>I agree with the "relative" decline idea, except inasmuch as bringing so much incremental demand online pushes a finite supply of global resources to the limit. Up until recently, energy, air, water, and raw materials have been treated as limitless, priced only based upon how hard it is to get them from where they are to where they need to be.>
Why should it present to be much of a problem? The developed world already has a 1-1.5 billion people consuming at high capacities for at least 3 decades. The rest of the world is only 5 times the size of the developed world, and they will be ecstatic to consume half the per capita consumption of the developed world in next 20 years. That means we are looking at the global physical commodities consumption to be just 3 to 4 fold of today's consumption. That translates to an annual growth of only 6-7 percent a year over the next 20 years. Assuming increasing efficiency of 1 percent a year in commodity utilization, the overall rate will be even lower.
The population growth is already almost zero in most of the developed world, and similar trends will happen in the rest of the world.
How to find and mine the commodities from the ground is a well known process. There is really no unsolved problem there. If there is cheap energy, the mining can easily be increased by 5 percent a year. And environmental controls only add about 5-10 percent extra to the costs of doing that (it only requires political will to push that through)
So it comes down to the price of energy. And I am talking not about the market price. I am talking more like - how many gallons of consumable gasoline is needed to get 100 gallons of gasoline to the customer from its raw state in the ground. The transportation cost in itself is tiny. It takes a few cents of energy to transport 1 gallon across the world.
1 barrel of oil = 42 gallons. At the current prices of $100/barrel, 1 gallon of crude oil which costs $2.50 per gallon is going at around $3/gallon of refined gasoline at the pump. Either there is a mis-pricing or the incremental cost of shipping, refining and distributing 1 gallon of refined gasoline is less than 50 cents/gallon. That means the value of energy required for shipping, refining, and distributing is less than 20 percent of the energy contained in 1 gallon of gasoline. Some numbers here:
energyandcapital.com
Really, energy could be 3 times the current price and still be affordable in most parts of the world. People will just start conserving more.
What is being wasted in most part of the world is human mind power. Muscle power is easily substituted by oil or other forms of energy.
-Arun |
