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Peak Oil? Non.

by Jerome a Paris Tue May 8th, 2007 at 09:08:00 AM EST

I missed it when it came out last month, but the Center for Strategic Analysis of the French government has a new summary report (pdf, in French) about the energy prospects of France. This report focuses almost exclusively on the danger from carbon emissions linked to energy use.

But I'd like to flag here the full extent to which peak oil is addressed in this report, which is, remember, meant to provide guidance for policy until 2050:

La question de la date et des circonstances dans lesquelles la production de produits pétroliers connaîtra, soit un maximum avant de commencer sa décroissance ("peak oil"), soit plus probablement un "plateau", reste controversée. En bonne logique économique, c'est la réduction de la demande de produits pétroliers dans les pays les plus développés, imposée par la maîtrise du risque climatique, qui devrait en être le fait générateur.

Mais il n'est nullement exclu, surtout si ces politiques tardent à se mettre en place, que ce soit le comportement des pays producteurs qui, par volonté délibérée ou par insuffisance d'investissement, constitue le goulet d'étranglement conduisant à une telle situation. Rappelons à nouveau, enfin, qu'une crise a priori sans rapport avec les réserves et leur exploitation peut créer un tel goulet (menace terroriste, évolution du marché de l'assurance, évolution du transport maritime,...) et que ces crises, dont la survenance est certaine, sont quasi imprévisibles dans leur origine et parfois dans leurs conséquences...

The question of the date and circumstances under which oil production will reach a maximum before decreasing ("peak oil") or, as is more likely, will plateau, remains a controversial subject. In good economic logic, it is the reduction of demand for oil products in developed countries (linked to policies focused on climate change risk) which should be the cause of such event.

However, it is quite possible, especially if such climate change policies are delayed, that it is the behavior of oil producing countries (whether by deliberate policy, or by lack of investment) that will create the bottleneck that brings about such circumstances. Let's note as well that a crisis unrelated to oil reserves and their extraction (terrorist threats, changes in the insurance market, change in maritime transport) could cause a similar scenario and that such crises, whose occurrence is certain, are almost totally unpredictable, as are their likely consequences.

And that's it. The report then moves on to gas, where it focuses again on geopolitical issues. It's well and good to finally focus on climate change, but a strategic analysis of energy issues which dismisses peak oil as something uncertain and about which nothing can be done anyway appears, somehow, ... weak - and terrifying, because it means we won't be ready for it.

And that's coming from a literal "who's who" of the energy industry in France. It's quite pathetic, frankly.


Display:
When is "bad"..."bad enough" to do something? Least of all, to even start considering the options. <unbelieveable!>

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Mon May 7th, 2007 at 07:11:43 AM EST
Do they think they live in a vacuum?

That other countries' energy demands are somehow going to slow down and go away?

It's not about developed countries - it's about developing countries....

Dohhhh....!!

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Mon May 7th, 2007 at 07:48:12 AM EST
...good economic logic.

See, 'perfect illustration of lack of.'

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon May 7th, 2007 at 08:20:44 AM EST
I hesitated whether to bold that bit - it's just such a fantastic illustration of the damage magical(economic) thinking can make...

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon May 7th, 2007 at 08:51:13 AM EST
[ Parent ]
What is wrong with economists?

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Mon May 7th, 2007 at 09:01:44 AM EST
[ Parent ]
They don't understand zero.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon May 7th, 2007 at 09:17:48 AM EST
[ Parent ]
They don't understand anything.

My reading of this is 'As economists we like to set policy. But since this issue is a bit vague and we don't really know what's going to happen - ehhh - let's not bother. Something will happen. One way or another. We'll just bloviate here for a paragraph or two so we can say we gave it a mention.'

The more I think about RDF's description of economists as court astrologers, the more fond of it I get.

As a meta-point, the illusion that's being challenged here is the command and control paradigm that all modern policy is based on. It's not actually about scarcity, but about being unwilling to engage with uncertainty, without dismissing it as tangential or irrelevant.

It's pretty much the political equivalent of hiding under the covers. As long you can't see the monster, the monster can't see you.

So it's more likely to go away without eating you.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon May 7th, 2007 at 12:42:43 PM EST
[ Parent ]
As a meta-point, the illusion that's being challenged here is the command and control paradigm that all modern policy is based on.

