Wednesday, June 17, 2015

There are many alternatives to oil

One of the main ideas of the peak oil doom movement is that there are no possible alternatives to oil. Oil is apparently some magical irreplaceable substance with no known alternatives, and no way to find alternatives. For example, here is a recent post from a prominent peak oiler on peakoil.com:

...It is highly unlikely we will discover a viable alternative to oil... We can't invent a new energy source to oil since that would violate the laws of thermodynamics. You can't make something out of thin air just by imagining it.

As usual, that idea is factually totally wrong.

There have always been many alternatives to oil, since the beginning of the oil age. For example, cars can use electricity from batteries (most major car companies have released, or are releasing, battery-electric cars). Trains and buses can use electricity from overhead wires; more than half of rail traffic worldwide now uses this. Ships can use steam turbines which can use anything that will burn as fuel, such as coal, peat, wood chips, oil shale, torrefied biomass, etc. Internal combustion engines can use natural gas--even gas from fracking or methane hydrates. For the few uses which really require a liquid combustible fuel, there are many synthetic liquid fuels such as anhydrous ammonia, dimethyl ether, and many others. Those synthetic liquid fuels can be manufactured using electricity from renewable sources and abundant elements. All of the aforementioned alternatives have been available for many decades, and everyone in the relevant industries knows about them.

The only reason we don't use those alternatives already is price. For example, battery-electric cars and synthetic fuels are only competitive when oil costs $120/bbl or so.

When oil production enters its gradual terminal decline, the price of oil will shoot up and stay there. The economy will then gradually transition to now-cheaper alternatives. There is vastly more time than is required for the economy to transition to those alternatives (we have at least a century), and the economy has already begun transitioning to them, far earlier than required (car companies started designing plug-in vehicles at least a decade before any declines in oil production).

This kind of transition is something the economy does all the time. Companies are always evaluating alternatives and switching between them. Take ships as an example: the shipbuilding industry started off using sail, then switched to reciprocating steam engines burning coal, then switched to steam turbines burning coal, then switch to steam turbines burning oil, then switched to diesel engines burning oil. There have already been four major transitions in ship propulsion. There are many, many alternatives for the fifth transition. As another example, electricity production switched from hydroelectric, to oil, to coal, to nuclear and back, and now is switching from coal to gas in the US, because gas is now cheaper.

This notion that "there are no alternatives to oil" is just factually totally wrong.

It is also possible to use oil far more efficiently. When oil begins its very gradual decline and prices shoot up, people can buy cars such as Priuses which get twice the mileage. Shipping companies are already ordering ships that are more than twice as fuel-efficient. Cargo traffic can be switched from truck to rail which is 4x more efficient. Those things by themselves would compensate for declines in oil production for many decades.

Don't expect anything exciting or dramatic to happen to transportation networks. Granted, the price of oil may swing around wildly (because of inelasticity of demand), and there are recessions caused by many things. However, the actual supply of oil changes gradually over decades. Oil production won't enter a sustained decline for at least another decade, and the decline will be very gradual thereafter. There is a lot of time, and there are many alternatives.