOE-funded “Mitigations” report by Hirsch et al, converting to alternative energy sources (like those you mention, coal-to-liquids and mining kerogen — misleading called shale oil) requires decades. They are not short or medium term pallatives.
(3) The shape of the supply curve after peaking is unknown. Individual fields often decline quickly after peaking (e.g., pproduction at UK’s North Sea and Mexico’s Cantarell are declining at double-digit rates). See “Pemex July Oil Output Falls 12% as Cantarell Declines“, Bloomberg, 21 August 2008.
Should Saudi Arabia’s Gwahar and Kuwait’s Burgan soon peak and decline at such rates, the world’s supply would decline rapidly. Data on these fields are state secrets, but this is not an unlikely scenario in the next 5 years — and highly likely in the next 10 years.
Just wondering where this came from: “As the evidence grows that global oil production will peak in the next decade”
I really don’t like the idea of peak oil production I think plateau oil production is probably a much more likely scenario. Because as far as I can tell the world uses 30 billion barrels per year(1), and the proven reserves are 1.3 trillion(2). If you do the math that’s 43 years. Additionally according to wikipedia (they site 4 sources) there is roughly 2.8 to 3.3 trillion barrels (93 years) locked away in oil shale. In short oil production may begin to plateau as the cost increases and cheaper sources begin to present themselves as viable alternatives, but it is unlikely to decline in any meaningful percentage anytime in the near future (unless there is a huge breakthrough in battery technology making it much more cost effective).
(1) Consumption (most recent) by country
(2) International Energy Outlook 2007, Figure 39: World Proved Oil Reserves
(3) Wikipedia on oil shale
.
.
Fabius Maximus replies: We have discussed this many times on this site. I suggest starting with the DOE-funded “Mitigations” report by Hirsch et al (here), which discusses this in detail.
To repeat, in brief…
Reserve data has become less useful, as you apply it, with the addition of unconventional reserves. Non-conventional reserves are not easily comparible to conventionals. Gross numbers of barrel-equivalents have little meaning. Numbers on a net BTU basis (net after extraction costs), would be more useful, but still misleading.
Unconventionals include biofuels, deepsea, polar, bitumen (aka oil sands), kerogen (misleadingly called shale oil), coal-to-liquids, and others. They are production-constrained, not reserve-constrained, due to their high capital and operating costs, resource requirements (e.g., energy, water) and environmental impacts (each has a different mix of these). Also, they require longer to scale-up than conventional sources. Hence the massive reserves, like kerogen and bitumen, have little relevance.
Two examples:
(1) Bitumen (akak “Oil shale”) is mined and extensively processed (requiring major energy input) to become a liquid fuel, in no way comparible to a field like Ghawar. It has taken 20 years to get Alberta’s output to 1 million b/day; their goal for 2020 is 5 million b/day — which might not be feasible due to resource limitations (water, natural gas) and ecological impacts. Neither of these are “political” in any meaningful sense.
(2) There is no proven large-scale commercially feasible process for mining and refining kerogen (aka “oil shale”), although some are under development. Most estimates show that decades will be required to perfect and scale-up extraction and refining of these reserves — assuming the many problems can be overcome.
Fabius, are you citing a report that says that oil shale wasn’t viable from 2005 (back when oil was only $50/barrel)?
Additionally I don’t think you completely understood the main point of my earlier post which was that alternatives when cost effective will essentially stagnate the growth of oil production. Thus a graph of oil production in the future will resemble a plateau not a peak as Hubbert claimed. Eventually oil production may decrease, but that should only happen when available technologies are more cost effective. Also based on the time scale I mentioned we should have at least 20 years to develop alternatives (though the Chevy Volt will be here in just two). Here is an interesting link to a renewable resource plan (though you’ve probably already seen the vid):
http://www.pickensplan.com/
Personally I think transmission lines, and coal plants with electric plug-in vehicles will do a lot more to curb overall energy usage (based on increases in efficiencies alone).
.
.
