Peak Iron?

[Pendleton]

That's what they all say. They also continually bring up the EROEI argument, which is a red herring - we have no lack of energy, and oil's main virtue was just that it was a particularly convenient form of stored energy. Besides, we take cheaper energy in one form and convert to a more portable, more expensive form with negative ERORI all the time (just look at most batteries).

If I may field this. The EROEI argument is not about a lack of energy in the way you're thinking of it. If we are coping with less and less energy available to produce more convenient sources of energy, then this will affect economic activity, and in fact, already is. Which fuels have enabled us to use a negative EROEI in the past? Fossil fuels. They are all in rapid depletion, not just oil, and all are mandatory for production of the vast amounts we use today. There are now alternatives. None, nada. Zilch. Therefore, the idea that expending 1 barrel of oil equivalent to get 100 barrels of oil energy in return sliding down to a 1:1 ratio will still be a viable plan is simply hogwash. It will long be uneconomical before we even hit those thermodynamic brick walls.

Additionally, someone mentioned price spikes and how they didn't have any drastic impact on the economy. I hope this person doesn't practice economics at all (ignoring that it's also a fallacy). In any case, peak oil won't bring about a sudden economic catastrophe. Peak oil exports will. And it is doing it now in the country I sit and type this post from, so please don't pooh-pooh something that is having an impact on me already.

[Guardsman Bass]

That's what they all say. They also continually bring up the EROEI argument, which is a red herring - we have no lack of energy, and oil's main virtue was just that it was a particularly convenient form of stored energy. Besides, we take cheaper energy in one form and convert to a more portable, more expensive form with negative ERORI all the time (just look at most batteries).

If I may field this. The EROEI argument is not about a lack of energy in the way you're thinking of it. If we are coping with less and less energy available to produce more convenient sources of energy, then this will affect economic activity, and in fact, already is. Which fuels have enabled us to use a negative EROEI in the past? Fossil fuels. They are all in rapid depletion, not just oil, and all are mandatory for production of the vast amounts we use today. There are now alternatives. None, nada. Zilch. Therefore, the idea that expending 1 barrel of oil equivalent to get 100 barrels of oil energy in return sliding down to a 1:1 ratio will still be a viable plan is simply hogwash. It will long be uneconomical before we even hit those thermodynamic brick walls.

"All in rapid depletion"? Hardly. The US has several hundred years' worth of coal, good for power consumption and for liquid fuels if we head down that road (and some countries have - South Africa gets more than a third of its liquid fuel from coal-to-liquid plants).

But we don't need it to last several hundred years. We just need it to smooth out the transition to a society that doesn't consume so much fossil fuels in its transportation sector, which is a matter of decades (it took about three decades for the US to transition to a society built around cars).

Besides, why the assumption that it will be "uneconomical" to convert cheap electrical power into a more expensive stored form? We've got no lack of potential source of energy for electrical power even aside from fossil fuels, particularly over an adjustment period of more than 10 years.

Additionally, someone mentioned price spikes and how they didn't have any drastic impact on the economy. I hope this person doesn't practice economics at all (ignoring that it's also a fallacy). In any case, peak oil won't bring about a sudden economic catastrophe. Peak oil exports will. And it is doing it now in the country I sit and type this post from, so please don't pooh-pooh something that is having an impact on me already.

I was the one who pointed that out in this thread, although Destructionator mentioned it in an earlier one. The price of oil nearly tripled in the 1970s, and then nearly tripled again from 2000-2011. I notice that all-out economic calamity didn't ensue, although the US had issues with inflation in the 1970s (and brief periods of shortage, mostly because of foul-ups in the distribution network). That's after inflation.

As for Peak Oil Exports, I don't know what you're talking about. Is that supposed to be worse than 1973, when OPEC completely cut off oil exports to the US?

[Pendleton]

"All in rapid depletion"? Hardly. The US has several hundred years' worth of coal, good for power consumption and for liquid fuels if we head down that road (and some countries have - South Africa gets more than a third of its liquid fuel from coal-to-liquid plants).

