Let us all drive Cadillacs

The Times ran a nice survey of the peak oil problem this weekend (unfortunately locked in the pay section of the site). The article told the now-familiar story of how global demand for oil is nearing the maximum global supply. Sometime in the next few decades we’ll likely hit a peak in production, ushering in a period of oil shocks and economic instability.

Two things struck me while reading the article. The first was a degree of pessimism that anything can be done to avert or even appreciably slow the peak. The economics of the situation just seem too stark. We know with virtual certainty that demand for energy in China and India is going to continue to explode. Anything the U.S. does to lessen our oil consumption will exert downward pressure on oil prices, encouraging consumers elsewhere to pick up the slack.

Keeping down demand in aggregate would take amazing acts of coordination and political will on a global scale. In other words, don’t hold your breath. As one reader wrote in response to the Times article,

I heard once that Edward Abbey, the author/environmentalist, drove a big guzzling Cadillac. Apparently his reasoning was that we might as well get on with it until it is all gone…

Of course, we would still be well-advised to do everything we can do reduce our dependence on oil, if only to prepare a softer landing when the peak does arrive.

Which brings me to the second item that struck me while reading the article: a surprising degree of agreement on policy prescriptions to help ease the transition to a post-peak world. The author claims that three major reports in the last two years all call for the following:

  • Much stronger fuel economy standards
  • Subsidies and tax breaks to the auto industry to aid the development of more fuel-efficient cars
  • Aggressive development of the gasoline substitutes known as cellulosic fuels

Perhaps coincidentally, Senator Barack Obama went public this week with a basically identical set of policy proposals. It’s too soon to know whether the ideas have any legs.

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  1. MM - March 8, 2006

    Peak oil is the same as global warming in that it is a global problem. You only need to be pessimistic if you approach it from the point of the current Administration and say that regardless of what we do there is still the issue of the increased demand for energy in China and India. We created their need for increased demand, so the problem is not entirely out of our control.
    These countries also recognize the problem. China is working to increase economy standards faster than the US. If the US government would raise fuel standards and subsidize renewable industries, it would be the beginning of new opportunities for US companies to export renewable technologies thus reducing everyone’s dependence on oil. (soft landing)
    Peak oil is inevitable and if we as a global community recognize it quickly and take the appropriate steps, it can be looked at as an opportunity rather than a problem. How we approach the issue it will ultimately dictate whether we have a hard or soft landing after the peak.

  2. Steve Hanrahan - March 8, 2006

    Several experts, such as Ken Deffeyes, a former Shell Oil geologist who is now a professor emeritus of geosciences at Princeton University, contend that we have already reached or will soon reach peak oil. Not several years from now, and not decades from now, but now. See this article from The Oregonian.
    Get ready for the wild ride!

  3. Lance Funston - March 8, 2006

    Americans seem to have the attention span of a gnat. Oil prices hit $3 during Katrina, and then 3 months later they heave a sigh of relief and they’re back at the showroom looking at Hummers.
    The disconnect is stark. Talk of high oil prices, peak oil, etc on one hand… On the other, low US gas prices that don’t begin to reflect where the macro market says we should be right now.
    Creating a soft landing starts with higher gas taxes directed towards measures like R&D, assistance for low income consumers, and your favorite… Carbon offsets and renewable energy investements.
    Until and unless that happens, expect some stark reality to hit suddenly and soon and pray gas prices rise before its too late to retool for a better future.

  4. Dan - March 8, 2006

    Did anyone else see the ExxonMobile full page ad in the New York Times. They claim peak oil is a hoax, and that there is a ton left. How do we know who to believe? They could be trying to keep their profits high in the long term, but there are interests (good PR) that could be fueling the acceptance of peak oil stance of BP. Hmm….

  5. Adam - March 8, 2006

    MM –
    We seem to agree that the basic choice we face is between a soft and a hard landing. But I don’t share your optimism that we can appreciably delay the peak. Nor do I really understand your claim that the U.S. created China and India’s increasing demand for energy. Even if it were true, we don’t really want to decrease energy demand in those countries. Increased energy demand is a sign of economic development, and the poor in those countries deserve every leg up they can get.
    Dan –
    I haven’t seen the ExxonMobile ad, so I can’t properly comment on it. I’m fairly dubious that it claimed peak oil is a hoax, however, because peak oil is demonstrably not a hoax. In 1950, Hubbert predicted the peak of oil production in the U.S. would occur in 1970, and he was right. Demonstrably true phenomena aren’t really the stuff of hoaxes. More generally, fossil fuel is a nonrenewable resource, so logically speaking, a peak has to occur sometime.
    Of course, the ad may have made a softer claim. For example, it might have suggested that we won’t reach a global peak until after we have safely transitioned to a post-oil economy. Again, I didn’t see the ad, so I can’t comment.

  6. Karen - March 8, 2006

    I did see the Exxon ad and it did claim that peak oil is a hoax (or at least a falsehood). I wish we were at peak oil and that supplies would diminish soon, however, the tar sands in ALberta, Canada contain as much oil as Saudi Arabia and even though it is highly energy intensive and environmentally unfriendly to extract, they are doing it as fast as you can blink. We cannot rely on dwindling oil production to stave off global warming.

  7. Reed Braman - March 9, 2006

    Lance – Right on. I think that anything short of taking out ads on billboards accross the country is not going to keep the attention of the public. I think that’s why so many people push for gov’t regs. If they have no choice but to be fuel efficient then we got something.
    I love this discussion forum but unfortunately (and I HATE this saying) we’re preaching to the choir. I think there needs to be a way to capitalize on the recent national (global maybe) attention and push this. Whether it’s slapping a bumpersticker on your car (terrapass plug) or writing your congress member or just talking about it with your peers.

  8. Marty - March 9, 2006

    BP is actively working on alternative fuels, so it has a vested interest in publicizing peak oil. ExxonMobil is not, so it has a vested interest in discrediting peak oil. The OPEC nations have a reserve-based quota system for oil production, so they have a vested interest in overstating their reserve capacity. The US government wants to get re-elected, so they have a vested interest in painting the picture rosy.
    The closest things we have to unbiased information are (a) data from non-OPEC fields, which are in serious decline, (b) data on discoveries, which peaked about 40 years ago, and (c) projections from retired geo-scientists, who currently estimate the production peak at around 2010 or so.
    A worldwide economic collapse would delay the peak, just as the recession in the ’70’s did. But do we really want to go there?