Mr. Erik Lindberg of Transition Milwaukee Fails to Understand My Position

In a blog post entitled "The End of an Illusion" posted on the Transition Milwaukee website (transitionmilwaukee.org), Mr. Lindberg continues the tired Peak Oil mantra by FINALLY making the critical admission that, in fact, we will never run out of oil:

"Or as economist Zagros Madjd-Sadjadi tries to explain it, 'We will never run out of non-renewable resources simply because the price will rise to make extraction cost-prohibitive.  At that point, we will have to switch to renewables simply because of the cost.  Furthermore, because of those price signals, entrepreneurs will come up with new ways to reduce the use of fossil fuels and other non-renewables.' (http://www.resilience.org/stories/2011-02-28/steady-state-economy-does-not-imply-zero-economic-growth).  If we look closely, we will see that Madjd-Sadjadi is sliding stealthily between two meanings of “run out.”  According to the logic of extraction, it is true, the cost of rare and buried minerals or fuels does become prohibitively high before they are entirely depleted.  No one will bother to drill 3 miles beneath the North Pole to extract the last barrel of oil.  We won’t actually run all the way out of oil, but will leave the last and most expensive oil in place.  But the fact that we won’t run out of it or other resources in this, more technical sense, doesn’t mean that we won’t run out in a more practical sense.  When they become too rare and expensive to extract, we will have in fact run out in any normal sense of the phrase.  Madjd-Sadjadi is hoping that no one, including himself I would imagine, will notice that the logic of resource depletion and the way it shows how we will never “run out” does not makes it inevitable that there will be some equally good renewable that we can “switch to” when the moment arises.  Groggy and groping in the dark for some sort of switch, like many economists, he doesn’t seem to entertain the fact that many switches simply toggle between on and off.   The whole proposition depends, at any rate, on some sort of quasi-magical belief that high cost itself can reliably synthesize raw materials as some sort of automatic price-generated feverish wish-fulfillment.  The American Dream indeed."

Mr. Lindberg claims that we "won't run out of it in a more practical sense. When they become too rare and expensive to extract, we will have in fact run out in any normal sense of the phrase." There is no such thing as a "normal sense of the phrase." Things means precisely what they mean, no more and no less, and there is only one definition of "run out" that can be applicable in this case and that is to literally have no more left. When you run out of food, it isn't that you still have a can in the pantry but don't really care for it, it means that you have actually no food left. Period.  So, therefore, he agrees with me that at some point we will no longer wish to continue to pump oil out of the ground and that there will still be oil in the ground at that point. We will not have "run out" of oil because, at some future time, when the costs are no longer so prohibitive, we might choose to go back and extract some more. The fact that this is the case is seen in the current extraction of shale oil, which once was cost-prohibitive but now, through enhanced technology and due to a high equilibrium price for oil, is now cost-competitive.

Then he goes on and says, "Madjd-Sadjadi is hoping that no one, including himself I would imagine, will notice that the logic of resource depletion and the way it shows how we will never “run out” does not makes it inevitable that there will be some equally good renewable that we can “switch to” when the moment arises.  Groggy and groping in the dark for some sort of switch, like many economists, he doesn’t seem to entertain the fact that many switches simply toggle between on and off."

Wrong!  First, I do not state that it is "inevitable that there will be some equally good renewable that we can "switch to" when the moment arises."  I simply said that we would switch to renewables. The fact that we are not currently using these renewables is a testament to the fact that they are not "equally good"!  If they were "equally good", we naturally would have switched before but they must be inferior to oil at the current price point simply because if they were "equally good", we would be indifferent at the current price between them and oil and thus would switch over as soon as the price of oil rose (but we didn't even when a barrel of oil was hovering 20% higher in cost than it is today). Might we end up with something that is worse than our current situation? Possibly. But will it be catastrophic and mean the world is coming to an end? Absolutely not. You see, Mr. Lindberg, I am not relying on us not to have some transition pains nor that we will not find ourselves with hardship. However, unlike you, I am not "Groggy and groping in the dark for some sort of switch" when the lights go out. I have a flashlight already in my hand and, while it isn't as good as my electricity, it will make do until I can locate the fuse box and replace the blown fuse. Oh, and what happens if the blown fuse cannot be replaced?  So then it cannot. However, it doesn't mean that I will stay in the dark. I also have matches, candles, and a whole host of other options. Just because it isn't necessarily going to be as good as oil doesn't mean that it isn't going to be adequate for a time and, once I realize I do not have oil available at a competitive price, I can always switch to something else, even if does mean some minor (or even major) inconveniences for a time.

"The whole proposition depends, at any rate, on some sort of quasi-magical belief that high cost itself can reliably synthesize raw materials as some sort of automatic price-generated feverish wish-fulfillment."

Wrong again! If the price rises high enough, we already have the technology and the know-how to switch over. In petroleum-poor societies (such as Germany in the 1920s and South Africa during apartheid) oil was made using the Fischer-Tropsch process.  Today we have buses running on natural gas (and there is a lot greater supply of natural gas that we can still tap) and cars running on electricity (which is usually generated by coal and we have an even greater supply of that).  If we do not have energy in the future it will not be because nature denied us, it will be because we chose to limit ourselves (by deciding that we shall not drill in certain areas, that we shall not have nuclear power, that we shall not dig for coal, we decide to dramatically reduce carbon production, etc.).

These options may not be as energy efficient as oil but it hardly means that we should worry about oil not being easily available. There is nothing magical about the fact that people will do whatever they can to save time and money using technology that actually exists now and they will do their best to find new ways to save time and money through innovation.

The essential difference between Malthusians and those of us who refuse to buy into their doomsday scenarios is that we have far more faith in human ingenuity and rationality than anyone in their camp does.