We are not running out of resources

Introduction

Some doomer authors have claimed that we're running out of resources in general. Not just fossil fuels, but many resources necessary for civilization, like metals, fertilizer, and so on, will soon be exhausted, according to them.

A notable example of this view, is the book Limits to Growth, which is perhaps the greatest doomer classic of all time. That book contains repeated claims that we will soon exhaust "minerals", "aluminum", and various other resources in the fairly near future. It shows graphs of depleting aluminum supplies and depleting supplies of various other things as time goes on, with near-zero rates of extraction for various resources by mid-century.

In this article I will argue that we have virtually inexhaustible supplies of everything necessary for modern civilization and for a large population. I will argue that we aren't running out of any essential resources or minerals, and that we don't face peaks of anything irreplacable. In fact, I'll show that we have enough resources to provide a large population with a first-world standard of living for billions of years, until our Sun explodes.

Note that I'm not claiming we'll never run out of anything. Clearly we will eventually exhaust our supplies of fossil fuels and other things. What I am claiming, however, is that we'll never run out of anything essential. By "essential" I mean resources for which there are no obvious substitutes, and which are required for modern civilization to exist with a large population. For example, iron, aluminum, fertilizer, and adequate energy sources are essential and have no substitutes. On the other hand, fossil fuels are absolutely not essential for civilization, since they're used as a portable energy source and they have many (albeit more expensive) alternatives. Fossil fuels are a cheap convenience, that is all.

Obviously there is some question of whether civilization has enough time to transition to other sources of energy and other minerals as fossil fuels and rare earths are exhausted. I will not address that question in this article. All I am attempting to answer here is whether there are enough resources to support modern civilization for 10 billion humans, and for how long, using any substitutes possible, even if that means we must revert to electrified public transportation like trolleys, and must manufacture hydrocarbons for the niche uses (like tractors) which can't be electrified. I will address questions of how quickly we can transition (and whether it's quickly enough) in a subsequent article.

In order to estimate whether we'll run out of anything essential, we must determine three facts: 1) which elements and substances are essential for modern civilization, in other words, which elements are needed and have no substitutes; 2) how much of them exist in the Earth's crust, in a form which could be economically extracted; and 3) how much of them we're using on a yearly basis, in other words, how quickly we're depleting them. Once we have those three pieces of information, we can project how long we have until we exhaust essential resources and civilization must end.

Of course it matters a great deal what future consumption patterns will be like and how large the population will be. A larger and richer population will exhaust resources more quickly. A population which is exponentially larger could obviously deplete resources very quickly. For this article, I am assuming that the human population will eventually stabilize at a high level (10 billion) as demographers predict, and those 10 billion people will reach European standards of living. Obviously, if the population continues to grow indefinitely, then we will eventually hit some limitation which constrains the further growth of population. Note that hitting a limit of population would happen as we ran out of one resource (probably arable land) which serves as a bottleneck. It would not necessarily cause an industrial collapse or a reversion to medieval mode of life or anything similar. It would probably cause starvation in the countries which were then poorest and had the highest population growth rates.

Which substances do we need for civilization?

Obviously we need various things for modern civilization. We need objects of civilization, like buildings, bridges, trains, and so on. We also need energy in large quantities, in order to build to objects of civilization and to extract the minerals necessary for their construction. We also need food (and therefore fertilizer) sufficient for 10 billion people.

However, just saying that "we need buildings" doesn't answer any questions. What are buildings made out of? We must decompose buildings into their constituent substances, and find out how much we have. Furthermore, we must also decompose the other objects of civilization (trains, computers, etc), into their constitutent substances. We must also find out what fertilizer is made from, and so on. In other words, we must decompose civilization, and find out which minerals and substances are absolutely required to build and sustain it.

Remarkably, almost everyting in civilization is made out of a very small number of elements, which are already mined in massive quantities. For the most part, civilization is built out of: iron, aluminum, silicon, oxygen, calcium (for cement), nitrogen, hydrogen, potassium, and phosphorous. Those elements are the "macro elements" of civilization, and I'll refer to them as such from now on, because they are required in huge amounts and they have no substitutes. Those macro elements are remarkably diverse and are sufficient by themselves to manufacture almost everything we need, including: cement, buildings, bridges, skyscrapers, roads, industrial machinery, power plants, trains, transportation infrastructure, generators, power cables¹, computers, glass, steel, plasticky substances, trucks, fuels, ships, houses, and almost everyting else. Also, those macro elements include the major constituents of fertilizer (nitrogen, potassium, phosphorous). Also, those macro substances include the major constituents of reinforced concrete (silicon, oxygen, calcium, iron, and a little carbon), and concrete is the most common material in modern civilization by a very wide margin. Also note that these macro elements are already traded in large quantities and are used for precisely those purposes, so I'm not being theoretical here. Note also, that it's entirely possible to make plasticky things out of silicon and oxygen; carbon is not necessary for this purpose (although it's slightly cheaper). Remarkably, most of civilization is "built" out of large amounts of very few minerals.

In addition to those macro elements, we need a few other elements, in small amounts. I'll refer to these as the "micro elements." We need carbon in small amounts because it's needed for steel, and for drug making. We also need trace minerals, in extremely small amounts, for fertilizer (zinc, magnesium, sulphur, chlorine, sodium, and a very few others). We also need Uranium in small amounts if we choose to generate our energy using nuclear power, and we need its byproducts for nuclear medicine and smoke detectors.

Of course, at present we also use other trace minerals, like rare earths (for magnets), lithium (for batteries), nickel (batteries), platinum (catalytic converters), mercury (thermostats), copper (luxury cookware, luxury stereo cables¹), chromium (chrome-plated objects), gold (jewelry, rapper dentistry, luxury stereo connectors) and so on. All those things are either unnecessary or have obvious substitutes. We can make batteries out of zinc, magnets out of other metals, and flat computer monitors using OLEDs (chemical formula: Al(C₉H₆NO)₃. Remarkably, we can now even make flat screens out of the macro elements listed above; flat screens and batteries are the commonest uses by far of minerals other than the macro elements). We can forgo chrome-plated objects, jewelry, and luxury cookware.

