The cost of the status quo

Posted by David Roberts at 1:53 PM on 28 Apr 2008

Read more about: oil | energy | economy

We keep being told how much it will cost us to leave fossil fuels behind. Here's a little story about how much it will cost us to remain hooked:

"According to normal economic theory, and the history of oil, rising prices have two major effects," said Fatih Birol, the chief economist at the International Energy Agency, which advises industrialized countries. "They reduce demand and they induce oil supplies. Not this time."

...

"What is disturbing here is that things seem to get worse, not better," an analyst at Goldman Sachs, David Greely, said. "These high prices are not attracting meaningful new supplies."

...

The outlook for oil supplies "signals a period of unprecedented scarcity," an analyst at CIBC World Markets, Jeff Rubin, said last week.

Oil prices might reach more than $200 by 2012, he said, a level that would probably mean $7-a-gallon gasoline in the United States.

For story: The cost of the status quo
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Part of the N.Y. Times dance...

..around the idea of peak oil: The author of this piece, the Times' oil correspondent, Jad Mouawad, has previously written that peak oil ideas are "in decline", or some such; but now he actually used the word "peaked" to describe many of the world's big oil reservoirs. He still won't admit that supply is an inherent problem; but the article goes through many of the big reservoirs, and even raises the possibility that the Saudis can't produce more. He still gives us such nuggets as this, from an oil industry exec: "The world is not running out of oil, but rather it's running out of oil production capacity." Huh?

The discourse, even in the left media, on rising gasoline prices is really very primitive at this stage (as is the discussion on the campaign trail); we can't be in chronic decline, it must be the oil companies' fault! (an easy way to deal with the oil companies: nationalize them, just like most countries have done).

But Mouawad points to one of the big problems we face as oil production declines: "To make up the shortfall, the world is increasingly turning to fuels made from unconventional sources, like biofuels or heavy oil.". Yikes!

by Jon Rynn at 3:59 PM on 28 Apr 2008

Or coal

(sound of humanity shooting itself)

The 5% Project

by JMG at 4:56 PM on 28 Apr 2008

As Gore said in his recent TED talk...

"Junkies find veins in their toes when the ones in their arms and their legs collapse. Developing tar sands and coal shale is the equivalent."

http://www.ted.com/index.php/talks/view/id/243
(via earth2tech.com)

by Anna Haynes at 6:06 PM on 28 Apr 2008

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