But we don't need it to last several hundred years. We just need it to smooth out the transition to a society that doesn't consume so much fossil fuels in its transportation sector, which is a matter of decades (it took about three decades for the US to transition to a society built around cars).

Coal reserves of "several hundred years" don't tally with USGS estimates, which peg good supply at up to 2030 for the most prosperous mines like Gillette. It also assumes you're not going to be wanting any economic or population growth in that time, otherwise you can cut those estimates again (and even more for moving from anthracite to lignite etc.) Nazi Germany also used coal, but it is not a process that scales up well, is hideously expensive and inefficient.

Frankly, the coal should be left in the ground. We're already in dangerous warming territory as it is without going back to good ol' King Coal.

Besides, why the assumption that it will be "uneconomical" to convert cheap electrical power into a more expensive stored form? We've got no lack of potential source of energy for electrical power even aside from fossil fuels, particularly over an adjustment period of more than 10 years.

Where's the cheap electric power coming from? Gas and coal are the mainstays globally, and both are increasingly being diminished with their prices going up to reflect that. Nuclear and renewables simply aren't going to replace those fossil fuels.

There is also the Hirsch report and Marchetti paper on energy transitions. I'll try and find a link when I have more time, but they detail the predicament one faces when the need for a whole new energy source is required.

I was the one who pointed that out in this thread, although Destructionator mentioned it in an earlier one. The price of oil nearly tripled in the 1970s, and then nearly tripled again from 2000-2011. I notice that all-out economic calamity didn't ensue, although the US had issues with inflation in the 1970s (and brief periods of shortage, mostly because of foul-ups in the distribution network). That's after inflation.

As for Peak Oil Exports, I don't know what you're talking about. Is that supposed to be worse than 1973, when OPEC completely cut off oil exports to the US?

The Fed increased interest rates to fight inflation during those crises, which in turn led to the economic gloom of the early '80s and the '70s themselves were categorised by high stagflation. Hardly without incident, and that was a temporary problem. The oil increases of the last decade sent the precarious real estate and finance bubbles into the popping zone, which then precipitated the crises we have now with credit and commodity inflation.

Peak exports is the scenario where a country that produces oil, starts to utilise more of its own product and/or experiences declines in this export amount through natural oil field decline. At its simplest, it is the reduction of oil on the export market for consumption by those who import it. The UK and Norway along with Indonesia and Saudi Arabia show varying degrees of this phenomenon. The UK, for instance, is looking at around 20% reduction on oil produced today as it did from last year on some fields, which is making the Treasury especially nervous with already hard to meet deficit cut targets. Saudi Arabia is watching excess capacity being eaten up by domestic usage (they burn oil in powerplants for A/C, desalination and other electrical requirements) and Indonesia is now an importer of oil like the UK, when only a few years prior both were enjoying good export markets.

Also remember, in the '70s the USA was still producing the vast majority of its oil internally and had only just needed to import oil. This is the reverse today. They only needed 10% additionally to home produced oil, whereas now it's over six times that value. Keep in mind, the US is also more susceptible to oil shocks through a variety of other economic and fiscal matters.

[The Duchess of Zeon]

To address the original point of this thread, the Arc Furnace was invented (remember the original prediction was in 1910) which made large scale recycling of iron and steel possible for very cheap, cheaper in fact than making new iron and steel with traditional processes, so that a majority of iron and steel in the world today is recycled, even a large majority, and yet prices have dropped despite the recycling process. This, of course, means that the original concerns were eliminated by the progress of technology. It's equivalent to successful mass-produced cellulosic ethanol and biodiesel for cheaper than fossil fuels and the impact of such an invention on peak oil.

[Guardsman Bass]

Coal reserves of "several hundred years" don't tally with USGC estimates, which peg good supply at up to 2030 for the most prosperous mines like Gillette. It also assumes you're not going to be wanting any economic or population growth in that time, otherwise you can cut those estimates again (and even more for moving from anthracite to lignite etc.) Nazi Germany also used coal, but it is not a process that scales up well, is hideously expensive and inefficient.

