Steve (as 41oo) wrote:Thats a fair question Thomas. The crucial word is "the timing". Hubbert got it bang on in predicting the peak of American (sub 47 parallel) oil. Oil companies and governments all say oil will peak, its just a question of when.
If we were having this discussion in the stone age, everything about that logic could be applied to stones. Stones are a finite resource, and people are using it to build houses. Ergo, stones will run out one day, the only question is when. And that's horrible because stones, remember, aren't just another commodity: They are the very foundation that the Stone Age civilization is built on! We have every reason to believe that thoughts like this would have sounded just as compelling to our elders 20000 years ago as the "running out of oil" thought sounds to you know.
So why didn't the world end up running out of stones? We don't have any historical evidence to answer that, but any price theory book can tell you the relevant economics: When the demand for a resource outruns its supply, the ensuing shortage encourages people to use it more sparingly, and to look for alternative resources. This requires effort by the individuals doing it. But seen from the higher levels of society -- the tribe level, the national level -- the process happens spontaneously, with no high-up intervention necessary. In the stone ages, for all we know, there never has been a government program to look for alternatives to stone. In the 19th century, William Stanley Jevons predicted that Britain would run out of coal in a matter of decades. Jevons was one of the most distinguished economists of his day, yet Britain has never run out of energy -- not even out of coal for that matter.
So will we be using oil forever? No, because we will find alternative energy sources, and economise on the ones we have. Will the process be traumatic? No -- because the relevant textbook economics tell us that the price of a finite resource, if set by profit-maximizing agents, will increase at the world's real interest rate, which currently fluctuates at about 3-4% per year. (For one webbed example of the standard textbook treatment, see
David Friedman's Price Theory book. Scroll down about 1/3 of the page to the section "depleteable resources.") Will it take massive government intervention to develop those alternatives? If history is any guide, no. We have been "running out of" materials for centuries. Every time this happened, the scarcity of whatever we were running out of raised its price, and self-interest took it from there. This time might be different, but it would be a historical first if it was.
), the functionality is the same with a Trabant or a Citroen 2cv.