Comments on: The Hamster on the Wheel http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html Finance, Economics and Markets Thu, 09 Feb 2012 21:54:06 +0000 hourly 1 By: Wag the Dog http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-57000 Wag the Dog Fri, 04 Sep 2009 07:57:00 +0000 http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-57000 Depends on whose claims you're going by. There's a wide spectrum between peak-lite and full on peak-doom. Some very wealthy people are <a href="http://campfire.theoildrum.com/node/5702" rel="nofollow">building fortress communities</a> for what they see as the coming collapse, whilst others say our self-cocooning will go into reverse as we re-discover the low energy advantages of <a href="http://www.transitorienteddevelopment.org/" rel="nofollow">transit-oriented walkable community</a> integration. The nature of the transition between pre-peak to post-peak largely depends on how people adapt to the change. Depends on whose claims you’re going by. There’s a wide spectrum between peak-lite and full on peak-doom. Some very wealthy people are building fortress communities for what they see as the coming collapse, whilst others say our self-cocooning will go into reverse as we re-discover the low energy advantages of transit-oriented walkable community integration. The nature of the transition between pre-peak to post-peak largely depends on how people adapt to the change.

]]> By: hbl http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56997 hbl Fri, 04 Sep 2009 02:21:00 +0000 http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56997 I agree that short term thinking will almost always win, and that's why I am worried about environmental issues to begin with. But what worries me the most are all the external costs that are imposed upon the environment and mankind as a whole -- the climate crisis and its myriad effects, overfishing, unsustainable agriculture degrading soils and water tables, unhealthy air pollution, water contaminated by chemicals, pharmaceuticals and mercury, etc etc. What I am relatively less worried about (though still a little worried) is the ability of the market to allocate comparable resources efficiently (ideally with external costs priced in!). So I believe we will use much less energy AND find energy alternatives via market pricing. A great book (among many) that describes how we can move to an ecological services model (like nature) is <a href="http://www.natcap.org/" rel="nofollow">Natural Capitalism</a>. It reads a bit like a singularly focused libertarian sales pitch, so it does ignore large portions of the problems and necessary solutions, but what it does include shows just how much room for efficiency improvement we have in use of buildings, vehicles, and much more. I think we'll get there, though negative externalities could irreversibly change our world in the process. Maybe I'm being ignorant about the size of the cliff between the cost of fossil fuels and the alternatives, even after a drop in demand via conservation improvements and improvement in the alternatives, but I'm simply not convinced that the far side of peak oil will be as steep as claimed. I agree that short term thinking will almost always win, and that’s why I am worried about environmental issues to begin with. But what worries me the most are all the external costs that are imposed upon the environment and mankind as a whole — the climate crisis and its myriad effects, overfishing, unsustainable agriculture degrading soils and water tables, unhealthy air pollution, water contaminated by chemicals, pharmaceuticals and mercury, etc etc.

What I am relatively less worried about (though still a little worried) is the ability of the market to allocate comparable resources efficiently (ideally with external costs priced in!). So I believe we will use much less energy AND find energy alternatives via market pricing. A great book (among many) that describes how we can move to an ecological services model (like nature) is Natural Capitalism. It reads a bit like a singularly focused libertarian sales pitch, so it does ignore large portions of the problems and necessary solutions, but what it does include shows just how much room for efficiency improvement we have in use of buildings, vehicles, and much more. I think we’ll get there, though negative externalities could irreversibly change our world in the process.

Maybe I’m being ignorant about the size of the cliff between the cost of fossil fuels and the alternatives, even after a drop in demand via conservation improvements and improvement in the alternatives, but I’m simply not convinced that the far side of peak oil will be as steep as claimed.

]]> By: Edward Harrison http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56996 Edward Harrison Fri, 04 Sep 2009 01:43:00 +0000 http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56996 I see the detractors' arguments as a head in the sand type of view. The book "Collapse" in which Easter Island became deforested and eventually depopulated is the bleak outcome that I fear as we compete for dwindling resources. The fact is the human mind is not designed for long-term thinking as a priority over the short-term. In cases when there is a conflict of priorities, short-termism seems to win. I see the detractors’ arguments as a head in the sand type of view. The book “Collapse” in which Easter Island became deforested and eventually depopulated is the bleak outcome that I fear as we compete for dwindling resources. The fact is the human mind is not designed for long-term thinking as a priority over the short-term. In cases when there is a conflict of priorities, short-termism seems to win.