The irony of economic modelling is that when a neoliberal economist writes down a model he is behaving like a command-economy master planner.

Bush is a symptom, not the disease.

by Migeru (migeru at eurotrib dot com) on Mon May 7th, 2007 at 03:06:11 PM EST
[ Parent ]
Yes - exactly.
by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon May 7th, 2007 at 03:19:06 PM EST
[ Parent ]
this was one of Hayek's fundamental insights.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Mon May 7th, 2007 at 04:25:51 PM EST
[ Parent ]
Do you have a reference/quotation?

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Mon May 7th, 2007 at 04:26:50 PM EST
[ Parent ]
Soon to be considered less respectable than politicians and lawyers.

you are the media you consume.

by MillMan (millguy at gmail) on Mon May 7th, 2007 at 12:57:02 PM EST
[ Parent ]
I read that bit as slightly ironic for some reason. The french 'bonne logique' is redudant, isn't it? Ok, in english too, but in english it is emphatic more often than redudant (i.e. to make a lot of sense)

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
by UnEstranAvecVueSurMer (holopherne ahem gmail) on Mon May 7th, 2007 at 09:17:47 AM EST
[ Parent ]
Not really redundant. The sense of bonne here is "correct" or "well thought-out" or "proper".
by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 7th, 2007 at 11:17:19 AM EST
[ Parent ]
humpf... I saw this, plus the nullement exclu which is a litote gave me the impression that they didnt give much weight to whatever the logique economique had to say.

Rien n'est gratuit en ce bas monde. Tout s'expie, le bien comme le mal, se paie tot ou tard. Le bien c'est beaucoup plus cher, forcement. Celine
by UnEstranAvecVueSurMer (holopherne ahem gmail) on Mon May 7th, 2007 at 05:52:36 PM EST
[ Parent ]
I suggest you pop over to liberal economist Mark Thoma's blog periodically.

Mostly he just puts recent articles in context and leaves it to the comments for the debate. Generally he only cites US based writers so getting some (more) comments from elsewhere would broaden the debate.

The reason I mention it is because the majority of those he quotes still think strictly inside the box.

The problem is that there are no economic models which deal with scarcity and restricted resources, so the issue is just ignored. Modern economic modeling increasingly sounds like the debates between Swift's big endians and little endians, that is irrelevant, but vicious.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon May 7th, 2007 at 09:25:22 AM EST
Supposedly (according to basic textbooks) economics is all about allocation of scarce resources, and abundant resources are non-economic.

The problem with economic models is that they get around scarcity by postulating substitutability.

Bush is a symptom, not the disease.

by Migeru (migeru at eurotrib dot com) on Mon May 7th, 2007 at 09:32:40 AM EST
[ Parent ]
Even if not always scarce, at least finite resources.  Economic models that attempt to incorporate substitutability can only do so by recognizing that it is an externality that is frequently hard (if not impossible) to fully quantify.  Merely assuming a deus ex machina is no reason for not trying to guide the conversation in the desired direction.

This report's willful blockheadedness seems to stem from its recognition that some form of crisis is likely to occur, but since its nature is uncertain, we just have to figure that future governments will adequately take care of it.  That kind of reliance on the wisdom, foresight, resources (human, technical and financial) and abilities of the next generation is almost Bush Administration-like in its pie-in-the-sky expectations.  And that, as we all know, can be very dangerous, indeed.

by The Maven on Mon May 7th, 2007 at 10:47:55 AM EST
[ Parent ]
There are many economic models which deal with scarcity of finite resources. The problem, more likely, is in the details, e.g. I think that in neoclassical models, finite resources are a commodity and as we all know all commodities are perfectly fungible (in neoclassical economics, that is).
by nanne (zwaerdenmaecker@gmail.com) on Mon May 7th, 2007 at 02:43:18 PM EST
[ Parent ]
Real scarcity of resources has been a rare phenomenon for the civilisation so far. We left the stone age before we ran out of stones, and we left the iron and bronse ages before we felt any lack of those metals. Have we ever run off anything? I can think of arable land and wood, on a local and temprarily scale. (I put some tin, palmo oil and timber news here yesterday.)

