The Freakonomics guys fisk The New York Times Magazine’s piece about a coming oil doomsday.
I just wish somebody would make that 250-mile-per-gallon Prius.
Everything you need to know about that commentary is contained in these sentences:
“I don’t know much about world oil reserves. I’m not even necessarily arguing with their facts about how much the output from existing oil fields is going to decline, or that world demand for oil is increasing. ”
So despite a lack of knowledge in the most basic facts, they post a critique that supposed to demolish the idea that we are heading for a big time oil problem? I don’t know which is more ridiculous, the fact that these idiots bother to sign their names to such drivel or the fact that you pimp for them.
Note the term “existing oil fields”… sure existing oil field output may decline (even though currently it isn’t) but there are resource that have never been drilled (Russia and China). The “established fact” that the Middle East holds the world’s supply of oil is a fallacy; all the oil is in Russia and China! There is not a supply problem but an upcurve in developing countries DEMAND for oil. If you don’t understand this I suggest ECON 101.
The real problem is the huge oil demand caused by the suburban lifestyle that is unique to America. The supreme court broke public schools in 1954 when it desegregated them, essentially forcing whites to flee to the suburbs in an attempt to get their kids a decent education. The biggest thing we can do to solve the oil problem would be to fix public schools so the middle class can move back into the cities.
The Freakanonics guys have a very basic political rightward bias, Jeffo. I read the fisking and had the same reaction as an earlier poster: these guys have done literally no research in the area and have no facts and hand and yet can reject another theory that is based on solid research. They’re the modern Know-Nothings.
Kinda sad to see you’re drinking their Kool-Ade, Dr. Pangloss, and using idiots like these to blast your real target: the NYTimes. Pretty pathetic, Jeffo.
Ed: He isn’t rejecting peak oil, he is rejecting what the NY TImes says will be the economic consequences of it. Read a little more carefully next time.
That’s right Ed, never reject a theory based on solid research. Reject it based on who keys it in on their keyboard! Because politics is more factual than science!
The “Know-Nothings” are the people who don’t have a clue about the massive amount of research and investment on the part of energy and auto companies alike into what comes next after cheap oil. I have a friend who designs cars for a living who laughs whenever someone invokes the boogeyman of peak oil, because his company has been sitting on top of such fixes as natural gas conversions and synthetic crude for more than a decade now, waiting for economic conditions to make them viable.
The worst case scenario for an oil supply problem would be the startup costs involved in switching the country over to a new energy paradigm, but it’s been done before in our history — from coal to gasoline — and it’s hard to argue that we were any worse for the wear as a result. In the space of a few years the U.S. went from having a handful of “gas stations” to offering one in every town, then every street corner. Why the same couldn’t be done for electric cars, natural gas cars, vegetable oil cars, or syncrude cars is a question that the peak oil prophets simply refuse to entertain. Indeed, there is almost always a perverse kind of glee underlying the doomsayers’ message, as if we are all sinners who must suffer for the evils of our oil-fueled industrial civilization. To them Peak Oil is the divine scourge which will return us to a time when we all lived in communitarian harmony with our neighbors and grew our own vegetables (organically, natch).
In other words, Peak Oil is the new Y2K. While the fearmongers tell us all that life as we know it is coming to an end and the more susceptible go hoard canned goods, millions of brilliant and talented people are already working behind the scenes as we speak to ensure that our transition from an oil economy to a post-oil economy will register as little more than a bump when that alleged Day of Reckoning finally arrives.
The “250 mpg” (actually 80 mpg) Prius achieves this largely through additional batteries plugged into the grid. Where does that electricity come from? How is it generated? Most likely coal. Do you see the enviros allowing the intensive coal mining that would be necessary to convert to these cars? I sure don’t.
Changing World Technology, check them out.
Steve Levitt gets freaky:
“I don’t know much about world oil reserves. I’m not even necessarily arguing with their facts about how much the output from existing oil fields is going to decline, or that world demand for oil is increasing.”
We then get a textbook rehash of the principle that when scarcity grows, prices go up, people buy less of the scarce good, and substitutes come online. Investment flows to alternatives, which get less expensive in consequence.
So don’t worry about the world’s dependence on finite fossil fuel resources. Who needs expertise in resource economics? Markets solve all problems. The universe is a convex set whose boundary is smooth and everywhere differentiable, may God strike me dead.
The principles make perfect sense, but they are completely beside the point. They typify the incompleteness and intellectual arrogance that pollutes academic economic discourse.
Do markets really solve all problems? Most problems? Nothing ever goes wrong? I guess it depends on how you define “wrong.” For instance, Amartya Sen wrote a book about poverty and famines which describes how markets solved the problems of people having no money to buy food: they die of starvation, the ultimate steady state.
If oil runs out, sure there will be substitutes. How fast will these come online, if they do? How much will they cost? What will be the costs of adjustment? Will that be fun? Who knows? Markets solve problems. Solutions do not exclude freezing in the dark, a new kind of equilbrium.
Nobody should be let loose in the wild with a Ph.D. in economics unless they’ve been required to take three or four courses in history, preferably taught by non-economists.
Why aren’t the folks who were pushing for a multi-dollar/gallon gas tax out there now saying that the recent run-up in gas prices is a good thing?
Because all the money is going to 7 billion-per-quarter profits for energy companies, ON TOP of an extra couple billion in subsidies here and there, to “encourage” them to explore other options.
The $66 I spent to fill up my truck should be going to actual research and infrastructure for future energy options (and don’t give me bullshit like ethanol and hydrogen). NOT to line pockets with bonuses.
Hey, granny will go bankrupt this winter trying to eat AND heat the house, but XOM will make earnings targets, that’s all that matters.
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