Saturday, December 05, 2009

Thought for the Day: We Never Run Out of Natural Resources, We Just Find Better Alternatives

The Stone Age didn't end because we ran out of stones, and the petroleum age won't end because we run out of petroleum.

Likewise, the age of horse/animal power didn’t end because we ran out of animals, and we didn’t stop using steam power because we couldn’t build enough steam engines.

And the age of whale oil didn't end because we ran out of whales, and the age of using wood for heating homes didn't end because we ran out of trees.


At 12/05/2009 12:51 PM, Anonymous Anonymous said...

Survivorship bias! Lots of societies failed because of lack of resources. I can't name them because they don't exist anymore... err ... because I forgot my history.

At 12/05/2009 1:14 PM, Blogger ardyanovich said...

Your post makes it seem like the transition away from oil will be a painless process--that one day we'll just have some technology pop up and The Carbon Age will end without a whimper. It may turn out that way, but it's not set in stone.

At 12/05/2009 2:53 PM, Blogger Mark J. Perry said...


I'll update the chart later, but for now here are the raw data for "Petroleum and Natural Gas per Real Dollar of GDP" at this Link . I think the decline is even steeper than my graph here now, but I'll replace it later with an update one showing only petroleum and nat gas.

At 12/05/2009 3:18 PM, Anonymous Craig Newmark said...


The Doomsday Myth by Charles Maurice and Charles Smithson ( makes a similar point and they provide several excellent examples.

At 12/05/2009 3:44 PM, Blogger Roscoe said...

The part about coal isn't true, at least not for England. Carlo Cipolla, in Before the Industrial Revolution, quotes Edmond Howes writing in 1631 (pp. 289-290): "There is so great a scarcitie of wood throughout the whole Kinddom, that not only in the Citie of London, all haven-towns and in very many parts within the land, the inhabitants in generall are constrained to make their fires of sea-coal or pit-coal, even in the chambers of honorable persons, and through necessitie, which is the mother of all arts, they have of late yeares devised the making of iron, the making of all sorts of glasse and burning of bricke with sea-coal and pit-coal."

At 12/05/2009 8:08 PM, Anonymous Anonymous said...

Although we may not run out of resources, if prices for resources increase, we have to purchase less of something else. Energy is inelastic, so let me know what you want to do without.

You might want to think about conservation as a way to preserve your income and your resources. Now.

At 12/05/2009 9:03 PM, Anonymous Lyle said...

For Anon at 8:08 perhaps demand is inelastic at short time scales but it seemed aweful elastic for gasoline last summer. The graph Mark Posted in the prior post is all about elasticity of energy demand. The earlier graph showed that energy use per dollar of gdp started declining in 1972 when oil prices started up. Note the decrease in slope in 1985 when prices stabilized and started coming down. So the graph does show elasticity.
No one said a transition would not be painful, but painful does not mean the end of the world.
Interestly various documents show that we have decreased our carbon intensity between 1860 and 1980 by 30 % (A good bit of this is the switch from coal to oil and gas in rail roads (+ a big boost in efficency the steam loco was pretty but a terribly inefficient beast) and home heating, plus other areas. This story captures the point:

As noted if this trend had not happend we would be emmitting a lot more CO2, and I might add into 1950s style London Pea Soup Fogs

At 12/06/2009 1:53 AM, Anonymous GORE LIED said...

Julian Simon explained the subject matter of this post well in his book The Ultimate Resource II:

"More people, and increased income, cause resources to become more scarce in the short run. Heightened scarcity causes prices to rise. The higher prices present opportunity, and prompt inventors and entrepreneurs to search for solutions. Many fail in the search, at cost to themselves. But in a free society, solutions are eventually found. And in the long run the new developments leave us better off than if the problems had not arisen. That is, prices eventually become lower than before the increased scarcity occurred."

At 12/06/2009 2:05 AM, Anonymous CompEng said...

There are in fact a number of examples of failed societies that chewed through their resources: Easter Islanders, certain South American native civilizations, and others listed. For more, check out, "Collapse: How Societies Choose to Fail or Succeed" by Jared Diamond, author of Guns, Germs, and Steel.

At 12/06/2009 4:24 AM, Blogger OA said...

Those failed societies were a logistics issue, not a worldwide depletion of resources. There was plenty of food and other resources they needed available in the world, just not enough where they were.

There will be towns in Texas and Saudi Arabia, and other places that will disappear as their local wells run dry. Local scarcity won't mean global scarcity.

Oil isn't the sole source of energy even today. Many are just more expensive right now so aren't developed in volume. Others are waiting for a key breakthrough to be viable.

As oil prices rise, people will find ways to use it more efficiently and improve the alternatives. Like prior transitions, there's not going to be a bell rung one day signaling the end. Over time alternatives will just take over more roles.

At 12/06/2009 5:54 AM, Blogger Joel G. K. said...

Well, the vested interests in the energy paradigms of the past were not as powerful, that is for sure!

At 12/06/2009 7:17 AM, Anonymous Lyle said...

OA interestingly A lot of the county seats in West Texas are well placed to move from Oil to Wind/Solar. Sweetwater, Tx is a town that used to be an Oil town that has rebounded with all the wind built around it.
The nice thing is that ranching and wind energy go nicely together, the cows don't care about the noise of the turbines, and the turbines take up only a small percentage of the land. For the rancher wind turbines are free money. If you ever get the chance to go along I-20 from Abliene west you will see a lot of turbines on the hill tops or take Tx 73 south from Sweetwater and drive among them.

At 12/06/2009 1:41 PM, Anonymous Anonymous said...

We are transitioning away from oil already. Notice in the linked graph how, over the last several years (since around the time of the purported Peak in sweet crude) there has been a very large increase in per capita use of that "next generation"- "better alternative" known as COAL.

At 12/07/2009 2:17 AM, Anonymous Lyle said...

It is interesting that the peak oil folks can be seen as the reincarnation of the Club of Rome folks of the 1970's. And of course they think oil is so critical that the laws of economics have been repealed in that market. No one says that there will not be pain, even severe pain during the transition, but humanity will muddle thru. The law of supply and demand is an excellent method of rationing. Some suffer because their demand is not met due to being unwilling/unable to pay the price set, but thats the whole point of the law. Its even possible that there could be localized collapses of society, but then these also happen for other reasons See Somalia, or in the 1990s Bosnia.
The peak oil folks also are in the line of the Y2k as a disaster folks. If they really put there money where their mouth is they need to move back to subsistence farming, using real horsepower for the farm work, and using tallow candles at night. A windmill might also be ok, to pump water, generate some electricity.

At 12/07/2009 7:57 AM, Anonymous Anonymous said...

I dont follow this one.

Althought i dont deny that we can (and probably one day should) move away from oil and other limited resources , this post and several others similar found elsewhere just seem to say that we can sit down and burn coal and oil forever??

At 12/07/2009 10:00 AM, Anonymous Lyle said...

Actually it says if any resource gets scarce some bright person will figure out a way to work around the shortage, provide a replacement. For example oil, which could be limited to avaiation, as other uses could use oils cousin, natural gas, or other energy sources. If you can't get the rare earths from china, then reopen the deposits elsewhere, (there are a number of such deposits in the us but not currently economically viable, Mountain Pass, Ca is one such). Or you substitute materials replacing the scarce with the more available. Yes there are dislocations and pain with the process but we muddle thru somehow.


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