In the modern times, there has been little need for economic models incorporating finitiness of resources. For example, globalization gave the excuse to find any commodity anywhere, even if at the other side of the planet. But times may change drastically. The world may find itself in quite a shock to find out that we actually can run out of some important resources, with no adequate replacement innovations just in time.

by das monde on Tue May 8th, 2007 at 02:42:53 AM EST
[ Parent ]
sustained shortages of water have done in several civilizations.

as jared diamond pointed out in collapse, what's new this time around is that there's no resource-rich places to flee to, since we globalized the process of plunder.

by wu ming on Tue May 8th, 2007 at 03:53:45 AM EST
[ Parent ]
Right, Australia already feels the drought pain.

Unrestrained globalization means unrestrained plunder indeed. Just to satisfy China's "need", we have to give up the planet, it seems. Without any logistic restraint put, we are bound to face the physical boundary of resource availability. Or is there anything to stop us from plundering everything?

by das monde on Tue May 8th, 2007 at 06:34:49 AM EST
[ Parent ]
Sydney Morning Herald: For millions the water will stop midyear (April 20, 2007)
The Murray-Darling Basin is the country's food bowl, and irrigators and winemakers warn that food and wine prices will soar, while economists fear heavy local job losses.

The Prime Minister said yesterday that unless there is substantial rain within a month, there would be no water allocations for irrigation or environmental flows from July 1. "We should all pray for rain," he said.

The looming catastrophe will directly affect the 50,000 farmers who depend on the river system for their livelihoods as well as the millions in Adelaide and the numerous towns along the basin, which stretches from southern Queensland to South Australia.

Pray for rain, what a brilliant policy prescription.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 06:40:34 AM EST
[ Parent ]
Condi Rice once said that no one could ever imagined 9/11. George W said something similar about Katrina. Someone will spin out that no one could ever predict Australia's distress, and so on. </snark>
by das monde on Tue May 8th, 2007 at 06:56:15 AM EST
[ Parent ]
Acts of God, man, acts of God.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 06:59:17 AM EST
[ Parent ]
Osama the God... haha.

A hurricane is an act of God, but catastrophic levee failure is an act of the Administration.

When did the last faith in goodwill die?

by das monde on Tue May 8th, 2007 at 07:04:42 AM EST
[ Parent ]
We have run out of quite a few animals that are now extinct, which makes us run out of their products too. Whale-oil and ivory comes to mind.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!
by A swedish kind of death on Tue May 8th, 2007 at 08:12:55 AM EST
[ Parent ]
But they are substitutable.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 08:19:30 AM EST
[ Parent ]
Indeed! As are human lives, by the way. There are valuations based on the willingness to pay for years of life lost that are fed into economic models that evaluate costs and benefits. Funny thing is that this makes African lifes a whole lot cheaper than American lifes -- still wondering why it's a dismal science?
by nanne (zwaerdenmaecker@gmail.com) on Tue May 8th, 2007 at 08:30:20 AM EST
[ Parent ]
Ok, whale-oil and ivory are substitutable. But what about the experience industry, how do you substitute elephants on an elephant watching vacation?

With people in elephant comstumes?

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Tue May 8th, 2007 at 09:39:01 AM EST
[ Parent ]
With animatronics.

Suggested reading: Do Androids Dream of Electric Sheep? in particular the episode of the dying cat.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 09:45:07 AM EST
[ Parent ]
Is there supposed to be anything in the middle of your comment cause I just see a large with space?

Anyway, yes that is a good book.

A vote for PES is a vote for EPP! A vote for EPP is a vote for PES! Support the coalition, vote EPP-PES in 2009!

by A swedish kind of death on Tue May 8th, 2007 at 10:27:20 AM EST
[ Parent ]
I'm linking to the photo of that Japanese engineer and his android from a couple of weeks ago (follow the link to "animatronics").

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 10:31:31 AM EST
[ Parent ]
Still, there are many such models. There's an entire discipline of resource economics devoted to optimal ways of dealing with finite, non-reprenishable (and also replenishable) resources.

It would have been more accurate if I said 'capital' instead of 'commodities', I think.

The thing is that according to neoclassical economics all forms of capital are perfectly subsitutable. Crudely stated, the machine you've built that runs on oil, with energy extracted from oil, is thereby a substitute for the oil that runs out.

