As the amount of oil used in the extraction of oil increases the cost (in all measures) will increase exponentially. For example if extracting a barrel of oil needed 1/3 of a barrel of oil (in Diesel fuel) then half the oil produced would be used in extracting oil.

No-one thinks that oil will suddenly stop. It will gradually become more expensive (as it has been doing over the last couple of years).

As for the political factor, at 9-11 even most Americans realised that lots of people in the middle-east don’t like them. Most people still haven’t realised that Saudi Arabia is both the most important oil exporting country and the country with the best support base for al Quaeda. If al Quaeda were to suddenly start sabotaging oil wells in Saudi Arabia they could significantly increase the monetary cost of oil overnight. It’s a pity that Fabius Maximus doesn’t focus more on such risks, he is quite good at his analysis of military issues (I’ve been reading his stuff on occasion for a number of years) but I don’t think he’s so good at economics and science.

http://fabiusmaximus.wordpress.com/2008/05/08/doomster/

It’s a bit strident (no, predicting the collapse of the Soviet Union isn’t the be-all and end-all of predictive benchmarks), but the post does make some interesting points.

Economists then like to point out that, as the cost of oil goes up, the attractiveness of alternatives also goes up, as does the incentive to find them.

So, rather than collapse, I see a gradual migration away from oil in our future. There may be things government can do to smooth the transition for the less fortunate, and possibly hasten its progress while we still have cheap oil, but in general I have faith that the market will sort this out in the long run.

Now, if by “peak oil” you mean something like that, then yes, I tend to agree.

Beyond that, I wonder about whether the current situation is a result of other factors: speculation, political factor for places like Iran, Iraq, and Venezuela, etc.

Proving the size of the oil reserves which are usable (IE the oil can be extracted for an energy cost that is a small fraction of the energy produced) would be very difficult even if there weren’t so many people lying. One issue is that OPEC rewards countries that claim to have very large reserves, so naturally such claims will be made without regard to the truth.

If oil was cheap and the OPEC cartel was significantly reducing capacity to force prices up then it would be reasonable to be skeptical of any short-term risk of peak-oil. This was the case then the peak-oil theory was first advocated a few decades ago.

Now that oil prices are reaching ridiculous levels and there is no cartel action to reduce supply it seems more reasonable to believe that oil fields are running out of oil.

http://en.wikipedia.org/wiki/Peak_oil

The wikipedia page has some interesting historical information about the peak oil theory being applied to US oil production in the 50’s.

Finally while demand is increasing at an exponential rate, we don’t need the oil production to drop to cause significant problems, all we need is for it to not increase as fast as the oil use increases.

PS Given the interest this post has received, I think it would be good if you could write more posts about similar topics.

But whether we’ve got 5 years or 150, it’s true that the oil will run out someday, and it’s best to switch from using oil when we can.

If you want to use wind power for your home then you need to have batteries for when the wind stops. To implement wind power for an entire continent you don’t need batteries, you don’t have an entire continent lacking wind. The same thing applies to solar power, you can have cloudy weather in a region that reduces the solar power, but over a continent it doesn’t vary much.

Regarding Ethanol being harder on engines, put current petrol in a car from the 1970’s and you will get a similar result. When leaded petrol was removed from sale in Australia they had signs at petrol stations informing people that they needed fuel additives or engine modifications if their car was to survive. Modern cars have better materials used to construct them.

Any oil product can be transformed to any other oil product with a suitable amount of effort, expense, and energy loss. But one thing that should be considered is that there seems to be no practical way of using biological sources for lubrication oils (they either break down when heated or degrade seals). If we entirely run out of petroleum products then we will have some real problems even if we have bio-fuel/hydrogen/battery powered cars. It would be best to conserve the petroleum.

As for 150 years, currently oil supply is decreasing and demand is increasing. We don’t have 150 years to solve these problems. I doubt that we have more than 5 years – which is unfortunate given that the average life-span of cars in Australia is greater than 10 years…

Bruce: It’s also impossible as a consumer to conserve if everyone else is buying inefficient vehicles and the vehicle you want has not even been designed. For example if you want a car with the technology of a Prius but in the size of a Camry or a Tarago you have no options at all in Australia (I heard that a Prius-Camry has just been released in the US).

It’s impossible, as a consumer, to conserve, if the market doesn’t give you the information you need to do so.

We’ve made enormous improvements in fuel efficiency over the decades. One of the results?: people drive more.

The only way anything sensible is going to happen is when energy prices rise to the point where we believe they accurately reflect environmental impact.

It takes energy to produce ethanol. But the energy won’t have to come from gasoline, it’ll come from other types of fossil fuels.

Currently its expensive to refine gasoline here in the USA. It’s part of the reason why gas prices fluctuate so much.

Our environmental laws are so onerous that nobody has managed to build a new refinery plant since the 1970’s. So we are dealing with obsolete technology being used at capacity. The end effect is that it’s making gasoline artificially more expensive to create then otherwise is required.

If Brazil is able to refine gasoline for a profit and resell the refined stuff to USA or other countries then this could effectively subsidize (not through government mandate, but through natural market forces) the increased use of oil for other purposes. Since, I think, that not all oil can efficiently be transformed into gasoline.. only a percentage can and the rest of the output need to be used elsewere. Due to the chemical processes at work.

_I_think_. I am very very shady on all of this. Obviously need to do some more reading.

Ethanol is very cool stuff and it would be great to have a renewable energy source.. if the intensive farming that it would require is sustainable and affordable.

It’s definately something I need to look at to understand more about it and avoid the propaganda.

I think the end result is that it’s going to require a mixture, a diversification of energy sources to slowly ween the world off of this dependancy for oil. Combination of Solar and Nuclear power and bio-fuels seems likely.

I mean there is just SOOOO much energy in gasoline. It’s unbelievable. It’s very difficult to find something that compares.

For example people here convert cars to use propane instead of gasoline. It’s not uncommon.. if you do it early in a vehicle’s life then it can substantially lengthen that vechicle’s engine lifespan. (gasoline is very dirty and byproducts are corrosive and destroy the lubricating capabilities of motor oil.)

As long as you offset the higher burning tempuratures of propane with better electronic ignition and cooling then you can get very good results with this approach.

Propane burns very efficiently.. you get like 80% of the energy actually being used by the engine. Gasoline, in comparision, is much much less efficient. Your only getting something like 20-30% or something like that. I don’t remember the numbers.. but it’s pretty bad.

Even though a gasoline motor is still going to be noticeably more powerful and use less gallons (or have more range) then the same engine running propane.

I think the only way it’s going to happen is through natural market forces. When gasoline gets very expensive then the profitability of alternative fuels will suddenly become viable. When that happens then there will be a huge economic interest in developing these technologies and the change over from gasoline/desiel to whatever will replace it will happen rather rapidly.

This is probably due to happen in about a 150 years or so unless you get some breakthrough in cheap solar energy or people smarten up about nuclear. *shrug*