First and foremost, the claim is not that oil will be exhausted, merely that production of oil will peak (several people have argued that oil will probably never run out, though usage of it will be radically different for fairly obvious reasons), and this will cause various problems. I've seen fairly persuasive arguments that the price of oil will become a lot more unpredictable, for example, and this is likely to have economic consequences if our present dependency upon it is maintained. Its not just as an energy source, either, but also the source of cheap plastics will be gone. Which might not be such a bad thing (no more plastic bags, and crappy McDonalds toys).
Second, there has been a lot of analysis of available reserves by sober consultancies (ie. one's paid lots of money by oil companies, to direct future strategy). They have concluded that reserves are overstated in many places (Saudi, Iran and Russia) for political reasons. Also that the limits of mechanical ingenuity that can provide CHEAP oil have been reached. There are all kinds of methods for extracting oil that we may invent, but the energy input required, will make them uneconomic for the majority of modern usages. At some point oil ceases to be a source of energy, and instead becomes a valuable (if expensive) source of hydrocarbons for the chemical industries.
Its quite possible that we'll find alternatives, or that there's more oil than experts currently realise. Hard to say. Currently all the alternatives moted range from the insane (biomass), to the inadequate (most kinds of alternative energy sources) - but that could change in time. If it doesn't we're fucked, though. And if we don't switch to some kind of alternative soon enough, we could go through a very uncomfortable period economically.
Its also possible that global warming predictions are based on bad science, the ozone layer is in fact fine and smoking doesn't kill you. Not sure I'd bet the future prosperity of the human race on it, though.
-----Original Message----- From: lbo-talk-admin at lbo-talk.org [mailto:lbo-talk-admin at lbo-talk.org]On Behalf Of Ted Winslow Sent: Sunday, November 16, 2003 9:09 PM To: lbo-talk at lbo-talk.org Subject: Re: [lbo-talk] Is There Anything To This Peak Oil Business?
Limits to growth arguments involve the problem I pointed to earlier with any use of axiomatic methods to reach conclusions about long run consequences.
Keynes makes this point about limits to growth arguments constructed by one of the originators of "Bedlamite economics" (Keynes's play on "Benthamite economics"), William Stanley Jevons.
Jevons expected the future exhaustion of supplies of coal and paper. Keynes claims (Collected Writings, vol. X, p. 117) that in forming these expectations Jevons "omitted to make adequate allowance for the progress of technical methods" so that, for this and other reasons, "there is not much in Jevons's scare which can survive cool criticism."
Keynes also claims the true source was psychological.
"His conclusions were influenced, I suspect, by a psychological trait, unusually strong in him, which many other people share, a certain hoarding instinct, a readiness to be alarmed and excited by the idea of the exhaustion of resources."
In the case of paper, the expectation led to an accumulation of both writing and packing paper so large that fifty years after his death Jevons's children had not used it up. Moreover, he himself did not make use of his accumulation; he wrote most of his own notes on the backs of old envelopes and odd scraps of paper "of which the proper place was the waste-paper basket."
This raises questions, by the way, about the premise characteristic of much Marxist writing that capital is everywhere and always omniscient and instrumentally rational in its pursuit of accumulation.
This includes the premise that all future consequences of present decisions can be predicted using axiomatic calculative methods. In contemporary Benthamite economics, this has been elaborated at an economics "Nobel" award level by the "beautiful mind" of John Nash.
Ted
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