Archive for September, 2005
The Future, Vol. 2
We are all doomed.
Here’s the flip side to my last post. This will probably sound more like the typical tadfad content you’re used to. I’ll cut to the chase: The looming energy crisis that will come to define the 21st century is simply unavoidable. It is far too late to begin coming up with a strategy to combat the catastrophic forces lurking just around the corner. Worse, we simply don’t have enough remaining energy to successfully implement a new energy infrastructure.
Those are some pretty bold statements to be throwing around willy-nilly. I’d better back them up with something resembling logic.
First, let me establish the fact that there is a coming energy emergency. This is pretty easy–the majority (85% give or take) of the energy we use worldwide comes from three sources: oil, coal and natural gas. All three are very energy-dense, meaning you get a lot of bang for your burn. All three are also rich in carbon, so burning them releases a substantial amount of carbon, in the form of carbon dioxide, into the atmosphere. And here’s the kicker: All three are finite resources that are near or past their production peak (with the exception of coal, which has another 50 years or so).
The economics and politics of a peaking resource are fascinating. The resource does not simply “run out”. We’re never going to pump the last barrel of oil out of the ground and then say “okay, we’re done”. Far from it. Instead, oil production will gradually become more difficult, more expensive, and more susceptible to political shenanigans. The real tricky part is that we won’t know when peak production occurs until a year or two later. Near peak, we will experience a period of price and supply fluctuation as oil companies try desperately to uncover new oil sources and take advantage of high prices. At the same time, our government will [likely] be in a state of denial about the reality of the situation and start making desperate moves. (Think: the invasion of a Middle Eastern nation under false pretense.) All the while, worldwide demand will be growing while the supply continues to shrink.
Maybe the free market will save the day. But more realistically, the free market simply lacks the power to fix this problem. The market saved the day when we moved from wood to coal and from coal to oil, but this time around it’s going to be much different–we don’t have a new, cheap, plentiful energy resource to turn to. The oft-cited “hydrogen economy” is a myth; hydrogen requires energy to create. (We can’t drill for hydrogen!) Renewable energies will play a role, but I’m at a loss for how we can run an oil-based economy on wind, solar, hydro, and other renewables.
Worse, it may already be too late. Consider: It takes X amount of energy to produce a wind turbine or a solar panel or a hydroelectric dam. To replace the energy lost when oil and natural gas become economically impossible, we would need to expand our renewable infrastructure by 875%. Imagine how much pure energy is required to build, install, and maintain such a vast infrastructure. Where is it going to come from? Now factor in the political capitol required, the updates to our aging transmission lines, and the added dilemma of how to power transportation vehicles with renewable electricity and you can begin to see the awesome size of the dilemma we are facing.
Can the market alone fix our problems? Will any future president have the courage to face the facts and risk Carter’s fate? What about global climate change and the added costs and problems associated with it? It is foolish to imagine that the power of a free market will magically solve our pending energy emergency.
Future historians will look back and this time and wonder, “did they see it coming?”
Filed under Uncategorized : Comments (0) : Sep 28th, 2005
The Future, Vol. 1
Everything will be fine.
If you know me or read this website, you know that I have a propensity to warn everyone of the impending doom soon to reach us. The reason, I’ve said, is the end of cheap oil. Well, today I’m singing a different tune. Even though we will eventually move on from cheap oil, it won’t be all strum und drang. Rather, the power of the free market and globalization will enable our civilization to gracefully move beyond oil.
“Why Tad,” you ask. “That’s a rather bold statement. Why the change of heart?” Simple, really. Worldwide, there are thousands of individuals who collectively have the power to influence the direction of popular economic and political thought. These individuals hold two key distinctions that separate them from mere mortals like myself: They are very well educated and well aware of the issues facing the world in the coming decade and they have billions of dollars invested in the current system and would like those investments to continue to earn money. In short, they are too well educated, well connected, and wealthy to let a thing like oil shortages creep up unnoticed.
Not only do the “influential individuals” mentioned above have the knowledge to avoid an oil catastrophe, they have the means. This is where the beauty of the free market comes into play. As oil becomes less and less abundant, it will naturally increase in price due to the supply/demand curves you learned about in Econ 101. The magic thing about the free market is that consumers will (almost) always seek out the cheapest way to fill a need. If gasoline is selling for $5 a gallon, and ethanol is selling for $3, you’d better believe that more and more consumers will be filling up with ethanol.
Oil’s held tenure as energy boss for so long because it is so cheap and easy to extract. Once the price of oil starts to rise, something new will come in to fill its place. We might see some reconfiguration of energy use, such as a renewed interest in public transportation, but in general our lives won’t need to radically change. Smith’s invisible hand will gracefully clear oil off our table and replace it with whatever is next.
And it will be good.
Filed under Uncategorized : Comments (0) : Sep 23rd, 2005
Is this the magic bullet?
I was reading Slashot today and stumbled upon this little dandy. Some crazy Canadian is 12 months away from marketing a product that will not only decrease fuel consumption by 10-40%, but will also eliminate most of the pollutants coming out the end of a car’s tailpipe. Too good to be true? We’ll have to wait and see.
This is exactly the type of magical product that we need to make a safe and happy transition away from cheap oil. I really hope it’s true.
Please read the article.
Filed under Uncategorized : Comments (0) : Sep 18th, 2005
The Power of Advertising
First, apologies to all of you who expect new posts every now and again. I’ve been really bogged down for the last few weeks getting ready for classes to start and whatnot. But have no fear, now that classes are going again I should be updating the ol’ website more often.
I’ve accidentally been conducting a rather fascinating study for the past six months or so and I’m ready to present the results. I think you’ll dig it too. Here goes:
I don’t really watch TV anymore. At least, not normal TV broadcasts. I watch my favorite HBO/Showtime shows using On-Demand and I usually download the Daily Show and Mythbusters and watch them on the computer. Other than that, I watch less than an hour of TV in the average week.
The reason I abandoned broadcast TV is pretty simple: my schedule and the broadcast schedule seldom lined up, so it’s much more convenient to watch when I want to, instead of when they expect me to want to watch. So instead of watching the Daily Show at 10pm when I’m usually preoccupied, I watch it while eating lunch the next day. Makes sense.
What I’ve discovered is that there is a (mostly) unintended and quite fortunate side effect of abandoning broadcast TV: no advertisements! This is beneficial for the obvious reason of saving time–ads usually account for about 10-15 minutes of every hour of programming. Time is money, yadda yadda yadda, now I’m rich. Or something.
What I’ve found to be remarkable is that by avoiding [most] TV ads for the last six months is that I’ve noticed an observable decrease in my discretionary spending. Simply put, I buy less junk that I don’t really need. Furthermore, when I do watch broadcast TV ads, I’m a much more skeptical and critical viewer; I’ve become far more sensitive to their ploys to make me spend my money.
Once I began developing this “less ads = less spending” hypothesis, I took it one step further. I no longer read catalogs, peruse sites like newegg.com, or hunt for bargains at techbargains.com. Combined, my anti-advertising kick has dramatically reduced my monthly credit card bill. Yeah!
I strongly encourage you to try it on your own. Start with the catalogs. Those are easy to ditch. And unsubscribe from any “hot-deal” emails you may receive from retailers. If you have the means, a Tivo is really handy for skipping over commercials. Give it some time and you may find that your spending drops off too.
It’s amazing how much junk we buy that we don’t really need.
Filed under Uncategorized : Comments (0) : Sep 9th, 2005