The key being "good supply" at the best mines. I didn't see that estimate at the USGC website either - do you have a link to specific reports?

Frankly, the coal should be left in the ground. We're already in dangerous warming territory as it is without going back to good ol' King Coal.

Agreed. I'm not a supporter of expanding the use of coal and natural gas.

Where's the cheap electric power coming from? Gas and coal are the mainstays globally, and both are increasingly being diminished with their prices going up to reflect that. Nuclear and renewables simply aren't going to replace those fossil fuels.

Gas and coal prices haven't been consistently going up, though - at least not in the US. Gas prices hit a high in the mid-2000s, but they've drastically dropped since then. Coal prices have risen, but the rise in terms of real dollars is not that great (in fact, coal now is mostly cheaper than what it was before 1990 in real dollars).

The Fed increased interest rates to fight inflation during those crises, which in turn led to the economic gloom of the early '80s and the '70s themselves were categorised by high stagflation. Hardly without incident, and that was a temporary problem. The oil increases of the last decade sent the precarious real estate and finance bubbles into the popping zone, which then precipitated the crises we have now with credit and commodity inflation.

The economic gloom of the 1970s and early 1980s was still fairly tame compared to earlier crisises, such as the Great Depression and earlier Panics. I'm skeptical that the oil increases were responsible for the real estate and finance bubbles, as opposed to increased oil prices simply being a result of more dollars in the US economy.

[Pendleton]

The key being "good supply" at the best mines. I didn't see that estimate at the USGC website either - do you have a link to specific reports?

This was the first decent link I found summarising the findings. There was another, but it was focused on other tangental matters mainly.

Gas and coal prices haven't been consistently going up, though - at least not in the US. Gas prices hit a high in the mid-2000s, but they've drastically dropped since then. Coal prices have risen, but the rise in terms of real dollars is not that great (in fact, coal now is mostly cheaper than what it was before 1990 in real dollars).

Demand has been, though, which has obviously helped the coal industry make the most of the increasing use of their product, especially with coal being used to replace nuclear in some countries. The Chinese and Australians are the textbook example of a coal industry in full pelt, which has driven prices for those competing with China for said coal. Your mileage may vary depending on whether you need coal and whether you produce a lot internally or require imports, like China now does. This appears to be changing, though, given China's slowing growth.

The economic gloom of the 1970s and early 1980s was still fairly tame compared to earlier crisises, such as the Great Depression and earlier Panics. I'm skeptical that the oil increases were responsible for the real estate and finance bubbles, as opposed to increased oil prices simply being a result of more dollars in the US economy.

Remember, it was a global predicament, not just the US. These bubbles are everywhere, from the PIIGS to the BRICS, and it's really academic whether oil led to the bursting or that bursting was coming either way (which it was). It's changed the game, and higher energy prices will impact on everything from here on, which includes replacements. To look at Obama's speeches, one would wonder how he can paint such a rosy picture for an economy that is only keeping the lions away due to a unique position its currency is in. The EU is a basket case as it is without the US following it into anæmic growth or outright recession.

Oil, as it stands now, is falling due to the gloomy numbers constantly coming out of various supposed economic powerhouses. I like having to pay less at the pump, but not if it means the company I work for is now looking at redundancies, as was announced this week. It's a nasty Catch-22, because we have a system predicated on growth, yet if we grow, energy limits impose a barrier to that, along with the credit market tightness and debt, or inflationary pressure on food and other items. I do not envy the treasurers of any nation now.

[Blayne]

I would like to point out that the 6% drop in oil imports from the OPEC embargo actually caused a recession with cars lining up at gas stations for miles.

All in rapid depletion"? Hardly. The US has several hundred years' worth of coal, good for power consumption and for liquid fuels if we head down that road (and some countries have - South Africa gets more than a third of its liquid fuel from coal-to-liquid plants).

But we don't need it to last several hundred years. We just need it to smooth out the transition to a society that doesn't consume so much fossil fuels in its transportation sector, which is a matter of decades (it took about three decades for the US to transition to a society built around cars).

