Hotelling's Theorem (Why I'm Not Much Afraid of Running Completely Out of Oil)
Some folks are quite worried that the world will run out of oil. There was even one fellow who seemed worried that perhaps a century off, someone will put his key in the ignition of his car and it won't start because there is no gasoline left in the world.
Hotelling's Theorem
That doesn't mean that oil won't get expensive, though.
David
posted by David Oakey @ 10:32 PM
1 Comments:
Catja Pafort and David Friedman had a dispute on the subject on a portion of the Internet I call Usenet Newsgroups.
David Friedman wrote:
> > > When, to take a real world example, the Secretary of Transportation
> > > casually remarks in conversation that at some point, perhaps a century
> > > off, someone will put his key in the ignition of his car and it won't
> > > start because there is no gasoline left in the world, he isn't using
> > > words in a different way--he's making a mistake in economics.
Catja wrote:
> > Nonsense. He's talking about the end of a finite resource, the point
> > where the supplies of fossil fuels, which are limited per definition;
> > and that they *are* limited is absolutely irrefutable (1); the only part
> > under discussion is _how limited_ they are, respectively what the costs
> > (real and environmental) are of being able to use each and every
> > possible drop of oil present on this planet.
> > But yes, one day that resource will have run out. There might be a small
> > amount of crude oil left; but gasoline is not the only, and not even the
> > most important use of oil; so there will be a day when that statement
> > you are mocking is true.
> > Economics has very little to do with it. Well, no, that is not true,
> > because as long as it is relatively cheap to run your car with fossil
> > fuel, and there isn't a great pressure to build and buy the most
> > economic cars that technology can provide, we will simply use up the
> > available resources faster.
David Friedman replied:
> And when it is expensive we will use it slower. And slower. And slower.
> To begin with, the way he put it--putting your key in the ignition and
> the car won't start because there is no gasoline--implies a surprise. In
> part that was rhetorical, but not entirely. But it's wrong. What would
> really happen in a world where fossil fuel ran out would be a long
> period of rising prices, resulting in a steady shift to alteratives.
> When and if the last drop of oil was used, no driver would notice,
> because it would have become too expensive to be used for fuel long
> before that.
> In fact, it's unlikely that the last drop, or even the last million
> barrels, of oil will ever be used--because by the time the price gets
> high enough to make it worth extracting that last million barrels it
> will be high enough to make alternatives more attractive.
> And while fossil fuels are in principle a finite resource, gasoline
> isn't--it can be synthesized. And energy is, at least for the next few
> billion years, a flow not a stock--of which we are currently using a
> trivial fraction.
> Finally, when looking at predictions like his and yours, it's worth
> paying some attention to the history of past predictions. (2)
> People--respectable people, (3) taken seriously, making predictions more
> testable than "some day," have so far rolled up a string of false
> doomsday prophecies unmatched outside of the nuttier religious cults.
(1) I'll probably touch on this topic in the future, since I've seen it refuted. The question remains: was it a correct or plausible refutation?
(2) I'll predict I'll touch on this topic in the future, too. David Friedman has made interesting predictions despite issuing the above warning.
(3) I'm thinking Paul Ehrlich might have been on his mind. That leads to an interesting idea, too.
David
Post a Comment
<< Home