(Don't blame me for that absurdity, that is, in my imperfect estimation, what the theory leads to)

by nanne (zwaerdenmaecker@gmail.com) on Tue May 8th, 2007 at 08:25:48 AM EST
[ Parent ]
But capital is not substitutable. See here
money and capital goods are not absolute equivalents. Obviously I can't walk into Wal-Mart with a piece of heavy machinery from a GM plant and exchange it for an iPod.
"Obviously", unless you're a practising economist.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 08:52:11 AM EST
[ Parent ]
I must be thibk today, (yes, entirely possible), but the only way I can understand these two paragraphs is that they see peak oil as a strictly market phenomenon. That is, I can't see where the notion that oil is a finite natural resource enters their reasoning.

Oil production would peak and begin to fall/plateau either because of reduced demand, or disruption of supply (whether caused by restrictive practices or crises). The available quantity of easily-extractable oil doesn't come into it.

Consternant.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 7th, 2007 at 10:42:22 AM EST
thibk, thick, whatever...
by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 7th, 2007 at 10:42:52 AM EST
[ Parent ]
What if we run out of easily extractable oil? No worries! It will be solved with wads of cash. I hear some oil companies have had great success reviving old fields by injecting wads of cash at high pressure into the wells...
by someone (s0me1smail(a)gmail(d)com) on Mon May 7th, 2007 at 11:01:08 AM EST
[ Parent ]
LOL! Sounds like a new opening for private equity!
by afew (afew(a in a circle)eurotrib_dot_com) on Mon May 7th, 2007 at 11:04:21 AM EST
[ Parent ]
Yeah, this is just baffling:
The question of the date and circumstances under which oil production will reach a maximum before decreasing ("peak oil") or, as is more likely, will plateau, remains a controversial subject. In good economic logic, it is the reduction of demand for oil products in developed countries (linked to policies focused on climate change risk) which should be the cause of such event.

I'm not sure I'm catching all the nuances of the translation for 'good economic logic' but shouldn't the article say somewhere that the main 'cause' for such an event is that oil is a limited natural resource that will eventually run out? ....Here's my rough stab at the French:

Un de ces jours, peut-être bientôt, nous serons à bout de pétrole...(corrections are welcome!)

by delicatemonster (delicatemons@delicatemonster.com) on Mon May 7th, 2007 at 11:07:04 AM EST
[ Parent ]
... economists used to financial markets, where the same items are sold and resold countless times, have to start thinking about flows that can accelerate and decelerate out of stocks that are uncertain in size but clearly finite.

Of course, we lesser sort of economist would not be advising such an august group.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Mon May 7th, 2007 at 04:39:06 PM EST
[ Parent ]
but the only way I can understand these two paragraphs is that they see peak oil as a strictly market phenomenon.

neoclassicals see everything as a strictly market phenomenon.  they suffer from a common human problem:  they have a hammer and therefore everything looks like a nail.  to them, the physical world is inside their model.  they think their model is larger than the whole world.  it's nails all the way down:  money is more real to them than food.

for perspective, see the documentary Jesus Camp, in which a group of evangelicals is praying over the A/V equipment prior to a presentation.  for them, any failure of the equipment indicates the Devil at work:  they have a theological model that is totalising, embraces every event no matter how small.  everything that happens in the world fits into their model of a Manichaean struggle between a God who is on their side, and a Devil who is constantly trying to thwart their efforts.  if there's a flat tyre on the way to church, it was the Devil who did it.  if they narrowly avoid a misfortune, it was God who saved them.  their model is larger than the world:  the physical world is merely one aspect of their model.  therefore they can control the physical world by sympathetic magic, i.e. by reciting the formulae of their model.  casting the Devil out of the AV equipment ensures that the bulb won't burn out during the presentation.  when I read these quotes on peak oil from J's post, this is the associative memory that immediately flashes into my mind.

