

Ask HN: What do you think of "Peak Oil?" - rbranson

As fellow hackers, scientists, engineers, what do you think will be the impact of so-called "Peak Oil?" How do you think the exhaustion of available oil reserves will affect hacker culture and/or greater human civilization?
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nostrademons
Oil will gradually rise in price until it becomes more expensive than readily-
available alternatives (solar, electric, more fuel-efficient, etc.) At that
point, everyone will switch to the alternatives, demand for oil will sink
(leaving its price at an oscillating plateau), the sudden cost-effectiveness
of technologies like solar and better batteries will result in greater
investment in them, and we'll switch to a new declining cost-curve as greater
R&D pays off in better energy technologies. Eventually we'll be paying less
for our solar energy than we're paying for gas now, and will wonder how people
in the early 21st century ever got around.

It's started happening already - the oil price spikes of 2007 were a harbinger
of things to come, and they led to a widespread consumer shift from SUVs to
hybrid, and the development of things like Tesla Motors.

~~~
arghnoname
Oil prices seem to be quick to spike, so I would expect it to behave more like
a step function than something more continuous. It seems certain price levels
have to be hit to sufficiently dampen demand. If the spike is bad enough you
get recession (or depression) which kills demand, and if it isn't big enough
the initial investment of alternatives is too high.

Also, if Saudi Arabia or wherever "run out of oil" I'd expect political
instability to result there, but also, it not to matter as much. Before
running out there, I'd expect it to matter more.

I look forward to some facets of our crazy lifestyles changing (less exurbs
and McMansions) but it'll definitely crimp GDP somewhat, more or less
depending on the derivative.

~~~
nostrademons
I actually expect it'll look like a sawtooth wave, trending upwards. Oil has
very high inelasticity in both demand and supply, so small supply changes have
large effects on price. Changes in demand happen over much longer timescales
(i.e. people's car-buying purchase cycles), so it takes longer for prices to
go down.

The OP asked for the effects of peak oil specifically though, not for actual
oil prices. In the short term, oil supply is ruled by geopolitical concerns.
We bomb Iraq, the price goes up. Putin decides to flood the market with cheap
oil, the price goes down. Chavez starts saber-rattling, the price goes up.
World enters recession, the price goes down.

The Hubbert curve is what's left when you subtract out all the random
political noise. And _that_ slopes gradually down. So if we're limiting
ourselves to the effects of Peak Oil only, the trendline for price is going to
move slowly, even if the price in any given month gyrates wildly.

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keith_erskine
Your supposition is incorrect. The planet is awash in oil. The only limitation
is cost of extracting it. For example: the Bakken oil reserve in North Dakota
is estimated to be in the 100's of billion barrels. Unfortunately, the oil is
trapped in shale which limits the amount that can be extracted _today_. That
problem gets reduced every year that new extraction technology comes on line.

I think you're making the error of equating "energy" with "oil". In an economy
that relies on moving people and stuff around, new cheaper ways of supplying
the energy will always be found - it's in our nature.

Example: New York state has huge natural gas reserves. If you converted all
the buses in New York to run on CNG, the state would still be be a net-
exporter of natural gas.

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dfrankow
Commenters so far are talking about oil as a fuel.

Petroleum is spread throughout our lives. Agriculture is driven by it
(fertilizers). We use it to make plastics.

Moving our economy from oil looks to be a major undertaking.