]]> By: Wag the Dog http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56995 Wag the Dog Fri, 04 Sep 2009 00:06:00 +0000 http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56995 One must be careful not to give equal weight to Peak Oil Debunked simply for the sake of "balance". As a famous economists once quipped, if one side claims the Earth is flat, and the other says its round, those seeking balance will conclude that opinions differ on the shape of the Earth. I've had a look at the arguments on either side and the debunker's arguments all seem to say, we're innovating new technology so no need to worry about the peak oil. Worry instead about above ground factors (government policy), instead of below ground factors (geology). However a lot of the new technologies (e.g.breeder reactors, algae, switch grass, moon mined helium-3) that are often highlighted by the debunkers are more aspirational than operational, and would only be relevant if peak is many decades away. Existing technologies can help but must be deployed on a very large scale. Such an upgrade to the energy infrastructure will take decades so the hope is that peak oil doesn't occur sooner. Another flawed argument I see often is over emphasising the size of the resource and not the flow rate. If you win a million dollars but can only withdraw one dollar a day, are you really a millionaire? > "The world struggled to cope with $150 oil prices, which probably contributed more to the economic downturn than most of us realise." According to this PBS NOW programme that aired back in October 2008: http://www.pbs.org/now/shows/440/transcript.html The high gas price contributed directly to the foreclosure crisis in the exurbs. This would impact negatively on whatever financial derivative that this exurb mortgage debt was securitized into. Banks are realising that in a post peak oil world, the exurb model is simply not viable which is probably why many will go the Victorville (CA) route -- demolition. When banks realise that many business models are also non-viable in a post-peak world, they will refuse to lend money to them. So paradoxically, the scarcity of oil may actually lead to deflation! One must be careful not to give equal weight to Peak Oil Debunked simply for the sake of “balance”. As a famous economists once quipped, if one side claims the Earth is flat, and the other says its round, those seeking balance will conclude that opinions differ on the shape of the Earth.

I’ve had a look at the arguments on either side and the debunker’s arguments all seem to say, we’re innovating new technology so no need to worry about the peak oil. Worry instead about above ground factors (government policy), instead of below ground factors (geology). However a lot of the new technologies (e.g.breeder reactors, algae, switch grass, moon mined helium-3) that are often highlighted by the debunkers are more aspirational than operational, and would only be relevant if peak is many decades away. Existing technologies can help but must be deployed on a very large scale. Such an upgrade to the energy infrastructure will take decades so the hope is that peak oil doesn’t occur sooner. Another flawed argument I see often is over emphasising the size of the resource and not the flow rate. If you win a million dollars but can only withdraw one dollar a day, are you really a millionaire?

> “The world struggled to cope with $150 oil prices, which probably contributed more to the economic downturn than most of us realise.”

According to this PBS NOW programme that aired back in October 2008:
http://www.pbs.org/now/shows/440/transcript.html
The high gas price contributed directly to the foreclosure crisis in the exurbs. This would impact negatively on whatever financial derivative that this exurb mortgage debt was securitized into. Banks are realising that in a post peak oil world, the exurb model is simply not viable which is probably why many will go the Victorville (CA) route — demolition. When banks realise that many business models are also non-viable in a post-peak world, they will refuse to lend money to them. So paradoxically, the scarcity of oil may actually lead to deflation!

]]> By: hbl http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56986 hbl Thu, 03 Sep 2009 15:21:00 +0000 http://www.creditwritedowns.com/2009/09/the-hamster-on-the-wheel.html#comment-56986 Looks like a valuable and balanced piece -- hope to read more later, thanks. Though I've been aware for the last decade that mankind is doing severe harm to the environment and that sustainability must improve significantly in many areas, I've never been able to get that worked up over peak oil. Perhaps I'm just ignorant as I haven't read many details, but I see other larger threats, even though oil certainly will peak at some point. I find the <a href="http://peakoildebunked.blogspot.com/" rel="nofollow">Peak Oil Debunked</a> blog to be valuable balance -- the author does believe in peak oil some time and the need to consume less energy and move to alternate sources, but points out a lot of the flaws of the most over-enthusiastic peak oil arguments. Looks like a valuable and balanced piece — hope to read more later, thanks.

Though I’ve been aware for the last decade that mankind is doing severe harm to the environment and that sustainability must improve significantly in many areas, I’ve never been able to get that worked up over peak oil. Perhaps I’m just ignorant as I haven’t read many details, but I see other larger threats, even though oil certainly will peak at some point. I find the Peak Oil Debunked blog to be valuable balance — the author does believe in peak oil some time and the need to consume less energy and move to alternate sources, but points out a lot of the flaws of the most over-enthusiastic peak oil arguments.

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