[extropy-chat] Re: peak oil debate framed from a game theory standpoint ?

[Robert Lindauer]

On Sep 3, 2005, at 2:56 PM, Mike Lorrey wrote:

>
>
> --- Hal Finney <hal at finney.org> wrote:>
>> As oil reaches each new price level, Peak Oilers take it as
>> vindication and confirmation of their views.  There was a time when
>> $50 oil was unimaginable. Then $60 oil was unimaginable, then $70.
>> Today $80 or $90 oil is unimaginable. What will we be saying by the
>> end of this year?
>
> What do they say about the fact that once you take into account price
> shifts solely due to changes in the value of the dollar caused by
> banking policy, oil prices of $56/bbl today are essentially no
> different from $40/bbl prices two years ago. Todays spot price of $69
> is equal to $49/bbl prices two years ago, when prices were $30/bbl. So
> it appears that half of the present high prices vs. two years ago is
> solely due to fluctuations in the dollar markets due to banking policy.
> The other half can be attributed to multiple things: middle east
> instability, the current Katrina crisis, as well as growth in Chinese
> demand.

I'd say your scenario contradicts itself since you say below:

> I should also note that President Bush ordered the Reserve filled to
> capacity shortly after 9/11, when oil prices shot up from the mid $25
> range to the $35-38 range on the spot markets. Depending on what prices
> it obtained these reserves at, the gov't could realize a significant
> windfall on these sales. Assuming they sell a million a day for two
> months, they should see profits of about $1.5 billion, which should
> help offset some of the $10.5 billion being authorized by Congress for
> the Katrina recovery efforts.

Well, how much is it?

Anyway, at two years at 5% inflation, from $49, you get $54, not $56 
and the prices are not $56.

Anyway, this is mostly irrelevant since the underlying theory is 
obvious and simple:

There are no new sources of fossil fuels.  We have already tapped the 
"easy to get to" ones (for the most part, I've heard recently that 
Vietnam has a major reserve but I'm not aware of the reliability of the 
source...) and the easy-to-get-to portions of the easy-to-get-to ones.  
This leaves the harder to get to ones dwindling down to the impossible 
to get to ones and finally to the no more left scenario.

The alternative - that the core of the earth is filled with nothing but 
fossil fuels and we'll be able to run on unleaded gasoline for the next 
100 years at our current rate of consumptive growth is absurd.

Consequently the obvious conclusion for those with half-a-brain-left is 
that it's just a matter of time - 10 years, 2 years, 50 years, 100 
years.  In any case, the US economy in particular will have to undergo 
a major change in order to survive the removal of our primary energy 
source and it's the kind of thing it's better to prepare for earlier 
rather than later lest we find ourselves fossil fuels one day.

Robbie Lindauer