Read this book by a petroleum geologist for a sobering view:
[http://www.amazon.com/Beyond-Oil-View-Hubberts-
Peak/dp/produ...](http://www.amazon.com/Beyond-Oil-View-Hubberts-
Peak/dp/product-description/080902957X). He is most convincing about why we
won't find more oil, less so about economics (because he's not an economist,
presumably).

~~~
nostrademons
Right, but oil is also fungible. If you remove the portion of it that is used
as fuel, you have much more left over to supply the chemical, plastics, and
fertilizer industries.

72% of domestic oil consumption is for transportation [1]. If we eliminate
that use, then the amount of oil needed to power all other usages is less than
1/3 our total oil consumption. You can get pretty far down the Hubbert curve
before total production is less than 1/3 what it is today.

[1] <http://www.eia.doe.gov/emeu/aer/pecss_diagram.html>

------
david927
I was bullish on the price of oil when it was $20. For the world's most traded
(and important) commodity, any jump in price is significant. It's now $90/bbl.
That's huge. And I'm still bullish. I still think it's underpriced. Why?
Because, while we'll never run out of oil, it will get much more expensive to
get what's left. The price of extraction after a certain point in a reserve
(around half-way) goes dramatically up; the technology we've invented in the
last decades has increased our ability to get to pockets of the cheap/easy-to-
get-to reserves; and no large reserves of (cheap/easy-to-extract) oil has been
found since the 1970's.

I'm surprised at the confidence in this thread, but humans have a terrible
capacity for forseeing change. Taleb's Black Swan is about this. He has a
great example: every day of a turkey's life is a reinforcement that the farmer
feeds and cares for it, until the last day. For the turkey, it's a black swan;
for the farmer, it's not. Whatever you think of the future of the price of
oil, above all don't be too confident. Don't be a turkey.

------
taliesinb
I'm surprised no-one here has mentioned the excellent book "The Limits to
Growth" (<http://en.wikipedia.org/wiki/The_Limits_to_Growth>). It's a book I
can't recommend highly enough, even though the first edition was written
almost 40 years ago (it was last updated in 2008).

The basic concept is a system of differential equations called "World3" that
allows for the analysis and qualitative understanding of the multitude of
_interactions_ between the various bio-geo-chemo-physical systems that couple
us to our planet.

While it doesn't strive to make actual concrete predictions, it does enumerate
a bunch of different possible trajectories that are all consistent with the
most current scientific models, and with policy choices we as a species might
make over the next 50 years.

And the conclusion is pretty much that we are doomed. Sadly. It seems likely
(especially with the failure of Copenhagen) that we just are not politically
capable of the level of co-ordinated activity needed to prevent a massive
'overshoot' beyond sustainable human population and consumption levels.

Carl Sagan talked about the potential for the human race to snuff itself out.
He might have been thinking about the Cold War at the time, but it seems the
real war is the one we have we are waging on the very systems that support our
continued existence on earth.

~~~
bryanlarsen
Considering how completely wrong the book has been predicting the last 40
years, I think it's pretty safe to ignore it. The air, water and soil today is
significantly cleaner now than it was 40 years ago, population is now
predicted to start declining within 50 years, et cetera.

------
philipkimmey
In general society, the concept of "peak oil" is a given. People involved in
oil/energy generally believe it's a myth.

I personally believe they have too much of a horse in the race to accept that
oil is not limitless, but to this point they have been proven right that new
sources of oil will crop up.

In asking a question like this, I think it's worth considering the possibility
that "peak oil" is little more than a myth, even if us tech people don't buy
into the concept.

~~~
nostrademons
Umm....

My sister is an exploration geologist for one of the major oil companies.
Within the industry, peak oil is very widely recognized, and the general
consensus is that it will happen within the next 10 years, and probably
already happened a few years ago.

The myth is that we're all going to be doomed because of peak oil, they'll be
widespread societal chaos, and it'll lead to the death of Big Oil. At least
over the near term (~next 40 years or so), peak oil generally means _more_
profits for the oil companies, as they control an increasingly scarce
resource. Over the long term, they are potentially screwed, but good luck
finding a CEO who cares what will happen in 50 years, so their efforts to
finding a solution have been rather halfhearted...

~~~
jerf
"good luck finding a CEO who cares what will happen in 50 years"

Assuming you mean that as some sort of slam against CEOs: Project that slam
backwards. If a CEO in 1950 had "cared" about 2000, would that have improved
his decisions? 50 years really _is_ too far away to plan, and the gulf between
2000 and 2050 will probably make 1950 to 2000 look smallish.

