The amount of time it takes to eat a grain of rice with chopsticks increases exponentially as you reduce the amount of total rice in a bowl. This is because when there's a lot of rice, you can clump it together and eat big chunks, whereas when the rice starts going away you have fewer grains of rice to clump together, which means less rice that you can grab. You either need greater skill to handle the last few grains of rice, or you just leave them.
In that sense, rice has a "half-life", a term coined for radioactive materials which will only lose half their radioactivity in a particular period of time. This gives radioactive materials (and rice) that exponentially decaying curve that we've seen so often.
The theory behind peak oil is as with rice. In the beginning, due to the sheer amount of oil, it's easy to get at the oil itself. At a certain point, however, you either need to get better at extracting the oil, or you won't get as much for the effort, even though there may still be plenty of oil down the tube. At about the time that your increasing extraction meets the decaying, you reach a peak. The idea of this "peak oil" (the catch phrase) has gained recent attention when some dude came to this country talking about it. Four corners had a program about it just tonight, and I'm guessing with petrol prices, this will only be mentioned all the more.
What's quite surprising is how readily practically everyone in the report, from the scientists to the oil producers to the businessmen, accepted the idea that while we'd be meeting oil demand, that we'd have to pay a huge price for it. Everyone except Saudi Arabia, who are all "trrrrust me, we khave oil coming out of ourrrr frrreaking earrrrrs."
I'm a little worried about how oil prices will affect me directly. Not a lot, because not only will everyone else be screwed like I am, but I'm hoping clever living strategies will limit the problems this will cause. After all, the biggest use of oil for me is petrol (directly). I don't know why I'd be consuming large quantities of diesel, wax, rubber, or the various other hydrocarbons present in crude oil.
Indirectly, I'm shitting my pants. Again, LPG, petrol (gasoline) and diesel are the most important products of crude oil. Everything else has some sort of substitute which big companies could switch to in case things go very wrong. This may have issues, but in the end I don't expect that they will be horrible. Petrol, diesel, and LPG have the problem that they're perishable unlike things like plastics, oils, etc. which (at least in theory) can be recycled.
This affects food and (to some extent) electricity, shipping and other types of travel, etc. I haven't really begun to think of the implications, but the problem is that it could cause a severe depression that we have no way out of. I've never been in really tough times. I'm sure that years of playing video games haven't done all that much in preparing me for what's to come.
And to add to your rice analogy; to get at the smaller pockets of rice, you need highly technical, advanced and expensive chopsticks. You can still 'consume' the rice, but to get at it, you need to spend more money - and a lot more time. Hence, the continuing rise of the price of petrol.
I really doubt that the world will be able to cope with the increasing demand for oil, considering the above, unless there is some serious investment in technology to make the drilling of smaller pockets of oil, in more difficult locations, more viable. However, to put it as Dr Brian Fisher, Exec Director of ABARE did in the program: If the price of eggs is high enough, even the roosters will start to lay.
I tend to agree with this. Having a product which is of such high demand and dependence, I'm sure a lot of companies will want to invest money in obtaining more oil. The risk is whether people would actually buy the product at such a high price. Also, it highlights the market of providing cheaper alternatives to oil as liquid fuel. Ethanol, for example.
But, as outlined in the program, with the demand for oil exponentially increasing, in some part due to China's and India's economical growth, it remains very concerning that we won't be able to cope with demand.
As for consequences, macro and micro, it's hard to acurately say what could happen, save for the fact that the increase in costs being passed onto consumers is already happening, but of course it would be much worse if petrol reached something like $3.00 per litre.
I think that I should also say that running out of oil is not necessarily the bad thing here, it's the running out of oil in not enough time to find a suitable alternative. If we have already reached "peak oil", then we don't have much time - and we aren't prepared.
There just seems to be so many opinions as to when this is going to happen, who knows what to believe?!
If the rising cost of oil becomes a long-term issue and not a temporary hiccup, then the biggest problem that we will face is not at the pump but at the supermarket. Sunny mentions this in his last paragraph.
The capability to purchase any of our most important needs at any given time, with said products being cheap, fresh and always in stock is something we all take for granted. Such conveniences require a never-ending flow of transportation which could come from anywhere on the planet. Our reliance on cheap oil is so interwoven into our society that most, if not virtually all of the things our money goes to will be affected by rising costs.
Essentially, what I want to stress is that I believe running out of cheap oil is the beginning of running out of oil ("Peak Oil"). As obtaining oil becomes more difficult, time-consuming and expensive, the higher the price will go. This is why I am so cynical about the world oil supply being able to cope with demand; it takes a lot of money and time to get at these smaller or deeper pockets of oil and, hypothetically, just maintaining our current demand/consumption will be a difficult task.
Of course, eventually, due to the sky-rocketing cost to produce, and simple economic factors of supply vs demand affecting value, eventually it may be priced out of the market, simply becoming unaffordable and putting a lot of pressure on markets to cope.
Unless we come up with the technology to make it all viable, effectively, there may be no difference in having or not having oil; if it can't be produced at a cost the market can cope with, then "running out of oil" may happen a lot quicker than actually running out of oil, if you know what I mean.
Re cost of food in supermarkets: This is part of what I meant about cost being passed onto consumers - although I did really mean it to cover a whole range of things, from food through to anything possibly related or dependent on being transported.
And yes, I agree with you on your third point. Our ignorance, it seems, will mean that we'll all have to have a crash course in self-sufficiency by watching Britain's The Good Life. It's time to get those vegie patches started!
I mean, there may be side benefits, like we may end up getting a lot more things being Australian made, simply because shipping something from overseas is just that much more expensive. It's got some big implications for globalisation.
The other thing is, Australia's a multicultural society. Can you imagine what it'd be like without a steady influx of immigrants? What would happen when the only way to really see other countries is through the internet or television? The people who've been here for a long time only have their memories to go on, so it'd be strange. I'm hoping this will cause somewhat of a cultural awakening for this country, where we all go and create a wacky mix of all cultures and weave it so that it doesn't resemble anyone's.
The main point is that it's change, and change that we don't control is scary.
As for people being able to get over here, for a very long time it took months for people to get here on boats running on wind and then on coal! We'll still get immigrants, and our natural resources will only get more important with an oil shortage.
If oil hits $3, that isn't a disaster, but it will mean big things in the design of our cities, we went from the centralised cities of old where people either walked to walk or walked to a train station and went to the city to the suburban sprawl now through the availability of cheap oil, if fuel prices keep increasing we’ll see the city reshaping to minimise travel costs.
Add Comment
<< Home