The Oil Drum was a community site on oil, energy supply, and energy futures, which has since closed.
Commenters remember it fondly as a thoughtful, evidence-based and civil source on fossil fuels, and urge people to read it.
Not that I advocate drilling in California, or increasing the amount of fossil carbon dumped into the atmosphere, but I'm not entirely convinced that oil prices will only go up. This has helped me in understanding a fundamental paradox of orthodox economics and the environmental movement, in particular the Simon-Ehrlich wager. I'm beginning to suspect Simon might have won regardless. He did in the time scale initially agreed on: a wager for the price of five metals in 1990, made in 1980. (http://en.wikipedia.org/wiki/Simon%E2%80%93Ehrlich_wager)
Energy is fundamental to the economy. It is very fundamental. If a future in which California decides it is expedient to extract the oil under its lands and waters is one in which there's been widespread economic disruption, it's possible that the total decrease in economic output would lower the price of oil.
As a practical matter, oil prices above $85/barrel have been identified as recessionary (http://www.theoildrum.com/node/7246). It's currently at $95.61 for WTI, $104.01 for Brent (http://www.oil-price.net/).
An early reference to the connection between energy (specifically oil) and economic ability was Admiral Hyman Rickover (father of the nuclear navy) in 1957. Profoundly insightful, and forshadowing much of what came to be associated with the ecology and counterculture movements: http://ourfiniteworld.com/2007/07/02/speech-from-1957-predicting-peak-oil/
Peak oil will happen, it's merely a question of when it will…
> I don't foresee either an energy or a climate crisis. There is a hard limit on how expensive energy gets because at some point you can turn totally renewable energy into a fuel of some sort, ideally taking CO2 out of the atmosphere to do it. It's not cost effective now because energy is so cheap. But like I said: there's a limit to how expensive it can get.
I used to agree with you until I read this terribly thought-provoking article[1]. Now I'm not as sure. It was published by the Oil Drum, a blog I subscribe to for oil industry news, so the article doesn't have a hidden agenda.
The key insight I gleaned from it was the concept of the energy cost of energy sources.
I used to think that even if wind power wasn't as efficient as oil now, eventually oil prices would rise and wind would become a viable alternative.
However, what the article showed was that wind power itself uses oil in the manufacturing of the materials, shipping and construction of the wind mills, etc. You can think of the concept of the energy return on energy invested. And as the supply of oil dwindles and costs rise, that EROEI will change.
Oil at its start had an EROEI of 100:1, which means you could get a hundred barrels of oil for the cost of using one. Now it's at 20. Wind energy has an EROEI of about 20 over the lifetime of the equipment, but unfortunately costs a lot of energy up front, and only recoups that energy over time.
So the two issues the article raises is that as the cost of oil…
Not necessarily.
If it's half, it may be worthwhile on an energy basis in a narrowly defined sense. But there are far-reaching secondary energy costs beyond this explicit accounting. How do you account for the fuel burned in the jetski that your combine operator uses in his free time, or the cost of forging the steel that went into his combine blades? We live in a global economy and in this sort of analysis, there are probably hidden emissions not noted in the study that make 2:1 EROI insufficient.
There are non-EROI issues as well. What happens if we devote all our land to biofuel production? People starve. What happens if we devote all our land to 10:1 biofuel production and it doesn't cover 1% of current demand?
We have crops with higher Energy Return on Investment, just none (so far) that are economical to produce in Iowa in order to win the Iowa caucus.
Brazillian sugarcane ethanol is perhaps 5:1.
Daytime, immediate-use solar is something like 30:1. Less when you factor in batteries.
Wind turbines around 20:1.
Hydropower is maybe 100:1.
Oil varies enormously. Used to be, sweet light Saudi crude from the Ghawar field might break 100:1. Most fields globally more like 10:1-20:1. Alberta heavy oil sands are something like 5:1. If you dip all the way down into ultraheavy kerogen fuels, solid at room temperature and demanding lots of processing, there are certainly deposits that are less than…
Your claim about 20 years required to return the energy to produce a solar panel is false. Googling a bit after "energy returned on energy invested" (EROI) indicates that there aren't really any reliable ways to measure this number. Wikipedia quotes 1.5 for the US, which seems ridiculously low.
This study (http://www.mdpi.com/2071-1050/3/10/1796/pdf) from 2011 indicates an average EROI for solar panels of 6.5, and this does not take into consideration that this number appears to be rapidly increasing for newer and cheaper panels. See article from the Oil Drum at (http://www.theoildrum.com/node/3910).
A conservative EROI of 6.5 would indicate that it takes about 4.5 years to earn back the energy to produce a panel, assuming static energy output and panel lifetime of 30 years. In short, the data I can find indicates that you are wrong.
If oil were the primary fuel for electricity generation, you'd have a solid point.
Assuming that we were to compare it to natural gas, for which you may have used oil as a proxy, this provides some substantiation to your claim:
- http://www.theoildrum.com/node/1863
But the calculations here don't reflect that peak power generation doesn't reflect peak demand. So, we've looking at adding in battery's costs too.
At the end of the day, if a greedy capitalist can make a bigger buck (with or without government subsidies) with wind than they can with coal or natural gas, they will.
Given that the efforts to bring new capacity on-line fluctuate (dramatically!) with the comings and goings of government subsidies, my guess is that they aren't quite the competitive economic wonder, at this point, that they are touted to be.
YMMV.
The reason that deep drilling is done is not because there is an abiogenic origin for that oil. There has never been evidence of oil wells replenishing themselves in human time scales. Instead, oil production from any given well always follows a relatively predictable depletion profile.
The real reason for deep drilling is that the alternative easier sources are either already mostly gone or more expensive/slower to extract.
There is still plenty of "difficult" oil left. Unfortunately there are signs that most of it is not economic to extract at prices which the global economy can support. I think this is what caused the current recession and volatile oil prices, and it is only going to get worse.
See also http://www.theoildrum.com/node/6517