Fabius Maximus replies: (1) I said nothing about the “viability” of mining and refining “oil shale”. I just stated a fact about “oil shale” mining. When someone builds a profitable, large-scale plant, then we will have more information.
(2) You were quite clear. I’ll restate my comment differently. Peaking will likely occur before alternatives to conventional oil (let alone alts to petroleum) exist on a scale sufficient to “stagnate the growth of oil.” That includes unconventional liquid fuels, and substitutes such as electric vehicles. Probably years before, perhaps decades before. That is the core message of the Hirsch report — and consensus forecasts for peaking have come forward quite a bit since January 2007.
(3) I also explained above why I thought you time scale was probably not accurate.
What it all basically says is that the US has no long term energy strategy!
Of course I think the US has no real long term strategy on anything at this point. Whatever we choose it will take 10 years to have a large scale impact
but the real problem is not alternatives or technology it’s politics. We can speak of alternatives or peak oil all day long but if we cannot put in effect a plan then it’s all just hot air. Our strategy should not just to be energy independent but to become net energy exporters. Giant solar satellites, nuclear maybe even fusion power,http://www.emc2fusion.org/ for reference and once we have enough energy we can make whatever fuels that are required. But until the US is ready to set a strategy and follow through on it, we will just have to get used to having a trade imbalance and funding our enemies every time we go to the pump.
Update: Another explanation for the rise in oil prices during 2008
Such as those of noted oil expert Philip K. Verleger, Jr — as explained in “Explaining the 2008 Crude Oil Price Rise“, June 2008 — Excerpt:
“Start from a very simple fact. The price of crude oil in the summer of 2008 should be $70 per barrel, not $140. The rise from $70 to $140 has not been caused by a shortage. Instead it has resulted from bad policies, bad luck, and incredible inattention to market details by certain officials.
“… In these circumstances, policymakers have very limited alternatives. First, they can relax environmental standards. There are supplies of higher sulfur diesel that would address Europe’s current needs. Second, governments can release strategic stocks. The U.S. and other IEA members hold significant sweet crude inventories. Release of these crudes (perhaps in a swap) would relieve pressure on prices while preserving environmental restrictions. Third, the U.S. can suspend the renewable fuel mandate. This action would allow refiners to boost runs and produce more diesel fuel. Suspension of the renewable fuel act would also take pressure off food prices.
“Regretfully, none of these actions will likely be taken. The failure of policymakers to diagnose the causes of the crude price increase properly makes the adoption of rational policy improbable. Prices will continue to rise.”
ERORI is the key. Energy Returned On Energy Invested. Yes there will be oil for a very long time, but the energy cost will get higher and higher, until it reaches 1:1, then 2:1 and so on. We will still extract oil, but for essential chemicals, but the energy will have to come from somewhere else.
So what we face is an overall energy shortage and we, the World overall, particularly the Anglo-Saxon nations, are facing an energy chasm. Not enough extra energy (from other sources, e.g. nuclear, wind, etc), dwindling sources that we can buy from (as much is locked into long term contracts or exporters have less to export due to their own domestic demand), trade deficits (which means we have to borrow from others to buy what we need), declining technical and engineering resources and expertise (so we can’t even build nuclear reactors, even if we want to, e.g the UK).
The perfect energy storm.
The best laugh is the UK. Lived off North Sea oil and gas for decades, an exporter for a long time, it is an importer now. During those times of plenty it made disasterous decisions, used gas to generate electricity and shut down its nuclear industry.
And where can it get its natural gas from? Russia and Iran have the only free resources in the World (the UK is sniffing around Australia now, but everything we have is for China or domestic consumption). Bad move to diss them so much boys. I can just see a future British Prime Minister grovelling to Iran .. and getting a big fat no, not the least because China will have everything locked up in long term contracts by then.
