Peak Oil is You
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Page added on March 24, 2012
We Don’t Consume Resources, We Create Them
One of the points that economists have a really hard time getting over, probably because it is so counter-intuitive, is that we human beings don’t really consume resources, we create them. This has implications for huge swathes of the environmental movement and also for certain parts of the Peak Oil theory.
Please note that I’m not trying to state, as no economist is, that we do not live on a finite Earth. That there isn’t some limit to the number of copper atoms available to us, or that oil or natural gas are out there in truly unlimited quantities.
The argument is, rather, that while there are indeed such hard limits to availability they are so far away from our current situation that they’re irrelevant (for example, the hard limit for tellurium is 120 million tonnes and we use 125 tonnes a year). Thus an entirely different dynamic comes into play, one in which we humans create resources by developing the technologies that make them available to us.
For instance, when the Apache Corporation began drilling in the 100,000-acre Deadwood field in the West Texas Permian basin in 2010, there had only been a trickle of production there. The deep shale, limestone and other hard rocks had potential, but for years they had not been considered economically viable. The rocks were so hard, they would have likely sheared off the usual diamond cutters on the blade of any drill bit attempting to cut through.
But new adhesives and harder alloys have made diamond cutters and drill bits tougher in recent years. Meanwhile, Apache experimented with powerful underground motors to rotate drilling bits at a faster rate. Now, a well that might have taken 30 days to drill can be drilled in just 10, for a savings of $500,000 a well.
This is a good example. A mere decade ago we would have said that those rocks are simply dead rocks: nothing useful or interesting about them other than the fact that they provide a bit of stability to the ground above. Now they’re a source of oil and gas because we have developed the technology to turn them into such a resource.
Or, as I say, we really do create resources through the advance of technology.
9 Comments on "We Don’t Consume Resources, We Create Them"
Arthur on Sat, 24th Mar 2012 5:36 pm
So via the backdoor the illusion is created that resources are infinite after all, since we CREATE them.
“Don’t worry, be happy.”
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Outcast_Searcher on Sat, 24th Mar 2012 6:07 pm
This is madness. So let’s just consume our resources as rapidly as advancing technology and BAU population expansion allows. AND – tell ourselves that we are “creating” resources even as we do so.
This will work fine — until it doesn’t. Then it is a disaster.
As Ayn Rand famously said “People tend to forget that words have precise meanings”. Consume does NOT mean create – even of third grader would know this.
Bob Owens on Sat, 24th Mar 2012 6:19 pm
This is like turning a straight guy into gay. We just have to think great technological thoughts and all limits disappear. For example we need more antibiotics to kill antibiotic resistant bugs. If we think great thoughts the new medicines will appear; only they don’t. They don’t because we are climbing a steeper wall of complexity and higher costs. This complexity/cost steamroller is true for oil drilling and any technological advances. We need to put the blame where it belongs: on us. There are too many of us using too many resources with no thought about the future.
SilentRunning on Sat, 24th Mar 2012 7:12 pm
Since we don’t consume resources, but rather create them out of pure innovation, lock all the economists who hold this absurdisy position into an 8′ cubical cell and let them “create” their own food, water and extra resources besides for the rest of us to live upon.
SilentRunning on Sat, 24th Mar 2012 7:14 pm
By the way, I note that even with all the excess “innovation”, we still have $4+ gasoline and rising. Where is the “innovation dividend”, in the form of excess oil/gas that should be making the price fall?
DC on Sat, 24th Mar 2012 7:18 pm
Actually, economists DO claim we live on an infinite planet, and so id forbes, even while claiming not too. Mental gymnastics are so much work, after all, only a madman, or a politican or economist even, can hold two completely contradictory beliefs at the same time and believe both equally. Economist have been saying since, well, forever, that the magical market can fix all problems, that ‘innovation’+ ‘free’ markets of course will do the same thing. Dont matter, over-population, resource shortages, water, land, whatever, an economist is ALWAYS available to tell you these things simply dont matter since the market will always fix them.
Sure they dont use the word in-finite, but they dont have too. 1% or 2 or 3% annual growth in GDP in perpetuity sounds a lot better right economists?
The Practician on Sat, 24th Mar 2012 7:49 pm
Right. we “create resources by developing the technologies that make them available to us”, just like we create the energy to manufacture and run all those technologies.
I don’t know about you guy’s but I have yet to see one of these Julian Simon types make a serious attempt to counter the argument that energy begets technology- not the other way around– without evading the argument entirely and falling back on bland platitudes about the wonders of human ingenuity.
SOS on Sun, 25th Mar 2012 12:15 am
Right now new technology has changed the energy picture forever. The oil and gas reservers in the USA have been revised upward in a dramatic fashion and now stand at more than a 100 yrs supply.
With a little support from the US Government energy prices could be greatly reduced along with the national debt. Royalties would cover the debt. Social Security and the budget could be balanced.
Remeber the big ones just get bigger. That should be enough time for alternatives to get it together.
BillT on Sun, 25th Mar 2012 3:27 am
The corporate elite are running scared. They KNOW that the end of their rule is coming soon and they are panicking. Mother Nature is putting a brake on their plans of world domination. They were so smart, planning and working for the day they would have a world government run totally by them. But, they underestimated the natural controls built in to prevent it. Natural resources vs population.
They likely never realized that we could be so prolific when given almost unlimited amounts of energy in the form of oil. We will add another billion mouths in the next decade or so, and another the next decade or so. By then, there will be division and wars not unification and one government. They will push for their goal until they collapse the whole system and end globalization forever.