Note also that we don't require fossil fuels, either for transportation or for any other essential purpose. For transportation we can easily substitute the kinds of transportation which prevailed before cars were common: trolleys, steetcars, trains, buses, and so on; and those are electric or can easily be electrified. Or we could use plug-in cars, as those become cheaper. In the few cases where there is no obvious way to electrify something (like ships) we can easily use alternative fuels like woody biomass in steam boilers (the small amount of carbon already listed in "micro elements") or anhydrous ammonia, which is a combustible fuel and which can be easily manufactured from nitrogen and hydrogen (listed among the macro elements), provided we have energy.

In addition to the elements listed above, we also need energy. In some ways, energy is the master resource, insofar as it allows us to extract the minerals and elements found above. We need energy for many essential purposes in civilization: to mine the minerals, to extract the minerals from their oxides, to transport the minerals, to build the objects of civilization, to fix nitrgoen for fertilizer manufacture, to manufacture the fuels for the few forms of transportation which cannot be electrified, and to supply the basic needs of civilization like lighting, heating, air conditioning, computing, communication, and so on.

It's difficult to determine the minimum amount of energy required for civilization, so let's make a liberal guess and say that we need 30 MwH of thermal energy per person per year, for 10 billion people. (This number is much higher than present per-capita energy expenditures worldwide). As a result, we would need about 300 petawatt-hours of thermal energy worldwide.

Finally, we also need fresh water to grow plants, and space to grow them. Presumably we would need cropland, although we could use hydroponic agriculture on a large scale if it were really necessary. Already, crops are grown in large quantities in hydropnic greenhouses in some parts of the world. Soil is not actually a requirement for agriculture if you have fertilizer. However, let's ignore this substitute and assume that we'll need cropland.

So there we have it. We've completed our catalog of what's necessary for civilization: 8 macro elements, a few micro elements, 300 petawatt hours of energy per year, fresh water, and cropland.

How much do we have?

Now that we've listed the elements and substances which are absolutely required for civilization, let's take stock of how much of them are available, and how much we need.

First let's start with the "macro elements" listed in the prior section, which we need in huge quantities. They are: iron, aluminum, silicon, oxygen, calcium, nitrogen, hydrogen, potassium, and phosphorous. Happily, five of those elements (out of nine) are super-abundant in the earth's crust. Iron, aluminum, silicon, oxygen, calcium, and potassium combined make up about 94%² of the earth's crust by volume and can be found in fairly high concentrations virtually anywhere you put your foot down. For the most part, the Earth's surface is made out of those elements. Of the remainder, hydrogen can be acquired from seawater using electrolysis, and nitrogen is the primary component of air (60%). Phosphate is the only one of the "macro elements" which is not super-abundant, in truly massive quantities, almost everywhere. Phosphate is required for fertilizer, and I'll speak more about it later.

Let me repeat this fact. All of the macro elements except phosphorous are available in essentially inexhaustible amounts, since the Earth is made almost entirely out of them. Furthermore, those macro elements are sufficient to make almost all the objects of civilization. As a result, we could cover the entire terrestrial surface of the Earth in a miles-deep layer of concrete, glass, power cables, fertilizer, industrial machinery, skyscrapers, computers, and plasticky crap³, and we still wouldn't have run out of minerals or come anywhere close to it.

What about the "micro elements" like zinc and magnesium (for fertilizer) and carbon? Those are also available in truly massive quantities relative to the amounts which we require. For example, magesium constitutes 2% of the Earth's crust, which is 2000x more abundant than oil ever was despite being needed only in milligram quantities per person.

Now let's deal with energy. Let's assume we need 30 MwH/person/year thermal for advanced civilization (as we said before). With ten billion people, we'll need 300 Petawatt-Hours per year of thermal energy. (Of course, thermal energy can be converted to electricity by solar thermal power plants). Let's calculate how many solar thermal panels we'd need to capture that amount. The surface of the earth is bombarded by 89 petawatts continuously. Of that, 25% ends up on land, of which 14% ends up on desert. So deserts worldwide are continuously bombarded with (89*.25*.14=) ~3 petawatts, which is (3*24*365) ~26,000 PwH per year. Which means we would need to cover (300/26000) 1.1% of the Earth's deserts to capture the amount of energy we need to sustain advanced civilization for 10 billion people. In other words, we could obtain almost 100x more energy than we require using only solar panels in deserts. Of course, solar thermal is not the only source of energy available to us. There are also many other sources of energy, like offshore windfarms and breeder reactors. There is also the possibility of nuclear fusion, which isn't ready yet but which conceivably could come online within the next few hundred years, and which would multiply the amount of energy available to us by a huge factor.

Of course, solar panels require mineral resources for their construction. However, we have more than enough resources to build the solar thermal panels necessary to capture that amount of energy. Solar thermal panels are made mostly out of glass, which is silicon and oxygen, which constitute over 60% of the Earth's crust and which are found in massive quantities in the sand beneath the solar panels.

All that remains are freshwater and arable land. Freshwater can easily be obtained from seawater using desalinization plants (of course desalinating would require energy, but the amounts of energy required per person for desalinization are modest, and we obviously have enough of it; see above). As far as arable land is concerned, we have enough already to feed 10 billion people if we increased agricultural productivity per hectare to first-world standards throughout Asia, by the application of fertilizer, of which we have virtually inexhaustible amounts, because it's made from the macro elements listed above. Of course, we have many other options for growing crops, like irrigating the massive unused land areas, by desalinating water and digging canals.

In short. We are not running out of anything essential, other than phosphorous, which I'll deal with later.

The next million years

From the previous section, we can see that we have vastly more resources than we require. We're not running out of anything essential in the foreseeable future. But what about the longer run? If we have millions of years' worth of minerals, won't we run out eventually, if only in the far future?

