Kandahar said:
Nuclear power can supply us with all the energy we need. But why don't you think that other forms of power could also do it?
1) Nuclear has certain limitations--it doesn't seem possible to build a nuclear airplane, for instance. Or, for that matter, have nuclear automobiles. You can use nuclear reactors to power electric automobiles, but at least right now, electric automobiles have to be fairly small and light, and do not have the kind of range that gas-powered vehicles have. All of this could be resolved, but to build the infrastructure that would be necessary to support it, we need a lot of energy. Where is that energy going to come from if we also have to use it just to keep our economy going?
2) If you do the math on the amount of gasoline we use in this country per year and then determine how much ethanol can be produced per acre of a given crop, you discover that we would need nearly all our available arable land to produce ethanol. Worldwide, the situation is roughly the same. This is not to say that we can't produce some ethanol, but we will never produce very much.
3) Wind and solar simply aren't scalable--there's not enough of the necessary materials in the world to build wind or solar farms capable of supplying more than a little of the world's energy needs.
4) The biggest issue with all these alternatives is that per unit of energy invested, they do not produce nearly as much energy in return as oil does. Oil has been a huge bonus for homo sapiens partially because of this. Right now, we have to burn 1 barrel of oil to get roughly 45 barrels out of the ground (on average--each field is different). With ethanol, however, when we invest one unit of energy, we only get a little less than 2 units back, and some analyses have concluded that it is a net energy loser. Wind and solar fare only a little better (thanks mainly to maintenance costs). Nuclear is something like 1:10 IIRC, so it's the best alternative, but it's still nowhere close to oil's ratio. Switching over fully to a combination of alternatives (which will not happen very soon) will be a huge blow to the world's economy. Frankly, I don't expect very many people to survive it.
Kandahar said:
Money itself is a finite resource.
Well, I spoke a little imprecisely in that what I meant to indicate were renewable/ reusable resources. The foundations of all previous economies except one were on renewable resources--usually on land and agricultural products. If there's only so much wheat in the storehouse, you don't have to worry so long as it's enough to get by for one year because you can (at least in principle) grow more for next year. You consume the wheat knowing that this is the case.
But oil is different--once used, it doesn't get replaced for millions of years (if at all). This is unfortunate because oil is really what underpins our economy. I have trouble thinking of any economic activity that doesn't rely either directly or indirectly on inputs of oil or natural gas. Without oil, food production would plummet, most transportation would stop, extraneous retail outlets wouldn't get inventory, restaurants would close, etc. etc. Adam Smith and David Ricardo didn't really think this sort of situation would ever develop. They assumed that supply constraints could be handled by market forces--but this is geology. We will get to a point where, no matter how much money we invest, we just won't be getting as much oil out of the ground. That point may have occurred last year, though I think it more likely that production will plateau out to about 2012.
Ash:Once oil becomes too expensive to produce at its present rate, the usual laws of supply and demand will become null and void.
KandaharWhy? If gas-guzzlers are more cost-effective than hybrids at $2 a gallon, people will buy gas-guzzlers. If hybrids are more cost-effective than gas-guzzlers at $4 a gallon, people will buy hybrids. Same logic applies to anything else that requires energy.
I'm not sure I understand your reply. The available supply of goods and services depends on the availability of oil, at least in the U.S. and in most of the world. Food gets harvested by machines that burn diesel fuel, transported to warehouses and then to stores with trucks that burn diesel as well. Those warehouses were built and are maintained by machines that use oil as a source of energy. People drive 50 miles or so to their places of business in cars that run on gasoline. Those cars are made of metals mined by machines that run on gasoline and diesel, or plastics which are petroleum products. Retail items are very often made of plastic or other materials whose production also depends on oil.
The problem of peak oil is quite simply that, no matter how much money is invested and no matter how great the demand, there will come a point where we will be producing as much oil per unit of time as we will ever produce, and from then on production will decline. Most often, economists believe that an increase in demand will drive an increase in supply as the price increase causes investors to put their money into producing and selling the in-demand product. But this will not be the case with oil--dwindling supplies will make everything more expensive, not just filling your car up on Monday morning. This includes the very components of the infrastructure that we use to extract oil to begin with. It's not going to be a matter of buying more cost-effective cars. While that will initially save some oil for other applications, it's not clear that production of automobiles would be able to continue at the present rate; so not everyone suddenly gets a hybrid anyway.