Having been at the sharp edge of alternative energy development for BP Oil International in the last "crisis" of 25 years ago, the current crisis is all a bit of a yawn to me. Deja vu writ large. I suppose there are hordes of people too young to know anything before 1985. Somebody who was 8 then [and probably not knowing much] is now nearly 30 and worrying about the end of the world due to Peak Oil and the Greenhouse Effect. Ho hum.
Very simply, when the price of olde-style crude oil exceeds the cost of other sources of energy, including insulation, fuel efficiency, small vehicles instead of monsters, cancelled trips, living close to work or public transport, and a vast array of other things, all of which get dollar signs flashing for investors, there's a stampede into the energy gold rush and at some stage, demand, price, supply all come back into balance.
Alternatives which seem a good idea at the time of drama, such as CNG [compressed natural gas], Mobil's synthetic petrol from methane, tallow esters [sheep fat mixed with methanol], Orimulsion, windfarms and any number of other ideas, fail to get customers, and investors' money is lost as the "great new ideas" shut their doors and those involved find something more useful to do.
BP invested in CNG, LPG [still in business but a shadow of what was imagined], methanol, tallow ester just in NZ. Internationally, the millions that BP put into fusion reactor research, MTBE and other oxygenates, Orimulsion and other alternatives was money down the drain. Photovoltaics must be making money for BP, judging by the size of the business, how long it has been going, their projections for it, and how well competitors seem to be doing.
The get rich quick energy projects which are now being chased will for the most part turn out to be empty promises. Saudi Arabia, Russia, Iraq and Iran have huge deposits. If their geopolitical problems don't limit production, they can dig it up and pump it out. Iraq is in big trouble for now, but that will end, as things do.
$262 in the absence of a USD collapse is just silly, other than as an emergency spike should Saudi Arabia go revolutionary or something like that.
It's not all that hard to come up with alternatives, as Ford and General Motors are finding out as their SUV sales and production slow down a lot.
When somebody scraps their SUV and buys a Ka, motorbike, bicycle, public transport ticket, Segway, or walks, that's a decade-long drop in demand. They are unlikely to return to their old consumption even if prices drop.
Biodiesel is right now getting people drooling. It seems so much work thrashing around vast paddocks growing corn or something, which is just the start of the process, compared with plugging in another well to a big oil field and pumping it into a refinery, that I can't think that such environmentally sustainable and ecologically wonderful projects are really such a great idea.
CO2 worries are unfounded. Plants are "loving it" more than Big Mac consumers who are worrying about it [their expanding waistlines]. Filling the atmosphere with CO2 will be hard work as it is soaked up faster and faster, the more there is. Filling leaky buckets with the ocean surface and leaves as the leaks is not going to be easy. That's like filling a leaky bucket when the whole bottom of the bucket is like a sieve.
Which is not to say various investments in energy aren't going to make heaps, just that it will not be all of them, or more than a few types. Maybe fuel cells will be great for cars. Maybe not. What does platinum cost now? Ooops.
Mqurice |