Was largely already answered in this thread, and also answered in the video's that the energy content extracted from this coal is going lower as we switch from good coal to bad coal deposits. You don't make any particular argument as to why this won't cause significant economic problems beyond "N'aaaawh, it won't be that bad."

To address the original point of this thread, the Arc Furnace was invented (remember the original prediction was in 1910) which made large scale recycling of iron and steel possible for very cheap, cheaper in fact than making new iron and steel with traditional processes, so that a majority of iron and steel in the world today is recycled, even a large majority, and yet prices have dropped despite the recycling process. This, of course, means that the original concerns were eliminated by the progress of technology. It's equivalent to successful mass-produced cellulosic ethanol and biodiesel for cheaper than fossil fuels and the impact of such an invention on peak oil.

I do not agree that there is an equivalence, I believe it is very naive if not in fact entirely wishful thinking that we can deploy the needed technologies and replace the existing infrastructure in time to avoid a major crunch and/or societal readjustment that would be uncomfortable I dare say for first worlders.

You were using the fact that prices don't predict crisises as a criticism against capitalism. I pointed out that they're not supposed to predict those anyways.

As Spoonist says, I was refuting the notion that because the "market" reacts to something doesn't mean the technologies that adapt from that reaction will arrive in time to solve the crisis before millions die.

It costs us plenty to force a change to a more expensive form of new energy and energy infrastructure through regulation and taxation.

And the collapse of the global economy is cheaper than putting in the effort not to avert it?

Government spending over 50% of GDP is not the same as a "command economy". It just means that the government is doing a shit-ton of purchases and borrowing in the economy.

Than you definition as to what constitutes a command economy is so narrow that not even the USSR would qualify under it.

The point is, a national plan is not automatically central planing, and neither is central planning automatically disadvantageous in all situations; in fact it is a crucial requirement for large complex societies to survive existential threats to survival.

[Surlethe]

By the way, what's the evidence of economic gloom in the US during the '70s? Averaging over the recession in 1974, the real economy grew at over 3%/yr.

[Guardsman Bass]

I would like to point out that the 6% drop in oil imports from the OPEC embargo actually caused a recession with cars lining up at gas stations for miles.

Those shortages were caused by Nixon's price control regime, not the sudden drop in oil imports. After the controls were lifted, the shortages disappeared.

Was largely already answered in this thread, and also answered in the video's that the energy content extracted from this coal is going lower as we switch from good coal to bad coal deposits. You don't make any particular argument as to why this won't cause significant economic problems beyond "N'aaaawh, it won't be that bad."

Again, it's a matter of time. I don't think you realize how heavily a society like ours can shift its residential, industrial, and infrastructure set-up over a period of 2-3 decades.

I do not agree that there is an equivalence, I believe it is very naive if not in fact entirely wishful thinking that we can deploy the needed technologies and replace the existing infrastructure in time to avoid a major crunch and/or societal readjustment that would be uncomfortable I dare say for first worlders.

I'm sure the turn-of-the-century thinkers who were frightened that New Yorkers would be hiking through 20 feet of horseshit before cars came along thought the same thing. What makes you so special? The fact that you think oil is just so good of an energy source that we can't replace it without massive pain?

As Spoonist says, I was refuting the notion that because the "market" reacts to something doesn't mean the technologies that adapt from that reaction will arrive in time to solve the crisis before millions die.

The technologies already exist. There's no lack of alternatives for electrical power besides coal, gas, and oil, and shifting to a much more urban residential pattern drastically reduces your need for liquid fuels in the transportation sector. And before millions die, millions will move - particularly in the US.

[Broomstick]

And before millions die, millions will move - particularly in the US.

Move where?

Those who blithely assume Americans will complacently stack themselves into urban highrises are ignoring both the increased crime rate in dense US urban areas and the cultural pushback.

While some will, of course, move into city centers I think a substantial number won't. We may see more telecommuting and on-line shopping as a response to increased transportation costs as much as we see people moving to dense urban residences.

[Surlethe]

I want to be clear about your point, Broom: You're saying that people will substitute from long commutes into telecommuting and on-line shopping before they substitute into shorter commutes, right? I don't think you're contradicting Guardsman Bass, you're adding to his point that people will alter their behavior before they die.

