Saturday, November 19, 2005

Dealing with peak oil

A commenter on a recent Kevin Drum piece opines that carbon-based fuels are "dead" (he's obviously engaging in some hyperbole, as last time I checked, my Toyota doesn't run on electricity), recommends we develop alternatives, and asks why we should delay the inevitable.

But the thing is, we're not delaying the inevitable. If it's inevitable, then by definition it (a post-hydrobarbon future) must arrive. Remember gasoline spiking toward $4/gallon recently? It caused a whole lot of people to opt for the Civic instead of the Explorer, and buy a cleaner furnace and new windows instead of redoing the bathroom. Markets work, and people should try them out some time.

What advocates of free markets should be asking is: "why rush the inevitable?" when that rushing means extracting a great deal of wealth from an economy that will eventually (and inevitably) switch to energy systems that will, with time, make economic sense.

Now, if you've got some favorable tax treatment of the hydrocarbon sector or the automobile industry you'd like to see jettisoned, then I'm all ears. But please, no multi-trillion dollar boondoggles for solar cars and biomass whatnots. I've long sensed that the peak oil theory is valid; but instead of describing a crisis, to me it simply points to the magic work of the invisible hand: when something gets scarce, it gets expensive, and alternatives that were formerly too costly no longer are.

I doubt very much the shift from oil is going to be cataclysmic; rather, it will take place (and indeed is already doing so) over many decades -- perhaps over a century or more -- as it continually gets pricier in real terms and as newly "affordable" (in relative terms) energy alternatives increasingly take oil's place.

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