No. All of the "macro elements" needed in large quantities (aluminum, iron, silicon, oxygen, calcium, nitrogen, hydrogen, potassium) are inifinitely recyclable, and are not being used up at any rate. When we mine these minerals and then throw them away, we have not affected the amount of them available in the Earth's crust at all. They will gradually return to the oxidized state in which they were found originally. Then we can re-mine them from landfills and separate them again, provided we have energy (which we do).

Nor are the "macro elements" being "dispersed" by our mining them, as some doomer authors have claimed⁴. The macro elements are already found in high concentrations all around the globe, and so won't be dispersed in any meaningful way by our mining them. Even if we mined all of those macro elements everywhere on the Earth's surface, and then scattered them at random all around the globe, they would still constitute 91% of the Earth's crust and so would be in high enough concentration everywhere to warrant economical separation and re-mining.

Nor would we gradually exhaust our supplies of fresh water. When we desalinate ocean water and use it for crops, that water will eventually evaporate into the atmosphere, condense, and rain again into the oceans, where we can desalinate it again provided we have energy. Similarly with fixed nitrogen for fertilizer: we can separate nitrogen out of the air over and over, provided we have energy.

Of course, all of this recycling depends upon energy. Clearly, energy is the master resource, upon which everything else depends.

However we have 100x more energy than we need, just from solar alone. This flow of energy will be continuous (more or less) for billions of years. Thus, we do not face any shortage of energy, which means that we don't face any shortage of anything else essential either.

The sole exception is phosphorous. Phosphorous is needed for fertilizer and is a basic component of life, thus it has no substitutes. Phosphorous is mined from phosphate rocks which will be exhausted within 1,000 years. Phosphorous cannot be re-extracted or recycled from the environment, because it actually is being dispersed as we use it: it doesn't exist in high enough concentration everywhere for us to throw it away at random (actually to allow it to run-off into the ocean) and recover it later, since it subsequently will be much more thinly dispersed. At some point we will start to run out of phosphorous, and will have to be more careful with its use. At some point we'll need to recover phosphorous from sewage and from dead bodies, instead of throwing it away or burying it.

Other than phosphorous, we face no shortages of any essential substances or elements for the foreseeable future. There is no reason, right now, to conclude that we will "run out" of any essential elements within the next million years.

Brief diversion: an unusual resource

One element which deserves special mention is silicon. Silicon is a remarkable element, insofar as silicon atoms can be "chained together" (like carbon) to form a limitless array of complicated molecules with very diverse chemical properties. Silicon is a "master mineral" insofar as you can make almost anything out of it. Using silicon and oxygen, you can make glass, or metals, or conductive wires, or electrical insulators, or plasticky substances, or fleshy sex toys, or fiberglass, or gels, or caulks, or clothing, or building materials, or breast implants, or silly putty, or opaque substances, or transparent substances, or liquids, or combustible fuel, or turbines. Silicon can also be used to make computer chips, wires, fiber optics, and electronics. It's not the ideal material for many of these purposes, but it is a possible substitute for all of them.

Remarkably, silicon and oxygen are the most prevalent elements in the Earth's crust, by far, together constituting 60% of the Earth's crust by volume. Silicon and oxygen are the main constituents of dirt, sand, and rocks.

This fact deserves special consideration. We can re-arrange the atoms in sand and make a computer, including the case.⁵ Or, we could also make a train. Or a building, including insulation, wiring, and windows.

Silicon and oxygen therefore constitute the "ultimate backdrop" among mineral resources. They are the ultimate substitute, because they can take on so many different properties by re-arranging their molecular structure, and because they are available in such massive quantities. Silicon and oxygen are so common that they're usually the "dirt" which we throw away when we're trying to mine other things.

In fact, it would likely be possible to build all the necessary objects of civilization, except fertilizer, from silicon, oxygen, aluminum, water, and thermal energy⁶. Remarkably, even computers and high-tech equipment are made overhwlemingly from this substance.

The versatility and massive supplies of silicon should be considered every time we hear a doomer claim that "we are RUNNING OUT of x and there are no possible substitutes." Whatever "x" is, it most likely could be made from sand, which is mostly silicon. In the few cases where it cannot, we have many, many alternatives.

Conclusion

We will never just "run out" of essential resources. Instead, we'll eventually need to undergo a transition, from exhaustible resources, to inexhaustible ones. For example, we'll eventually need to move away from fossil fuels, to other sources of energy which are vastly more plentiful. We'll also need to transition from internal-combustion cars, to electrified transport. We'll also need to replace our very small usage of limited minerals (like cobalt) with obvious alternatives. After we have done so, we'll have enough resources and energy to provide 10 billion people with a 1st-world standard of living for the next few billion years.⁷

Whether we have the wisdom to make this transition before civilization collapses, is another topic which I'll address in a subsequent article. The point I'm making here is that we don't face any inevitable decline of civilization solely from exhaustion of essential resources. There is no mathematical law or curve which implies that civilization must end. There is no law of nature or ecology or thermodynamics which implies that we're about to run out of resources or energy. We face a gradual transition; that is all. Whether we have the wisdom to make that transition is another topic.

Of course, we will always require huge amounts of the "master resource"--energy. Energy is what allows us to extract and re-extract all these resources. Happily, we have vastly more energy than we require, and we will have vastly more for billions of years.

The only pressing shortage is phosphorous, for fertilizer. At some point fairly soon (within 1000 years), we'll need to stop wasting phosphorous. We'll need to start recycling sewage to recover phosphorous, rather than allowing it to dissolve or flow into oceans. Happily, we won't need to start recycling phosphorous until after everyone on this planet has already reached a 1st-world standard of living, and when the expense of recycling it will be quite tolerable.

When I started learning about these things, years ago, I was shocked to discover just how few minerals are required to make almost everything we need to sustain civilization. That's the magic of chemistry, I suppose. Already, almost everyting is made overwhelmingly out of iron, aluminum, silicon, oxygen, calcium, hydrogen, nitrogen, potassium, and phosphorous (plus carbon, but the carbon is not essential for almost anything we build). I was also quite amazed to find that precisely those minerals, which we require in large amounts, constitute 91% of the mass of the Earth's crust and are essentially what this planet is composed of. What a fortunate coincidence: we are living on a massive planet made of precisely what we need.