[Guardsman Bass]

What Surlethe said. I called it "moving", but it's really a whole-range of responses to higher transportation costs associated with rising fuel prices.

[Pendleton]

By the way, what's the evidence of economic gloom in the US during the '70s? Averaging over the recession in 1974, the real economy grew at over 3%/yr.

As already stated, the stagflation and high unemployment. I don't think we need to go into how vague and useless GDP figures can be for gauging the economic and social health of a country, as your data suggests and as others would argue. You'll also notice since the '70s that company productivity and profits have gone up a lot too, and yet this isn't indicative of the workers today being better off for it, the opposite in fact.

[Surlethe]

That link does a great job of describing why perceptions don't often match reality. We perceive the 1970s as a time of slow growth and stagnating employment, when in fact the economy grew robustly and the employment-to-population ratio reached its highest postwar point yet. The unemployment rate was high precisely because the economy didn't stagnate: people didn't drop out of the workforce after they lost their jobs. With justification, too -- after 1975 the economy steadily gained jobs and was almost back to full employment by the time of Volcker's disinflation.

But I digress. We're talking about oil and its effects on the macroeconomy, including the argument that oil shocks strongly depress economic activity, with case study the 1970s. I don't see evidence of that in the data presented, and have presented some evidence against it.

[Simon_Jester]

And before millions die, millions will move - particularly in the US.

Move where?

Those who blithely assume Americans will complacently stack themselves into urban highrises are ignoring both the increased crime rate in dense US urban areas and the cultural pushback.

While some will, of course, move into city centers I think a substantial number won't. We may see more telecommuting and on-line shopping as a response to increased transportation costs as much as we see people moving to dense urban residences.

Or they could (in effect) found new cities- relatively small ones sprinkled around the outskirts of the current urban centers, but still urban in the sense of dense habitation and high-rises. We already see some of this in certain suburbs of particular cities- they grow their own "high rise" core of 10-20 story buildings. There's room for people to move into those, without the nation committing itself to dealing with the social problems of the existing inner cities.

Which is arguably unfortunate, since it wouldn't be impossible to solve those problems, if we were as interested in doing that as in, say, bombing terrorists.

EDIT: So we can imagine the wave of the future being 'megacities' with large centralized populations, surrounded by clouds of 'microcities' with populations on the close order of a hundred thousand, interconnected mostly by rail because if automotive fuel hits ten dollars a gallon in 2010 dollars, commuting between microcities becomes less than fully palatable.

Some work can be handled by telecommuting from an arbitrary location, but a lot can't. So you still need concentrations of labor where people can all work together in roughly the same place. Those concentrations are currently spread out widely because bringing people together from the edges of a fifty-mile catchment basin is cheap. If they're forced to rely on mass transit, those concentrations will contract into clumps, and probably strings drawn along public transport routes.

[Guardsman Bass]

Or they could (in effect) found new cities- relatively small ones sprinkled around the outskirts of the current urban centers, but still urban in the sense of dense habitation and high-rises. We already see some of this in certain suburbs of particular cities- they grow their own "high rise" core of 10-20 story buildings. There's room for people to move into those, without the nation committing itself to dealing with the social problems of the existing inner cities.

There's also suburban "infill", which is just making existing suburbs more dense by adding buildings like those you describe. The suburb I'm living in is trying to do that, although it's still stuck with some older height limits regulations.

Which is arguably unfortunate, since it wouldn't be impossible to solve those problems, if we were as interested in doing that as in, say, bombing terrorists.

There are some solutions, but they tend not to be popular with the existing residents. Gentrification and re-zoning both tend to drive money back into urban areas, but they also generally raise issues with the existing residents when it leads to new people, new buildings, and higher rents.

EDIT: So we can imagine the wave of the future being 'megacities' with large centralized populations, surrounded by clouds of 'microcities' with populations on the close order of a hundred thousand, interconnected mostly by rail because if automotive fuel hits ten dollars a gallon in 2010 dollars, commuting between microcities becomes less than fully palatable.