The US is just behind them, it’s and Canada’s gas is running out (which is another reason to forget the tar sands as a solution), plus Mexico has now hit peak oil and declining in production. The sight of a future US President govelling to Russia and Iran is going to be hilarious. Plus the US probably cannot build a new nuclear reactor now even it wanted to .. unless it called in French and Russian experts .. who are all tied up with Chinese contracts anyway. Anyone looked at the average age of physicists and nuclear engineers recently? Plus who will pay for it? The Federal Govt is beyond broke, the individual States are broke, the UK is probably even more broke and Oz has debt levels that approach US ones in percentage terms? So who has the money now to do this?
What goes around comes around as some would say.
Oh I suppose the US could invade somewhere with a lot of oil, I’d bet Venezuala, but look how that turned out in Iraq?
Eventually, they will come to their senses (we are ok energy wise in Oz, pity about the water, hey maybe the US will invade Australia), but it will take a long time to rebuild and we will have to start from the bottom again. The old virtues of saving, thrift, education in the sciences, in the trades, in engineering, etc will eventually come back (the US has too much raw human talent to ever write it off), but it is going to be tough and will take a long, long time.
Fabius,
I know I sound like a broken record, but I definitely believe in what I am saying, that we (all of us, politicans and citizens) must have the moral courage to address overpopulation. I just got into Dr. Erlich’s work (population bomb), and his work is outstanding, the impact of overpopulation is dramatic on our earth and will be the foundation of all our conflicts. The sad fact, in light of the availability of family planning, we lead the world in stupidity. We actually promote population growth because we believe technology will always find a way to prevent us from being responsible. That is key, it is responsibility to each other, why have more than one or two children? The world does not need more people. Our country must level off its population at 300 million, and studies by such institutions as Immigration Studies have found that if we closed our borders and enforced the immigration laws now on the books, we would level off at 315 million. Then, we could address our myriad of problems we have here without always having to catch up. Also, I believe, we enable too many corrupt countries, such as Mexico, providing them with a “spillover pool,” so, they do not have to address their own internal problems.
Without addressing overpopulation, then we cannot fix any other problems, particularly energy. Our next oil crisis will be bigger, and that is with water. Where do all these politicans and people expect to get enough water to supply the demands for 400 million people projected in our country by 2039? They don’t, they bury their head in the sand, and use the “hope method.” They hope it goes away. It will not, and we are becoming a 3rd World nation.
Don
In our country, for good or bad, the people choose how many children to have!
China which has well over a billion people in an area the size the continental US and yet survive. I am not advocating we grow to a billion people, but many of Dr. Erlich’s predictions from a timeline perspective have not come to pass.
“Ninety percent of the resources easily available to the human race are not on this Earth. We do not live on one planet. We live in a system with nine planets, 39 moons, half a million asteroids, and a large thermonuclear generator we call the Sun.” From A Step Farther Out by Jerry Pournelle
his website http://www.jerrypournelle.com
We need a long term strategy for energy and technology. Our current leadership is unable or unwilling to say what needs to be done. We have the technology to resolve these issues, with enough energy you can produce fuel as needed or desalinate ocean water, but we do not have the national will. Perhaps a non-profit group with a futurist bent could help push the debate. What really amazes me is that Dr. Pournelle’s book was written over 30 years ago and is still applicable.
Update made to this post, as an addition to the opening:
Economist James Hamilton perfectly expresses my view about the causes of the 2008 increase in oil prices — posted on his blog, the Econobrowser, 25 July 2008 (He is a Professor of Economics at the U of California, San Diego ):
“Is the price of oil today too high given the fundamentals? Could be. Is it too low? Could be. But one thing I’m sure that’s too high is the confidence on the part of those who insist they know the answer.“
Update: an analysis by noted oil expert Philip K. Verleger, Jr. of the Masters and White paper attributing commodities price increase to speculators.
“Comments on “The Accidental Hunt Brothers – Act 2“, by Philip Verleger and David Mitchell, 10 September 2008 — Mitchell is a Professor at the U of Calgary. Excerpt:
“{This} is the worst example of junk economic analysis published in a very long time. The authors demonstrate nothing in the article. It is devoid of any intelligent content. One can make a rooster’s crow causing the sun to rise. Their report is an utter and complete perversion of what we teach in economics.“