[Agren]

I can't find it, maybe I'm just being stupid, but does that link really work? Or do you have to subscribe to get the article?

[marek]

Yes, you have to subscribe to the journal (you may try getting it through a university library computer system).

[Agren]

dang, I was curious... do you have the full name of the article? Or is it called "Energy is not Separable"?

[marek]

Here is another good article by Andrew McKillop.

[linlithgowoil]

Why do economists, on the whole, dismiss Peak Oil and say it will never happen?

Why dont they say that it will happen (based on the evidence of all now declining oil producing countries)?

Surely, if they have faith in the 'market', when oil depletes and is too expensive, 'something' else will simply step in to fill the void - problem solved by the mighty invisible hand.

So - why do so many economists vehemently deny that Peak Oil will happen and expect oil production to go on forever? Is it because they know that oil (energy) is the pre-requisite for all other economic activity? If so - then they must know, deep down, that oil is NOT just another commodity - it is the pre-requisite for most other commodities in the modern world. If they think this, then their classical economic theories must obviously be wrong.

Its strange, because economists and market specialists etc. always advise people to 'spread their risk' in investments, and yet they feel quite safe in placing all our future 'energy eggs'... in one basket...

[Such]

two words:

status quo

[slick50]

I think that people are scared, deep down inside. A retired friend of mine who plays the stock market and is quite knowledgable about economics admitted to me the other week that Peak Oil intimidates him. He knows it spells the end of an economy based on growth.

[mmm]

I don't think classical economic theory is not flawed. It states that substitutions will occur for oil as its price increases -- no one on this board would disagree with that.

The problem is that good substitutes do not exist. Every way you slice it, as oil runs out, there will be terrible hardship. The substitutes will cost such a terrible amount more than what we are used to.

[Trab]

People in positions of power don't like to admit they are confronted with a problem they cannot solve. It usually means their replacement by someone else who has a solution, realistic or not.

The first time I hear Bush, or any other leader for that fact, state unequivocally "We're screwed," you know that TSHTF for real.

[Rincewind]

Ah the logic of economics (or lack there of)

From a basic understanding of economic theory we wonder why economists (mostly pundits who wanna be economists) are concerned about Peak Oil and the Peak Oil movement. As they repeatedly state as relative prices change substitutes will become cost effective. No problem.

However, what they don't state is that economic theory and market mechanisms don't give a fig about equity, continuity of insitutions, or the quality of service that results from the new substitutes. Economics is about efficiently allocating scarce resources. Nothing more. All other things being equal (cetris paribis) the efficient allocation of resources may result in economic growth, but it is not a certainty. Economics is particularly weak on explaining what make economies grow.

So with a major change in market conditions there will be (relative) winners and losers and no one including the pundits knows if they are going to be a winner or loser. They certainly don't know whether even if they are a winner if they will be better or worse off than they are now.

Which brings me to my pet theory as to why the pundits so strongly condemn the 'Peak oil conspiracy' despite the fact we are not having an affect on people's behaviour. I believe that they want to delay any change (either proactive or reactive) as long as possible, as any change may result them losing their current status.

Therefore, I never expect to hear President Bush say we are screwed. I will know we are screwed when I hear him say that the people of America (and by implication the rest us as well) must make sacrifices in the face of the current but 'short term' oil shortage.

Cheers Rincewind

[advancedatheist]

Economist Michael Perelman was interviewed on Doug Henwood's talkshow on WBAI recently: link

Perelman said things that clearly indicate he understands how economic orthodoxy is leading us to disaster, specifically the economic premises of future discounting and unlimited resource substitution. In personal email he told me that he thinks the world oil supply is peaking soon.

And in his academic biography Perelman writes that he discovered early on how "the agricultural system was consuming ten times more energy than it was producing in the form of edible food" and how damaging that was. He provides the existence proof that at least one economist isn't oblivious to what Peak Oil means for humanity.

[killJOY]

link Adelman is a professor of economics at MIT. Listen:
"There is not, and never has been, and oil crisis or gap. Oil reserves are not dwindling."
"The amount of a mineral that is in the ground has no meaning apart from its cost of extraction and the demand for it."
"It is commonly asked, when will the world's supply of oil be exhausted? The best one-word answer: Never."
"Are oil reserves dwindling? Is it getting harder to find or create them? Conventional wisdom says: Of course. But once again, conventional wisdom is wrong."
"...in some places the oil does run down. ...output in Texas peaked in 1972. But the 'running out' vision never works globally."
pdf

[chris-h]

That reminds me of the ex Iraq info minister.

[khebab]

Unbelievable! proof that you can come from MIT and be a moron! These guys have really no connections with the real world!

[RonMN]

This is the harsh reality...denial is on our side! the longer they deny, the longer we have to prepare! Unfortunately it also means the more go unpreparred & the more die.

I guess ya gotta take the good with the bad.

[retiredguy]

Hate to have to defend an economist, but I believe what he is saying is technically correct. He isn't really saying that oil resources are not finite. What he is saying is that, from an economic point of view, as oil resources dwindle it will become so expensive very few will be able to afford it so it will actually lose value for the vast majority of people. At that point it won't be worth extracting, at least on a large scale.

Remember, Peak Oil means the end of cheap oil, not oil itself. No matter what post-Peak scenario you envision, there will be a certain amount of oil still in the ground when all is said and done. It just won't be worth the effort required to extract it.

[tokyo_to_motueka]

Adelman, Morris A., "The Real Oil Problem" . Regulation, Vol. 27, No. 1, pp. 16-21, Spring 2004 http://ssrn.com/abstract=545042]link
$this->bbcode_second_pass_quote('', '[')b]Abstract: There is not, and never has been, an oil crisis or gap. Oil reserves are not dwindling. The Middle East does not have and has never had any oil weapon. The real problem we face over oil dates from after 1970: a strong but clumsy monopoly of mostly Middle Eastern exporters cooperating as OPEC. The biggest exporters have acted in concert to limit supply and thus raise oil price - possibly too high even for their own good. The output levels they establish by trial-and-error are very unstable. OPEC has damaged the world economy, not by malice, but because its members cannot help but do so.

[retiredguy]

Guess I should've read the article. The guy is really full of sh**t.

[nero]

$this->bbcode_second_pass_quote('', 'T')hat is true, the cartel cuts production, which lowers
inventories, which raises prices. Because each member's cost
is far below the price, output could expand many fold if each
producer followed its own interest to expand output, which
would lower prices and revenues. Only group action can
restrain each one from expanding output.

[wisegoat]

nevermind the fact that apparently 500,000 more bpd is all they have left to offer before they're capped...

and if there's really some big conspiracy, why the hell is the world at over 90% production power? So much power that one big plant explodes and the other dies from a power outage (how foreboding)

then again, most in a revered position of respect/power wont want to christen themselves doomsayers... they'd rather be the arbiter of hope and truth.. wake up you fools, the evidence is abundantly clear!!!