Rail seems to be the most likely situation for long-distance transit between cities, but it really depends on how expensive alternatives to gasoline/diesel are, and what the existing power infrastructure is. If the infrastructure is there, you could have automated, fully electric cars that travel between cities and re-charge at various points, although I think that's much more likely to happen within cities.

[Broomstick]

What Surlethe said. I called it "moving", but it's really a whole-range of responses to higher transportation costs associated with rising fuel prices.

Then perhaps you should come up with another word or phrase than "moving" as that leads to assumptions on the part of the reader. How about "change their behavior"?

You should also take into account how modern electronics makes changes possible that weren't possible back in the 1970's. For the most part telecommuting didn't exist, there was no way to make that possible for most jobs. Telecommuting alone can drastically reduce a person's ecological and fuel footprint.... provided the production of the necessary infrastructure (including the box on the desk at home) doesn't outweigh the impact of the alternative. After all, production of modern electronic devices requires energy and brings environmental hazards.

Or they could (in effect) found new cities- relatively small ones sprinkled around the outskirts of the current urban centers, but still urban in the sense of dense habitation and high-rises. We already see some of this in certain suburbs of particular cities- they grow their own "high rise" core of 10-20 story buildings. There's room for people to move into those, without the nation committing itself to dealing with the social problems of the existing inner cities.

That only works in affluent suburbs. Crowding the wealthy (relatively speaking) into highrise boxes doesn't seem to cause social problems. Crowding the poor into highrise boxes, even those a mere 4-5 stories tall, does, as proven by the disastrous housing projects in the US in the 1960's and 1970's, leading to most major cities tearing a lot of those same projects down in the 1990's and early 2000's

While crowding into urban centers may be necessary in some locations the US actually does have the land area to be less dense and decentralized. There is also the problem of tearing down old but usable housing stock and the cost/impact of building new.

Some work can be handled by telecommuting from an arbitrary location, but a lot can't. So you still need concentrations of labor where people can all work together in roughly the same place. Those concentrations are currently spread out widely because bringing people together from the edges of a fifty-mile catchment basin is cheap. If they're forced to rely on mass transit, those concentrations will contract into clumps, and probably strings drawn along public transport routes.

And thus we will return to an earlier pattern of development, such as when Chicago grew along its light rail routes.

True, not everything can involve telecommuting. However, taking one day a week to run a series of errands in sequence is less costly and less impactful than a daily commute. In the old days in the US, before the rise of the family auto, you went to market or town once a week, or perhaps once a month, and did all your business there at once instead of running spur of the moment trips.

What would also be helpful, though I sincerely doubt it will take place, is a reduction in traffic volume, reduction in vehicle size, and better drivers which would make commuting in two or one person vehicles (such as motorcycles) more practical, which would also represent significant savings. However, there are too many crazy people in SUV's to make that a really viable solution for many. It also leaves the problem of how to cope in the winter.

[Pendleton]

That link does a great job of describing why perceptions don't often match reality. We perceive the 1970s as a time of slow growth and stagnating employment, when in fact the economy grew robustly and the employment-to-population ratio reached its highest postwar point yet. The unemployment rate was high precisely because the economy didn't stagnate: people didn't drop out of the workforce after they lost their jobs. With justification, too -- after 1975 the economy steadily gained jobs and was almost back to full employment by the time of Volcker's disinflation.

But I digress. We're talking about oil and its effects on the macroeconomy, including the argument that oil shocks strongly depress economic activity, with case study the 1970s. I don't see evidence of that in the data presented, and have presented some evidence against it.

The US economy declined over 3% still, and unemployment rose. Again, I don't see how this isn't depressive. Keep in mind, as I have already stated, there are variables now that are completely different, making any direct comparison with previous oil shocks somewhat redundant. The US alone went through a massive conservation and substitution phase and was not anywhere near as efficient as it is today with oil, nor did it rely on as many imports as they now do. The paper by James Hamilton shows a strong link between oil price and recession, even in instances such as 2007-8 where other factors like housing were what set the economy on edge.