NOTES

[1] Copper is not required for wires or cables--not even for computer cables. Aluminum is suitable for this purpose, although slightly worse. Already, most ethernet cables are made out of aluminum, not copper.

[2] http://chemistry.about.com/od/geochemistry/a/Chemical-Composition-Of-The-Earths-Crust.htm

[3] I am not saying it's desirable or possible to cover the surface of the Earth with a miles-deep layer of plasticky crap. I'm saying we have enough mineral resources to do it.

[4] This claim of "dispersing elements" has repeatedly been made by the ecological economics school of thought, especially by Herman Daly. While this argument is true for some minerals, it does not apply to the macro elements I listed, since those macro elements are found in high concentations everywhere no matter where we scatter things, so they'll never need to be "filtered" out.

[5] Of course, it's not possible to make computer chips solely from silicon. We must also use boron to dope the silicon wafers. Boron must be added in concentrations of at least 1 part per 100 million. We have enough boron for this, since computer chips are very small and boron is not rare, and we require only 1 part per 100,000,000. Also, we would need monitors, which can be made using OLED technology. OLEDs are made from aluminum, nitrogen, hydrogen, and oxygen, which are all among the macro elements listed, plus a little carbon, which is among the micro elements listed. Remarkably, even flat screens can now be made from the macro-elements I listed. This is important because flat screens and batteries are two of the commonest uses of rare minerals.

[6] Except computers, which, as I pointed out in note #3, require trace amounts of the element boron, which we also have in massive quantities relative to our requirements.

[7] A more in-depth examination of our resource future can be found in the paper The Age of Substitutability, H. E. Goeller and Alvin M. Weinberg, Science, 191 (1976), pp 683-689. They take a different approach to explaining these issues from the approach I've taken, insofar as they're more mathematical. Also, they do not touch upon the many uses of silicon or dwell upon computers, since those were rarely used in 1976. Also, they assume far less energy is necessary for civilization than I have assumed.

We do not face rapid declines of oil

How much oil is there? 3 trillion barrels? 4 trillion? How do we know?

There is no single answer to that question, because the answer depends upon price. At $80/barrel, there is a certain amount of oil remaining. At $150/barrel, there is far more oil remaining. And so on. The reason is because we leave most oil in the ground, since it's uneconomical to extract at current prices. As prices increase, the amount of economically extractable oil increases also. So there is no single "amount" of oil remaining. The amount depends upon price.

The Supply of Oil

Most resources are distributed according to a "resource pyramid." A "resource pyramid" is divided into layers, with small amounts of easily-extracted resource at the top, and larger amounts of harder-to-extract resource in the middle, and vast amounts of difficult-to-extract resource at the bottom. At the very bottom of the pyramid is a very diffuse resource, which is availabile in massive amounts, but which costs a lot to extract because it requires so much energy and money to "filter" it out of some substrate.

Oil supplies are distributed according to a resource pyramid. At the top of the pyramid was a small amount of easily-accessible oil. When we started drilling for oil, it would sometimes "gush" out of the ground with great force after drilling only a shallow well. That oil was easily extracted and inexpensive, and it was all used up within a few years. After that, we had to move down the resource pyramid to more difficult (and far more plentiful) resources.

At the bottom of the oil pyramid are resources like shale oil and tar sands, which are very diffuse and difficult to extract. (In fact the lower strata of the resource pyramid aren't really oil at all but are hydrocarbons which are converted into oil using chemical processes, for example, coal-to-liquids). At the very bottom of the resource pyramid is manufactured hydrocarbons using (for example) nuclear power, gasification, and the fischer-tropsch chemical method to convert any carbon source into hydrocarbons. This technique could supply oil indefinitely at an EROI of about 5:1.

Implications

As oil becomes harder to extract, it also becomes more expensive, which opens up vast amounts of oil that were previously uneconomic. When we start to run out of oil, we take a step down the "resource pyramid" and start using the far larger (and more expensive) oil at the lower stratum. The result is that supply of oil increases, as price increases.

For this reason, oil production worldwide will not follow a bell curve or anything similar. Instead, oil will peak and then prices will gradually increase, thereby allowing us to extract previously uneconomic resources, and thereby preventing any decline. We'll know when we're transitioning to a lower stratum on the pyramid because prices will increase permanently by some amount. However this doesn't imply any kind of decline, because more oil may be available at that price.

Take the USA as an example. Oil production peaked in 1970 in the USA, as per Hubbert's prediction, and then declined for several years thereafter. Then something funny happened. In 1976, prices increased because of a cartel, and production started increasing again in the USA, years after it had peaked. When the cartel failed, and prices for oil started delining, production in the USA started declining again. Now, decades later, prices for oil are high again, and production in the USA is increasing again, decades after the peak! Clearly, production depends upon price and does not necessarily follow a bell-shaped curve.¹

Of course, as oil prices increase, alternatives become relatively cheaper. Trains become cheaper than trucks, since trains use about 1/8th the energy per pound-mile. Hybrids become cheaper than convetional cars, since they cost only slightly more and use far less fuel. This trend will reduce demand, and further attenuate the decline.

Conclusion

Because of these facts, the very idea of "peak oil" as it's commonly understood (where we have a fixed amount of oil and it will follow a bell-shaped curve) is mistaken. Instead, we face a plateau or oil, or perhaps very gradual declines, for many years after the peak. Oil will not follow a bell curve or anything similar.

The doomer idea of applying a "bell curve" to worldwide production probably stems from their graphs of individual oil wells, which do in fact follow such a curve, roughly. But that doesn't mean that all oil wells in aggregate will follow a similar curve. It would be a tremendous mistake to assume that all oil wells will follow a bell-shaped curve because any one oil well has historically done so. Whereas an individual oil well doesn't increase prices as it depletes, the sum of all wells depleting will increase prices, and thereby increase supply and prevent subsequent decline.

