Peak Oil? We don't need no stinkin' Peak Oil! - Jonathan Pryor's web log

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Peak Oil? We don't need no stinkin' Peak Oil!

OK, maybe we want cheap oil. Maybe some industries need cheap oil (the airlines, for example). But will the disappearance of cheap oil cause the collapse of modern civilization? Not likely.

There are alternatives, which haven't been used yet because they cost more than cheap oil. As the price of oil increases, the alternatives become more cost-effective. For example, there is a process to convert agricultural waste into oil. It isn't cost effective yet, as it costs ~$80/barrel. When oil is $40/barrel, that's insane, but with oil currently over $60/barrel (and no end in sight to the rising prices), the alternatives become viable.

The end of the world? No. It just requires a change in priorities.

See also Instapundit's take and the Steven Levitt's take (of Freakonomics).

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