Skip to comments.Why Alternative Energy Will Never Pencil Out
Posted on 07/09/2010 10:08:08 AM PDT by Faketan
Advocates of a smooth transition away from petroleum may be surprised by the consequences of huge swings in the cost of oil.
I first proposed a "head-fake" in the price of oil in 2008. My thesis was that the oil exporting nations had become so dependent on revenues from oil that even as prices plummeted in global recession, they would have no choice financially and politically to pumping every barrel they could. This would increase supply even as demand fell, causing prices to crash.
This dynamic would drive prices down to lows which are widely considered "impossible" in an era of looming Peak Oil. Oil: One Last Head-Fake? (May 9, 2008)
Since that entry was published in May 2008, oil shot up to $149/barrel and then sank to $40 a mere 18 months later--a nearly 75% decline in less than two years.
My updated "head-fake" scenario explains why alternative energy will never "pencil out" financially until it's too late: wild price swings will always undermine the financial viability of alternative energy.
What advocates of a smooth, seamless transition from the era of near-total dependence on fossil fuels to an era which draws upon many energy sources (a.k.a. "alternative energy") fail to grasp is the pernicious consequences of open-market pricing being set on the margins.
That is, if oil supply drops 10% from 84 million barrels a day (MBD) to 76 MBD, the price of oil will not rise a corresponding 10%--it will very likely double as the competition for the last few million barrels a day--the supply on the margin-- becomes fierce.
The reason is basic: there is no alternative as yet for oil--not even natural gas. In classic economics, the world will magically switch to some other alternative if prices get too high. The flies in this classic ointment are what I call the FEW essentials: food, energy and water: there are no "easy" alternatives and thus no upper limits on price. Full article at: Alternative energy
Didn’t read the full article, but the excerpt confirms what a lot of sensible (that is, non-libtard) folks have been saying all along.
So far the only really good use I have heard of for E85 is making stupendous horsepower in a modified Mitsubishi Evo. :) It’s a combination of ethanol’s higher knock resistance and charge-cooling properties, both of which work really well in a turbocharged engine.
Don’t make those sort of predictions. ‘Progress’ has a habit of standing scientific certainties on their head. As examples, I offer the now common laser and the now common superconductor. It will need a breakthrough something like these to make ‘alternative energy’ worthwhile, and experience shows that you cannot just sit down and invent the next technology. Thank you serendipity!
To produce enough to meet all US transportation needs it would require every acre of farm land in the US.
It requires extensive quantities of fresh water.
Vehicles require a LOT more of it since fuel mileage is reduced
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