[FoRK] peak coal

Ken Ganshirt @ Yahoo ken_ganshirt at yahoo.ca
Tue Oct 27 10:01:15 PDT 2009


--- On Tue, 10/27/09, Jim Whitehead <ejw at cs.ucsc.edu> wrote:
> 
> Ken: perhaps you could do a few minutes of research on the
> history of reserve projections?
> 

I have. Two things about that:

First, projections are ... well, projections. It's like politics: it depends on who you believe. Because many projections *are* simply politics. To wit: OPEC projections. Their allowable sales are based on their estimates of reserves. So, if any OPEC country wants to increase the volume they are selling, they have to increase their reserve projections accordingly. You can't trust any of their numbers for proven or projected reserves.

Even if you choose to believe, say, the most optimistic of projections out there, none of them are projecting, say, centuries of availability of the quantities we need now and will need in the future, as energy resource consumption grows.

But the bottom line is that projections are worthless without an associated measure of extraction and transportation costs. That is, a surfeit of projected reserves is not very relevant if some significant percentage of those projected reserves are extremely costly to extract and transport.

Obviously, if the markets are willing to pay the price, the energy companies will figure out a way to get the stuff out of the ground and the transportation companies will haul it pretty much anywhere. But quantity is not the issue.

The issue is: at what price does the cost of energy that we are so dependent upon and addicted to become too expensive to sustain our current way of life? Note, it's the combination of "cheap" and "energy", not just availability of energy, per se, that supports our current way of life. 

"Availability" is a function of both quantity and price. Even if we continue to find new sources, the extraction and transportation costs will reach a point that the price will be a major disruptive factor.

This is particularly true in the United States because of the entitlement mentality associated with *cheap* energy.

Second, that was not my point in any case. 

My point was the short-term thinking I see everywhere I look. Some of it is institutionalized. Eg. politics (election terms) and commerce (the need to keep juicing quarterly performance numbers). 

It's not non-renewable energy resource availability that scares me the most. It's that persistence of short-term thinking, combined with the blind faith that "technology" will somehow continue to bail our asses out, is what I find most scarey. 

 ...ken...


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