By itself peak oil wouldn't be an insurmountable problem. But it isn't by itself, and comes at a time of increasing strain on the global economy and ecosphere itself, with all the low hanging fruit (i.e. the efficiency strategies employed since the '70s and subsequent shocks) that would mitigate such effects being picked already.

[Surlethe]

The US economy declined over 3% still, and unemployment rose. Again, I don't see how this isn't depressive.

Yes, over 1974, which means that when it grew, it was growing much faster than 3%. And as I said, unemployment rose because

The paper by James Hamilton shows a strong link between oil price and recession, even in instances such as 2007-8 where other factors like housing were what set the economy on edge.

Price? Maybe. Oil shocks, I believe, especially because central banks now are so afraid of headline inflation.

By itself peak oil wouldn't be an insurmountable problem. But it isn't by itself, and comes at a time of increasing strain on the global economy and ecosphere itself, with all the low hanging fruit (i.e. the efficiency strategies employed since the '70s and subsequent shocks) that would mitigate such effects being picked already.

I'm of the opinion that it's still likely not an insurmountable problem. We know that there are alternative technologies, we know there's still massive scope for shifting away from oil-intensive transportation and manufacturing, and we don't know what technology still lies in store. Give the market plenty of flexibility to adapt to the problem, subsidize research, and be prepared to implement martial law and ration food if you absolutely have to. (Oh, and let the speculators flood the oil futures markets. The more we bring future prices to the present, the more we adjust now rather than when shortages actually kick in.) Oh well, I don't really have time to argue the points, so I'll just leave it at that and maybe chime in on minor points later.

[Simon_Jester]

That only works in affluent suburbs. Crowding the wealthy (relatively speaking) into highrise boxes doesn't seem to cause social problems. Crowding the poor into highrise boxes, even those a mere 4-5 stories tall, does, as proven by the disastrous housing projects in the US in the 1960's and 1970's, leading to most major cities tearing a lot of those same projects down in the 1990's and early 2000's

Broomy, you could greatly concentrate housing in modern America just by making the transition from single-family suburban homes on big lots toward three-story rowhouses. That's really all that would be necessary to shift the paradigm from a uniform blob of suburbs into 'microcity' nuclei.

Also, crowded public housing is mostly problematic when all the inhabitants are poor. If we cared to fix this it would not be that hard- there's plenty of room for housing that's affordable on middle and upper working-class salaries (30 to 50 thousand a year) which can be mixed with modest housing subsidies to make it affordable at the low end.

Any form of housing, no matter what, that's occupied entirely by very poor people and mostly by unemployed or underemployed people, is a problem. It will be at risk of becoming a magnet for crime and malaise.

It's not unfixable- but it requires an outside force to fix it; the housing market won't do the job because it's not on the radar for capitalism. Indeed, the housing market prefers to segregate people strongly by income, into categories like 'filthy rich,' 'dirt poor,' and several shades in between. Breaking up that segregation is very much possible, given the desire and willingness to organize it.

[madd0ct0r]

just a side note - I've come across some discussion about suburban infill and densificaton that notes that older people seem to prefer living in a denser pattern then young familys. The babyboomers are retiring, have no kids in the house any more and are getting to the point where having close neighbours feels like a nice thing.
It's an intresting social thesis in isolation, but it ties in intrestingly with the stuff in this thread - we might be seeing grey haired new centers (villages) with relatively dense pops across a carpet of suburbia, with new rngs of townhouses and affulent apartment blocks spreading out from around big city centers.

[amigocabal]

I would be curious as to see him substantiate why 'capitalism' ie laissez faire economics could solve the issue beyond nitpickity naysaying.

Words

The well established and widely recognized problem with open markets when it comes to prices is that They. Predict. Shit. All. So running out of oil? Science Knows! But does the ~invisible hand~ of the market? Nope.

And why would not the invisible hand of market not know?

Are not oil producers motivated by profit? Does it not make sense for them to know how much oil there is left, and offer the appropriate price?

Because of this it means that the technologies, laws, legislation and regulations that *could* solve the problem will not arrive in time.