As we deplete the cheaper oil, we will move down the resource pyramid, thereby increasing the price and the supply, and thereby attenuating any decline. We will never face an abrupt drop-off in supplies as a result of depleted resources, nor will we face anything like the 3% annual declines which doomers assume.²

If anything, we face a greater threat from China out-bidding us for oil than from declining production.

None of this implies a perfect future. We will face higher prices for oil in the future, particularly because of competition from developing nations, and this may force unwelcome changes to the American lifestyle, like driving hybrids instead of SUVs. However, we do not face rapid declines of oil, nor do we face any kind of interruption of industrial civilization.

NOTES

¹ http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS1&f=A

² I'm referring to abrupt declines caused by depletion of resources. Of course, it's possible there will be abrupt declines caused by war, disruption, severe economic downturn, etc. It's also possible there will be brief abrupt declines of a few percent based upon miscalculations because oil production does not follow a smooth curve. It's also possible there will be fairly rapid declines caused by peak demand. For example, it's possible that prices for oil would increase greatly, and the prices of batteries would decrease, to the point that plug-in hybrids became cheaper to operate than conventional cars. In that case there could be a rapid transition over the course of 15 years or so to alternative propulsion for cars, leading to a 5% annual decline or greater. That would mean that oil wasn't crucial anymore.

Exponential growth

Doomer literature is replete with stories of exponential growth and then collapse. It's one of their favorite themes. Some doomer sources (like Albert Bartlett, or the 7th fold) focus on exponential growth as their primary topic. In fact Albert Bartlett has famously claimed (famously in doomer circles anyway) that the inability of most people to understand exponential growth is one of the great problems facing the world today.

The reason exponential growth is a topic in doomer circles, is because exponential growth of almost any important quantity will lead to disaster before very long. For example, exponential growth of population, by 4% per year, would lead to 6.5 million times as many people in the world in 400 years, necessitating a massive die-off. And exponential growth of energy usage, by a few percent per year, would lead to the oceans boiling in only a few centuries. In most cases, sustained exponential growth leads to die-off or collapse before very long. Just look at colonies of bacteria or yeast, which (as doomers frequently point out) grow exponentially until they suffocate in their own waste or exhaust their food supply.

There is only one big problem, with all this talk of exponential growth and then collapse. The problem is: no important quantities are growing exponentially.

Take energy consumption as an example. Energy consumption is not growing exponentially. In fact, energy consumption per capita isn't growing at all, not even linearly, and hasn't grown much for decades. This point should be obvious to anyone over age 40, by just looking around and then remembering how things used to be. Do you use exponentially more electricity than in 1970? Do you set your thermostat 3% higher every year? Do you use exponentially more gasoline than in 1970? In fact, you probably use less gasoline, if your car in 1970 was anything like my parents' cars, which got about 10 mpg.

In fact, energy usage per capita has been essentially flat for the last 5 years or so, and was growing only very slowly in the 2 decades before that, and not at an exponential rate.

Well, even if energy usage per capita isn't growing exponentially, isn't the world population growing exponentially? Don't we face exponentially more people, and so exponentially more resource usage even if resource usage per capita remains the same?

No, the population of the world is not growing exponentially. In fact, the population is growing, but at a declining rate. Already, the rate of population growth has reached 0% in many industrialized countries, and is declining rapidly in developing countries. Furthermore, there is every reason to believe that the rate of population growth in developing countries will also reach 0%, since they're basically following the same pattern which industrialized countries have laid down. As a result, most professional demographers believe that world population will level off at between 10 and 12 billion people.

Well, isn't the economy growing exponentially? We see figures like "3% growth this year" which seems to imply it's growing exponentially, right? And, since we need energy for economic growth, doesn't that mean that the rate of energy usage is also growing at 3%?

First, economic growth isn't the same thing as growth in energy consumption. (This mistake is very common). The term "economic growth" refers to growth in production of things you can buy. If someone invents a new drug, he has caused the economy to grow, even if manufacturing that drug takes less energy than manufacturing the older equivalent.

Second, the economy is not growing exponentially. The rate of economic growth is delining everywhere. As economies mature, their rates of growth decline. This has already happened in all first-world countries, which do not enjoy anyhwere near the rates of growth of (say) China or India.

Thus, essentially no important physical quantity is growing exponentially¹. Population is not growing exponentially. Energy usage is not growing exponentially. Industrial output is not growing exponentially. The economy is not growing exponentially. Food production is not growing exponentially.

Since these quantities are not growing exponentially, it would be a basic mathematical error to use exponential functions to model them.

Both population and energy usage will grow and then level off before very long. There is ample historical precedent for this.

NOTES

¹ The term "exponential growth" refers to a mathematical function like this: f(t)=b^t where b is constant. If b is not constant, then it's not an exponential function. None of the quantities listed in this article are growing according to an exponential function.

Thermodynamics does not imply near-term energy descent

Thermodynamics is a recurring theme in doomer literature. Doomer sites are filled with talk of thermodynamics, especially the second law of thermodynamics. This is not surprising, since borrowing terms from rigorous disciplines like physics could lend credibility to the doomer thesis. Also, the second law of thermodynamics does have a superficial rhetorical similarity to the doomer thesis insofar as it implies "decline" of some kind.

Quite frequently, doomers will claim that the laws of thermodynamics imply a near-term energy descent scenario ending in the collapse of civilization. After all, the second law of thermodynamics states that entropy is always increasing, and that energy gradients available to do work are always decreasing. Doesn't this imply that the net energy available to us to do work must always decrease, as a matter of inevitable physical laws? As usable energy decreases, mustn't civilization collapse?

For example, here is a quotation from the first few sentences of dieoff.org:

"Calculations show that conventional oil production 'peaked' in 2005, so it is now physically impossible (thermodynamics) to increase 'net energy' as we have in the past."

...and this kind of talk is extremely common in the doomer literature.

