Lynne Kiesling
Tim Worstall had a post yesterday on the “peak oil” calculation, inspired by a long article in the Guardian. Tim makes the important point in this post and in an earlier one to which he links that the economic assumptions on which the calculation rests are too static to be realistic. They don’t recognize the phenomenon of substitutability and don’t make any allowance for/do any sensitivity analyses on cross-price elasticities of demand.
The comments on the post are also worth a read; note in particular the references to production capacity from oil sands in western Canada.
For more useful and insightful analysis, see Rob at Peak Oil Optimist.
Thanks for the word, Lynne. While I do think static thinking is problematic, it bears repeating that mankind has never faced a problem like this one; substitution is fine and good, but the scale involved is enormous, and likely to have tremendous political ramifications. There are some fine minds working on this problem (as I mentioned here in a post about carbon nanotubes as room-temperature superconductors), but there’s no guarantees we’ll get to the promised land in one piece, or without debilitating wars. The stakes involved are simply enormous and literally life-and-death.