Posted On: Tuesday - September 11th 2018 8:16PM MST
In Topics:   Economics
The post on inflation of building materials was leading me to write just a bit about "Peak Oil". I should, then, if nothing else, because our website name uses a take-off on that term as its meme. Peak Oil, as a concept, peaked out around 10 years ago, when oil had peaked and the gone way down.
There were a few parts to the theory. One is about the question of reserves and lack of big new finds of crude oil. That is something for the geologists to argue, and I'm not one of them, along with the concept of abiotic oil (i.e. whether you - the earth that is - need dead organic matter to make the stuff). Another was the fact that oil is getting more expensive to obtain - they'll be no point when it comes down toward needing one barrel of oil to extract one barrel, of course. This is still somewhat arguable, as if you have other cheap, NON-TRANSPORTABLE sources of energy for oil extraction, if the equivalent in energy of a barrel of oil can produce one barrel of crude there still may be a point.
That brings me directly to the next part of the peak oil theory. People need transportation, and the economy itself does (think of transportation of those building materials, along with everything else). Oil-based fuel has been the best thing going for a century now. Peak Oil assumes that will remain the case. In transportation, you must bring all the energy you need with you, so you need an intense form of energy storage like the chemical energy in gasoline and diesel. The "lower heating value" (a technical term I don't want to explain here) of gasoline is 115,000 BTU/gallon, or to mix the units (for better understanding, though) about 35 kW-hours/gallon. I used mixed units so the reader can compare this form of energy to electricity, as measured by the meter and seen on your bill. If used efficiently, that gallon could power a decent-sized house air-conditioning unit for the day. Even today, batteries can't come close to this amount of storage. Peak Oil was the big thing 10 years back, and batteries were worse then.
However, innovations can really change the whole direction of the economy sometimes, and maybe battery technology will be one such innovation. Can batteries compete with gasoline and diesel? There's no theory that says they can't, as gasoline if just made of a bunch of molecules that react (via combustion in this case) to release energy. If one could make even a single use battery that used a chemical reaction that released that much energy per unit mass, it'd be a hit. Granted, the point of a battery is to not release that energy in an explosion (though it's been known to happen!) In gasoline these explosions happen in the cylinders. We'd rather have a steady controlled reaction, such as in batteries. With the complicated engineered designs to make this happen, we end up with batteries that are too expensive to be single use, but luckily they aren't. If we could carry a high-energy-density source with us, then that energy could be obtained for charging from any source, abundant coal, nuclear, solar or whatever, yet the peak oil worries assume oil is absolutely necessary for transportation.
Many detractors of Peak Oil would, or may still, bring up the point that innovations will eliminate the need for all this energy period. I think that is where the Peak Oilers bring up a very important concept that I am convinced of. You need the energy, no matter how advanced your economy. Robots may be picking crops, building cars and houses, doing it all, but the energy to move things, dig to extract materials from ground, manufacture parts, etc. can not be reduced. You can get more efficient but the 1st law of thermodynamics kicks in. Anything that takes work, as defined by physics, dissipates energy. There's no getting around this one. Going back to the point of the last paragraph, though, if it weren't for that pesky important transportation usage dependence on oil, all this energy could be obtained from any source
It may be easy in hindsight, or maybe still not be, to discount the people who promoted the view that big economic problems were/are on the way due to Peak Oil. Things didn't look so good a decade ago, with the high prices discussed in the gasoline-inflation posts here and here. Other than the fracking techniques, a great boon to American energy independence, but probably not a long-term solution, there's not been anything, such as big new finds, to prove the Peak Oilers wrong on the one part of their theory, that we are slowly running out. However, if energy storage in the transportation field can compete with fuels made from crude, maybe the prices won't shoot up again, enough to crank back up the Peak Oil websites and worries. In the meantime, inflation, the topic we've been on about for a couple of weeks running, is still heavily dependent on the price of oil.
OK, Peak Stupidity does not intend to be a kinder, gentler Zerohedge.com, so we'll have to get off this inflation topic pretty soon. They'll be just one or two more, hopefully interspersed with the harder-core varieties of stupid. No, we'll never run out!