However, the doomer literature contains extremely grave misconceptions about what the laws of thermodynamics really claim. For example, the second law of thermodynamics states that energy of all kinds, including matter (which is convertible into energy), will tend to equilibriate, in an isolated system. Please note the bold portions of the prior sentence, since those parts are often forgotten or omitted in doomer accounts of the second law of thermodynamics. Thus, the second law of thermodynamics would imply doomer energy descent only if all three of the following conditions were met: 1) we lacked the technology to convert matter into energy; 2) the Earth were an isolated system; 3) fossil fuels were the only form of energy available to us. If all three of these conditions were true, then and only then would the laws of thermodynamics imply a doomer energy descent scenario, because then we would have no other possible sources of energy when fossil fuels are depleted. However, none of those three conditions is true. Specifically, matter can be converted into energy, so we can switch to nuclear power and more than offset a decline in fossil fuels¹. And, the Earth is not an isolated system, but is continually bombarded by energy from the Sun, so we could harness this energy and more than offset a decline in fossil fuels. Note that these alternatives are compatible with the laws of thermodynamics.

Of course, we'll still gradually "run out of energy", since the other sources of energy aren't infinite either. The second law of thermodynamics really does imply a long-term energy descent over many billions of years. The Sun will gradually dim over billions of years. Nuclear fuel will gradually be exhausted over millions of years (or billions of years, for fusion).

However, we don't face any kind of inevitable energy collapse over the next few centuries since fossil fuels are not the only kind of energy to which the laws of thermodynamics refer.

...

As our supplies of fossil fuels gradually diminish over the next 150 years, we will face several different options, as follows:

1. We could gradually transition to renewable sources of energy like wind power, solar thermal, and so on.
2. We could gradually transition to nuclear reactors, and then breeder reactors.
3. We could develop hot fusion as an energy source.
4. We could do nothing whatsoever about the situation, as the energy available to us declines gradually over decades or centuries, until civilization collapses and we revert to a tribal state.

The laws of thermodynamics are compatible with all these scenarios. Furthermore, the laws of thermodynamics provide no guidance whatsoever as to which of these scenarios will occur. This is an economic calculation problem, the answer to which cannot be derived from the laws of thermodynamics.

Also, please note that all of the above scenarios are sustainable in the long run. Whether we transitioned to renewable energy, or breeder reactors, or hot fusion, or neo-tribalism, we could continue along with our chosen strategy for hundreds of millions of years. Note that I'm not claiming we could increase our rate of energy consumption exponentially for hundreds of millions of years. I am claiming, however, that we could provide power to 10 billion people at a first-world standard of living for hundreds of millions of years.

In conclusion. The laws of thermodynamics provide no support whatsoever to the doomer thesis of imminent energy descent². Although doomers frequently invoke the laws of thermodynamics, those laws provide no support for their conclusions, unless we wrongly assumed that the Earth were an isolated system, that matter is not convertible into energy, and that fossil fuels were the only source of energy.

In fact, the laws of thermodynamics are compatible with a wide range of outcomes for civilization, including the outcome of sustained first-world living standards for a large, stable population for a very long time.

NOTES:
¹ Of course, this would require energy storage (like batteries) if we are to use nuclear power for cars. However batteries are compatible with the laws of thermodynamics and this point isn't really relevant here.
² Of course, the laws of thermodynamics do imply a long-term energy descent. Eventually, our Universe would face a "heat death" where entropy had reached its maximum. Before the heat death occurs, our Universe would face a situation where almost all usable energy had been exhausted and very little was happening. This would happen in about one quadrillion years. This kind of "energy descent" really is implied by the laws of thermodynamics. However the near-term energy descent featured in doomer literature is not at all implied by the laws of thermodynamics.

Peak coal is not imminent

Some PO writers have recently claimed that peak coal is very imminent. One article on TheOilDrum claimed that peak coal will hit sometime this year (2011), while another paper claimed that peak coal will occur sometime in the next 15 years.

Here's a quote from the article on TheOilDrum:
"Dave Rutledge might have been the first to produce such a forecast, with the conclusion that coal extraction will come to a peak in 15 years. Kjell Aleklett's research group reached the conclusion that an all-time maximum would occur in about 10 years. But by bringing the peak forward to 2011, Tad Patzek drew the attention of, and gained the honour of coverage by a magazine the caliber of National Geographic."

These estimates of imminent peak coal are drastically at odds with the convetional view of coal availablility. For example, the USGS claims that we have enough coal for centuries. And some other sources have gone so far as to claim that coal is not only abundant, but "super-abundant" and could fulfill all our energy needs (including transportation needs through coal liquefaction) for centuries.

Which of these two views is correct? Do we face an imminent shortage of coal, or do we have vast amounts of the stuff?

I don't know when coal will peak, but I'm certain it won't peak soon. My reason is economic. At present, there is very little worldwide trade in coal. Each country meets its demand for coal from its own domestic mining and supply, with only a few exceptions. This fact implies that we are not approaching peak coal. It means that even the countries which have very small coal reserves and high consumption still haven't hit their own local peaks of coal yet, and therefore have no need to import it. For example, China mines coal at 3x the rate of the United States, yet has half the reserves or less, but China hasn't reached its own peak of coal yet. In fact, China tripled its rate of domestic coal production over the last 15 years which suggests that it's not even approaching peak coal within its own territory. If China isn't facing a local peak of coal, then the United States certainly isn't, since the U.S. has twice the reserves as China and a far lower rate of extraction.

Peak coal won't happen until after the major consumers of coal (like China) have hit their own peaks and begin importing huge amounts of the stuff from the USA and elsewhere. Only then will there even be a world market for coal in which a worldwide Hubbert-type peak would even be meaningful. The worldwide peak of coal will happen decades after the worldwide market for coal has been established. Peak coal will happen when China has been importing huge amounts of coal from the U.S. for decades, and when the U.S. starts to run out.