I've posted before on this and other fora over the last few years about the Ptolemaic Astronomy Syndrome -- as human and as recurrent as Stockholm Syndrome or the fairly well-documented "phases of grieving".  when you have a totalising model, then any feral facts (data which disagree with the model or show up its limitations) must either be denied or explained away by increasingly byzantine extensions, exceptions, special rules, fancy math, etc. -- Occam's Razor gets confiscated at the door by TSA :-)  

the quality of totalisation oughta be recognised as a primary identifier, perhaps more relevant than any other to the applicability of a model or theory:  any tool that disallows the use of any other tool, i.e. forces you to pretend that everything is a nail, requires you to reject or conceal or write baroque exception handlers for feral data, is inherently broken and will only become more brittle, more precarious and -- alas -- more oriented to defensive repression and control-freakery, disingenuity and fraud, and will increasingly tend toward authoritarian tactics as it is more and more stressed by pressure from outside reality.

in this sense, the steady drift of neoclassical econ towards command and control and a bunker mentality makes sense as the same dynamic which took Communism from idealist theory to ideology to totalising dogma to totalitarian rule.  I would say that the neocons are now preparing for their own Gulag state or Tausendjahrreich, resolving the contradictions of their model by the traditional tools of denial, repression, propaganda, falsification of data, and -- in the end -- brutality.  aka Force and Fraud.  [of course neoclassic econ was always an apologia and cover story for a process of force and fraud from the git-go -- Enclosure and colonial expropriation -- so another way to see the process is that it's just returning to its roots.  as the twig is bent...]

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Mon May 7th, 2007 at 05:45:46 PM EST
[ Parent ]
...And the world comes down to people who want a narrative to justify force, fraud and self-importance, and those who prefer a more equitable distribution of resources and power.

The two groups probably don't have anything useful to say to each other.

What remains depressing is the extent to which so many, even on the left, are still challenging the narratives at face value, rather than calling out the subtext.

In a sense we're like the economists - it's a lot easier to pick at specific features in a piece in the FT than to deal with the reality that force and fraud are the goals, and whatever is written is a convenient lie to support them.

And if it doesn't make sense - that's perhaps because in propaganda terms, it really doesn't have to.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Mon May 7th, 2007 at 08:24:16 PM EST
[ Parent ]
The two groups probably don't have anything useful to say to each other.

comic dialogue oppo.

A: Excuse me, but you appear to be picking my pocket.

B: No I'm not.

A: But, er, this hand which is emerging full of my hard-earned coinage appears to be attached to a wrist which is attached to your arm.

B: You are a victim of backwardness, laziness, and sentimental thinking.  You need to be reformed. We are here to help.  This money will reproduce at an exponential rate in my pocket, from which a steady stream of wealth will trickle down to you.

A: Excuse me, but you appear to be peeing on my foot...

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Mon May 7th, 2007 at 08:47:41 PM EST
[ Parent ]
The non-communication is of the "forcefull" initiative. It is way too conveninet to them. And they were seeking methods to avoid  rational communication.

The problem of the left is enforcing: they face reality, but do not know (or dare) to act.

But narratives are always pleasing to human minds. Say, Sarkozy did provide resonating bits of his "vision", while Royal was basically in denial. She followed some implied rules, she broke some of those rules, but she hardly challenged the subtext in a coherent way, or offer a visual alternative. She tried to act, but without effective purpose.

Progressives still have to find an empirical receipe how to counter the modern corporate encroachment.

by das monde on Tue May 8th, 2007 at 06:48:51 AM EST
[ Parent ]
World Without Oil :: What's Going On Here?

WORLD WITHOUT OIL is an alternate reality event, a serious game for the public good.

It invites everyone to help simulate a global oil shock. People participate by contributing original online stories, created as though the oil shock were really happening.

I just got tipped off about this site. I haven't looked at it in greater detail...

by someone (s0me1smail(a)gmail(d)com) on Tue May 8th, 2007 at 08:54:22 AM EST
Jerome should submit The Day of the Oslo Warning.

Bush is a symptom, not the disease.
by Migeru (migeru at eurotrib dot com) on Tue May 8th, 2007 at 08:56:24 AM EST
[ Parent ]
Note that it is developed countries figuring out how to reduce their demand ... without mention of the growing Chinese & Indian & others' requirements/demand curves.

Blogging regularly at Get Energy Smart. NOW!!!
by a siegel (siegeadATgmailIGNORETHISdotPLEASEcom) on Tue May 8th, 2007 at 11:33:04 AM EST


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