Why Peak Oil Doom is for Dummies: Hotelling Rule
The “Hotelling rule”, named after the late US mathematician Harold Hotelling, states that the price of an exhaustible commodity should converge towards the price of a substitute resource. _National
From shale gas in North America to big new discoveries off the coasts of Venezuela and Israel, the recent appraisal of a huge Turkmen gasfield, new Australasian, Russian and Yemeni liquefied natural gas (LNG) projects and initiatives to reduce gas flaring in Nigeria, Russia and Iraq, it has never been clearer that the world is floating on a party balloon of gas.
Ironically, the more geologists search for oil, the more they usually find gas.
Consequently, gas prices have fallen in markets where the commodity trades freely.
Not so long ago, gas produced from oilfields was considered a nuisance, and it was burned as waste.
Now gas is a valued commodity for heating, power generation, the production of petrochemicals and fertiliser, for pushing more oil out of the ground, and even for conversion into synthetic crude oil and for use in some diesel engines.
Like oil, it can now be shipped around the world in tankers as well as moved through pipelines. If global warming continues, LNG tankers may soon ship gas from the Arctic.
Because of its infrastructure requirements, however, gas has most often been sold under long-term contracts linked to crude prices. In future, if Dr Austvik is right, crude markets may follow international gas prices. _National
And then there is the nuclear revolution -- safer and more efficient reactor designs just waiting for more enlightened governments in North America, Europe, and elsewhere to approve the next obvious step in large scale power generation. It takes about ten years to construct a modern nuclear plant once approved, but the Luddites in the Obama - Pelosi government and its alliance with the reactionary faux environmental factions are obstructing every form of useful new energy as far as possible -- including nuclear.
Peak Oil Doom is the twin of Climate Catastrophe Doom. The two movements conveniently dovetail, since Peak Oil Doom uses Climate Catastrophe Doom in an attempt to deny the use of coal, gas, kerogens, bitumens, heavy oils, and even regular crude. These faux environmental political movements are oriented around the hobbling of the industrial base of the western world. It is simply a matter of the consolidation of political power through energy starvation and a general economic hardship.
But the plan will not work, unless the Obama - Pelosi government is allowed to complete its well mapped agenda. There are several reasons -- including this one -- to doubt that the O-P Reich will have enough time to finish the job.
There are plenty of reasons to be concerned about the future of human governments and human society. Falling into a zombie panic over phantom doom will help no one. It will only prevent us from doing what has to be done.
posted by al fin at 7:06 pm
8 Comments:
Westinghouse say their AP 1000 nuclear reactor can be built in 3 years, which is close to the timescale we managed in the 1960s & what China is also confident of. As you say they don't spend most of the time & probably most of the money on paper shuffling.
New unlimited source of energy:
Burn paper accumulated from nuclear industry regulation.
I'm shocked that there is so much gas over upstate New york and Ohio. 100 years ago Ohio and Pennsylvania were the center of the US oil industry, with almost all oil in the US coming from that region of the Rust Belt. Those areas have mostly had their oil reserves exhausted, and I assumed that the gas in those fields had been vented during the years when the oil fields were pumped dry.
Yes, you are correct. Substitutes will take over, and oil will settle at 5 bucks a barrel in 20 years or less, but the question is when and how. China's energy is only 2% comprised of Nat gas, while the US nuclear sector provides only 20%, and with all the hurdles of regulation, it may boost that amount to only 30% in 10-20 yrs. Big deal! So, it looks like Gas will be king and the petro states will destabilize and implode barring the lack of investment in other sources of GDP.
Many of the petrostates in the Persian Gulf have IQ's in the 80's, so their national income should drop to about $5-8,000 without oil.
Geez Al, like straw men much?
Most of the people who worry about global warming are not worried about Peak Oil. Somme worry about both. Some worry about one or the other.
Some of the people who see Peak Oil coming think the economy will collapse and we'll go back to primitive lifestyles. But others do not see it that way at all and argue we can transition to a more electricity-driven economy since we have many ways to generate electricity.
As for the amount of natural gas: Sure, that helps in the transition. But there's a reason why little natural gas is used in transportation: natural gas is quite inconvenient as compared to oil.
Peak Oil is foremost a transportation problem. In the United States 95+% of transportation energy comes from oil.
I do not expect an end to industrial economies as a result of Peak Oil. But obviously living standards will decline for some years because substitutes cost more and take time to develop.
Actually, the natural gas can be used to solve a motor fuel shortage, if Peak indeed does occur. The most obvious way is that engines in commercial vehicles can be replaced with natural gas ones, and new cars can be built to use natgas as well. The other way natgas can be used to meet our motor fuel needs is that we can use this process to convert natgas to diesel. Given a little research work we could probably devise a process to make gasoline out of natgas as well.
FP: To be Frank (and don't call me Shirley!), the straw man on the Wizard of Oz was one of my favourite characters in the film.
You may have missed the word "doom" in the article. Unless you believe in peak oil doom, the barbs were not likely directed at you.
Both gas and coal can be converted to liquid fuels (GTL, CTL). I would never suggest throwing a big chunk of coal into your fuel tank. Even an auto modified to burn on syngas would require the coal to be crushed first. ;-)
Al Fin chemical engineers favour BTL, or biomass to liquids. They are getting better and better at it all the time.
Ron is correct as well, that better methods of GTL and CTL are also being developed.
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