There are also other reasons to believe that peak coal is not imminent. The USGS and others have documented massive coal resources in the North Slope of Alaska that are totally undeveloped at present, and that contain more coal than the rest of the world combined. These estimates of massive reserves are disbelieved by peak coalists, because the estimates are uncertain, and because the data are of low quality. However, the absence of high-quality data suggests that peak coal is not imminent, because we're not even bothering to search for coal yet in far-flung places. We haven't even bothered to start digging in Alaska to find out how much is there. We won't reach peak coal until we've searched everywhere in the world for it and can't find any new large mines, despite a gradual depletion of the old ones.

In some ways, the coal market today is analogous to the oil market in the 1950s. In the 1950s, most countries met their demand for oil through local production. For example, the US was the largest consumer of oil (by far) but had little need to import any, since it could satisfy its oil demand using its own fairly modest reserves. Furthermore, nobody had bothered to search far-flung places for oil yet, because doing so wasn't necessary. There were rumors of vast resources in the middle east and elsewhere, which lay totally unexploited and mostly unsurveyed.

That situation is what we face today with coal. China hasn't begun importing very much, and the United States, which is like the Middle East of coal, hasn't even begun exporting very much. Furthermore, we haven't even explored for coal worldwide, because we haven't started to run out of our local supplies. In these regards, the market for coal is exactly analogous to the market for oil in the 1950s, six decades before the worldwide peak.

In short. The worldwide coal peak appears not to be imminent. Peak coal is at least several decades away. We'll know that peak coal is approaching when the following conditions are met: 1) the major coal consumers, like China, have hit their own local peaks of coal and are importing huge amounts of the stuff from the USA; and 2) coal companies have charted everywhere in the world and have exhausted new places to look for coal. When those two conditions have been met, we'll know that the peak of coal is only a few decades away. With oil, both of those conditions were met at least 50 years before we reached peak oil worldwide.

I don't think there's any way to know right now when peak coal will occur. We haven't even bothered to search for coal worldwide, so we don't know how much is available in Alaska or elsewhere. At this early stage, we don't even have a good worldwide picutre. All we can know is that peak coal is not imminent.

The economy doesn't require any growth

A recurring claim in doomer literature is that our economy must either grow or collapse. This claim is frequently made on peak oil and doomer websites, like theoildrum.com, energyresources.net, and elsewhere. It's also frequently re-iterated by adherents of the "ecological economics" school of thought such as George Mobus.

The growth-or-collapse claim has an argument which runs like this. In our economy, debt is extremely widespread. The government has debt, corporations have debt, and individuals have debt. But debt is nothing more than a requirement to pay more money in the future. The only way we'll be able to pay more money in the future, is if we have more money in the future, through economic growth. Without growth, we cannot possibly pay additional money in the future, because there will be no additional money in the future with which to pay. Therefore, an economy with widespread debt must either grow or collapse.

Or so goes the argument. This argument (which I've called the "growth-or-collapse" argument) is extremely widespread in doomer circles. It's rarely spelled out in any great detail. Usually, it's presented very briefly or just assumed. Nevertheless, it comes up very frequently in doomer literature.

Unfortunately, the growth-or-collapse argument is false. It relies upon two mistaken assumptions, outlined below.

First, the growth-or-collapse argument relies upon the implicit assumption that all our income is devoted to debt servicing. Only then would we require more money in the future to avert collapse. At present, however, we (including our government) devote only a small fraction of our income to debt servicing. As a result, we could continue to make debt payments despite no growth in income by sacrificing consumption spending. Let me give an example. Suppose someone (we'll call her Alice) makes $50,000 per year and takes out a loan of $5,000, payable in one year with 10% interest. In other words, she owes $500 more at the end of the year than the value of the loan she took out. As it turns out, Alice doesn't receive an expected pay raise. Nevetheless, she must pay back $500 more at the end of the year. Is she bankrupt? No, because she can pay her debt by sacrificing a small fraction of her consumption. Only about 1% of her income is devoted to paying interest, which is less than her discretionary spending, so she would not face bankruptcy even if she underwent a relatively severe contraction of her income.

What about people who are so heavily indebted that they cannot possibly pay their debts using their current income? What about people who bought million-dollar homes and could not afford any of the payments without an increase in their salaries? Only those people require income growth to avert bankruptcy. By the way, that situtation is not faced by our government or most of our corporations. At present, our government pays only a relatively small fraction of its income for debt servicing and therefore does not require any growth in revenues to avoid default; and the same goes for the vast majority of corporations and people.

But there are some people and corporations who require growth in their incomes to avert bankruptcy. Do they face collapse? Will they cause the collapse of the whole economy?

No. That's the second mistaken assumption of the growth-or-collapse argument: it conflates bankruptcy with collapse. Bankruptcy is nothing more than a transfer of ownership of assets from one entity to another, along with a legal debt cancellation. Nothing more. It does not imply collapse, not even for the entity declaring bankruptcy, much less for society more generally. For example, assume a manufacturing corporation which cannot pay its debts and which declares bankruptcy. It's assets are transferred from stockholders to banks and bondholders who now own the company, and its debts are cancelled. The bondholders will continue to run the company if it's profitable without the prior debts. The new owners have no more incentive to destroy its assets than the previous owners did. In other words, bankruptcy and debt have no effect whatsoever on whether factories will continue to run. Bankruptcy changes ownership, that's all. The only time a company is dissolved, and its factories closed, is when it's not needed anymore, because its products or factories are obsolete or there's a surplus of the products it supplies. For example, GM almost dissolved because of competition from many other automakers who provide the same kind of products, so GM is not necessary in the world at all, any more than AMC was in the 1980s. (Even if GM had been allowed to fail by the US government, it still wouldn't mean collapse in the doomer sense of that word, because its capital equipment (like factories and machine tools) would be sold to competitors who would increase their production. Again: bankruptcy is a transfer of ownership, even in the case of legal dissolution, which is rare. Bankruptcy is a paper procedure which has nothing to do with physical destruction or collapse).

In short. The growth-or-collapse argument is false. It relies upon two implicit assumptions, both of which are false. It would be refuted if either of its assumptions were false, but both of them are false.