Notwithstanding the old truism/heuristic of "Prevention is better than cure" where we can avoid the wars, strike, price shocks, societal collapse, poisoned water supply, destroyed ecosystems and my personal favorite mass die offs from an extinction event from entirely man made problems entirely.

Now we go from a discussion about peak iron to mass die-offs.

Also notwithstanding the fact that in one of the worser case scenarios of ~structural collapse of society~ the "free market" won't exist and any solution will be via government, martial law and emergency legislation that will probably wipe clean most if not all property rights.

I only need to point out that the USA was largely a command economy during WWII to fight an existential threat that the market can't solve to disprove the "command economy doesn't work" claim.

Structural collapse of society? All from peak iron?

Mike P explains what is wrong with Peak Oil hysteria.

Peak Oil hysteria violates pretty much every economic precept you can name. Its most grievous error is in failing to understand that effects happen at the margins. The thought that a production peak would raise prices enough to collapse the entire economy depends on the fallacy that everyone will respond to a shock identically and equally. But -- barring idiotic government action that forces everyone into such lockstep behavior -- the reality is far different. Peak oil production means that oil production will decline in the future: It does not mean that it will instantaneously end. In actuality as prices rise, those at the high margin will move toward alternate sources of transportation energy, and those at the low margin will find alternatives to transportation. Those in the middle will suffer a higher price for oil, but will not suffer shortages.

How does Peak Oil conflict with what is observed in society? Well, societies prefer not to collapse. Peak Oil effectively counts on them to collapse.

[amigocabal]

I'm of the opinion that it's still likely not an insurmountable problem. We know that there are alternative technologies, we know there's still massive scope for shifting away from oil-intensive transportation and manufacturing, and we don't know what technology still lies in store. Give the market plenty of flexibility to adapt to the problem, subsidize research, and be prepared to implement martial law and ration food if you absolutely have to.

What scenarios would require martial law?

(Oh, and let the speculators flood the oil futures markets. The more we bring future prices to the present, the more we adjust now rather than when shortages actually kick in.) Oh well, I don't really have time to argue the points, so I'll just leave it at that and maybe chime in on minor points later.

True, although I do understand why speculators would be skittish about speculating today.

Any of them who, back in July of 2008, speculated that oil would only go down to $120/barrel by December of that year, would have been financially ruined.

[madd0ct0r]

What scenarios would require martial law?

food riots, like were actually quite common across the world just before the great recession?

[Blayne]

And why would not the invisible hand of market not know?

If we have a common space, of limited size and value.

And there are 15 of us with our own flocks of sheep, and we all decide to do what is in our economic best interest to simply let the sheep get fat and eat all of the good grass.

Then we run out of grass, it is true that over there on that other hill there's more grass, but its brown grass and it doesn't give as much nutrients, going going there and back is very strenuous the weaker sheep slowly starve and die to health complications as they can't compete with the other sheep of our own flock, no less than the dozen other sheep herders and their flocks.

The invisible hand of the LORD dictated that each sheep should graze to his content, for did the LORD not giveth the land to be grazed? And grazed it was, and so on, and so forth until all the grass was gone.

True some herders made good money, and were prudent and invested in new grass, replacement grass, but it doesnt grow as fast, it doesn't give as much nutrients than even the brown grass next door, it doesn't even support all of the sheep in his own flock; dare not speaketh of the sheep in the other herds!

And so before the season was out 3 out of 4 sheep had starved in all herdes, the prudent herders provided their new type of grass.... for a price, the price that was fairly worth what the purchaser would pay for it, and pay dearly they did, until the other herders, the ones that had nothing left to hold dearly thus had nothing to sell were all that remained.

But they were the 12 of the 15 herders, and they got angry and wraithful at their lot in life, "It's not fair!" they cried out to the LORD, why the 3/15 should have the grass for their sheep, while the 12/15 loss even their paltry remaining sheep?

But the LORD was silent, for he did not exist. And the 13/15 grew angry, and hanged the 3/15, and took their grass that they had stockpiled and hoarded and refused to sell before it was too late.

What is the moral of this story?