In which the Oil Drum eviscerates the Economist
One of the bloggers at The Oil Drum takes out his trusty napkin and does a number on the latest sanguine article in The Economist about oil supply. It’s true that new technologies help wring more oil from a reserve. But the more efficient technologies also result in faster depletion rates once a reserve starts declining.
It is also true that as oil gets more expensive, then lower quality and harder-to-reach reserves become economical to produce. But it takes more time to set up that production, making it hard for supply to keep up with demand.
Meanwhile, the LA Times has a column praising the California energy strategy, including:
* a mandate to generate 20% of electricity from renewable sources by 2020
* legislation to reduce auto emissions
* a “cap and trade” policy for greenhouse gas emissions (Schwartzenagger just backed off from the “cap” side.
Perhaps California can take the lead. I’d love to find out what citizens’ groups cover the legislation and promote good green policy. A search on AB32 — Assembleywoman Fran Pavley’s cap and trade bill — yields few results.
Meanwhile, the Environmental Economics explains that the current spike in oil prices might be due to the financial market, not oil supply. Futures are bid up, so oil suppliers are hoarding oil for more expensive future delivery.