I'm not a huge fan of "next quarter, the world ends" thinking, but expecting
50 Year Plans is not the solution. (Even 5 Year Plans have a certain...
reputation.)

~~~
nostrademons
I don't mean it as a slam on CEOs. I mean it exactly as you do: that it is in
no decision-maker's rational interest to project plans out to 50 years, and so
anyone you can find that's made it to the CEO office simply...won't.

This occasionally means that humans make rather regrettable choices that could
totally have been avoided in hindsight, but I don't see a way to fix that
without them making _other_ regrettable choices that could _only_ be seen in
hindsight. I think it's fairly obvious that there will be a problem with the
oil industry in 50 years; however, I have no idea what a possible solution to
that problem will be, and I doubt anyone could until a few years have gone by.

~~~
jerf
OK, cool. :)

It has crossed my mind that the "Great Filter" is simply that between here and
"sustainability" is not an impossible path to follow in the mathematical
probability-0 sense, but that there are so many local optima that end in
global disaster that nobody ever makes it through.

------
whyme
Peak Oil is only important when you look at the downstream effect. To me, the
real question becomes - who has the oil, who needs the oil and who controls
the oil?.

The U.S. has made a habit of equating it's political and economic stability
with it's ability to continue pulling in oil at stable prices which, in my
opinion, is the reason for many of it's recent wars.

There's is no shortage of oil world wide, but regardless of quantity the price
shifts for consumer countries will continue to impact their economy and
continue to cause these wars.

It would be nice to see alternative technologies become cheap enough that the
US dependency goes away, but then you have another question to ask yourself,
what will the countries who currently capitalize on Oil profits do? What will
the geopolitical landscape look like then?

~~~
dnautics
Doesn't peak oil mean that the effects of global warming (as caused by carbon
dioxide) are effectively capped?

~~~
whyme
No, It's the maximum point in global production throughput.

From which point, supposedly, our oil reserves will continuously decline and
demand will continuously and progressively exceed supply.

The hype generated from this is along the lines of the world tanking,
political instability, and so on.

------
dstein
IANAEconomist, but I believe the impacts of Peak Oil will ultimately be
overshadowed by "Peak (American) Capitalism" in a similar same manner that the
Real Estate bubble was overshadowed by the global financial bubble that
created it. By any measure, we are not out of the financial crisis, the
Federal Reserve has only bought time by printing money. In general, I think
capitalism, as we know it, is coming to an end and there's no easy way to get
through it. The conversion from an oil-based economy to a hydrogen/solar
economy is going to have to happen during a period of prolonged depression for
America, and prolonged economic rise in Asia.

------
born-to-think
For years, we've been aware that innovations in alternative energy have been
bought up by oil companies and quietly, quickly disappeared. Who DID kill the
Electric Car and all that? That Peak Oil is even a concern to us now is partly
due to the oil companies having invested in keeping us dependant. As a
STARTING point, I'm all for getting back off them (by whatever legal means . .
. or other are available) all non-oil related technology patents they've
bought and hidden away.

In the next 10 - 50 years, we may see the oil companies start to go down . . .
but damned if they're taking us with them !!

~~~
jseliger
_For years, we've been aware that innovations in alternative energy have been
bought up by oil companies and quietly, quickly disappeared._

I don't believe this is true. Do you have any citations to support it?

~~~
borsukh
I believe he was talking about this for example: <http://fuel-efficient-
vehicles.org/energy-news/?p=690>

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Tycho
I figure there must be a lot of oil in the Pacific...

------
Mz
I think that, as with any big change, if people will go ahead and start
adapting voluntarily it doesn't necessarily have to be some huge crisis. Some
do-able means to adapt: live closer to work, shop closer to home, walk more,
car-pool, etc. Some companies are actively trying to encourage more car-
pooling, living within walking distance of work, telework, etc. It looks to me
like a drop in the bucket compared to what will be needed but I'm still glad
to see it. The real challenge is trying to make sure such things don't wind up
being "a day late and a dollar short".

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niels_olson
Isn't this what Quora is for?