The economy requires no growth to survive. It could continue along with 0% growth for decades or longer, despite loans at interest, without any risk of collapse. (In fact, that very situation is what happened almost everywhere for the vast majority of human history, without any society collapsing from debts). In fact, the economy could withstand declining income because debtors could continue to pay their debt by sacrificing other expenditures. Furthermore, those who are forced into bankruptcy cause nothing more than a paper transfer of ownership and legal procedures of debt cancellation. As a result, debt poses no risk of economic collapse and does not create a requirement for growth.

None of this concedes that economic growth is at an end. Economic growth has not ended, and is not ending anytime soon. But that's a topic for another article.

Peak Oil Won't Cause Collapse

Oil production in any region follows a bell-shaped curve. In any region, the rate of oil extraction increases, after the initial drilling, until it hits a peak, and then inevitably declines thereafter. This is true for any given oil well, and may be roughly true for all oil in the world as well.

Peak oil refers to the point at which half the oil in the world has been used up.¹ At that point, we've extracted half the oil which which will ever be extracted, or which can be profitably reached. Thereafter, we will face inevitable declines in oil production as time goes on. Once oil has started to decline, little can be done to reverse the trend in the long run. We cannot increase the rate of extraction, because it costs more and more money just to extract the same amount of oil. Even if we furiously increase the rate of oil extraction, using any means necessary, all we accomplish is to make extraction faster now but even more difficult in the future, because we drained even more oil out of the ground. Once oil starts to decline, we are on a downhill path, basically without exception or reprieve. We will run out of oil, albeit gradually, and nothing can be done about it.

We may be nearing the peak of oil production for the world. After that, oil production worldwide will start its slow, inevitable decline. Some experts claim that oil has already peaked, in 2005, while others claim that oil will peak more than a decade in the future. Either way, peak oil is relatively imminent.

Some commentators think that peak oil spells doom for our civilization. They have an argument, which runs as follows. Our entire industrial civilization relies upon oil: our cars run on oil, our trucks run on oil, our tractors run on oil, and so on. As oil becomes scarcer, which it will after the peak, we will become increasingly unable to provide fuel for essential machinery like tractors. We will find it more and more difficult to sustain long-distance transportation networks for goods, or provide fuel for our supply chains. Our industrial civilization will start to falter. Goods will become scarcer, and the essentials of life will become harder to come by. This could lead to "feedback loops" in which people could rebel, wars could break out, and so on, which could damage our oil infrastructure still further. Even if peace is maintained, reduced oil supplies mean that we'll have less oil to spend on transporting oil from the middle east to us. Yes, even oil extraction and transportation depends on oil, which means that a decline in oil supplies will make us less able to extract more oil in the future, further accelerating its decline.

Our civilization must collapse, doomers say, as oil supplies dwindle. It's a fact, implied by laws of physics and mathematics. As oil supplies decline, food supplies will also decline, since industrial agriculture is dependent upon oil.

We cannot transition to alternatives, because those alternatives require oil to build them and supply them, when oil is already running out. Not to mention, it would take decades to transition our infrastructure to alternatives, when peak oil is already upon us. It's already too late to transition to alternatives, because we needed to start decades ago. Now that peak oil is upon us, we face only one prospect: collapse.

Or so goes the argument. This argument (which I'll call the "oil doom argument") has gained tremendous influence. While still a fringe argument, it has convinced thousands of people. It has inspired many people to prepare for doomsday, to hoard food, to practice survival skills, to relocate to rural areas and live off the land, and so on, all in preparation for the coming collapse. The oil doomer argument has also inspired hundreds of books, websites, lectures, documentary movies, blogs, and so on, with ominous-sounding names such as "die-off", "twilight in the desert", "life after the oil crash", "a world made by hand", and so on. The oil doom argument has even gained the attention of the NY Times, which published a long article about it. The argument has even convinced a few scientists, and at least one Congressman.

Oil doomers generally believe their argument is unquestionably correct. They believe that the decline and collapse of our civlization is absolutely inevitable, implied by physical and mathematical laws. They generally think that anyone who denies it, is "in denial", using the perjorative psychological sense of that term.

There's one problem, however. The oil doom argument is wrong. It's totally wrong, from beginning to end. It relies entirely on incorrect assumptions, as I'll point out. Without those assumptions, its conclusions no longer follow.

Below I'll present an analysis of the oil doom argument. I'll show that it's mistaken, and I'll present a more realistic picture of our probable immediate future.

Analysis of the oil doom argument

The oil doom argument relies upon an incorrect assumption. It relies upon the assumption that our economy will sacrifice the most important uses of oil first as the supply of oil declines. In fact, our economy will sacrifice the least important uses of oil, at every stage of the oil decline. As a result, we won't begin to sacrifice things like tractors or oil transportation infrastructure until our oil supply has already declined by 80% or more, which won't happen for six decades at least, according to the most pessimistic projections. In other words, we can withstand declining oil supplies for decades with no collapse, and with no major interruptions in basic industry, even if we make no preparations, and even if we do not make any transitions to any alternatives. Oil declines would cause alterations in our standard of living, but they would not cause industrial or agricultural collapse.

The reason our economy will sacrifice the least important usages of oil first, is because consumers demand what is most important to them, which causes producers to sacrifice production of what's least important when they must choose between several options. That in turn causes suppliers to shift production, and so on, through a widening network until it reaches the whole economy. Agents in the economy communicate via prices, and everyone sacrifices what's least important. Consumers have some choice about this, but producers do not: any producers which sacrifice essential things, or which manufacture things deemed unnecessary in a new economy, will go out of business. You can see this easily during a recession. When the economy contracts by 10%, does our supply of food decline 10%? No. The first things that go away are jewelry stores at malls, which die off right away in every recession then come back. As another example, look at what happened during the late 1970s. When our supply of oil declined by 15%, quite suddenly, did it cause 15% of the tractors to stop running? No, it caused a recession and some annoyance, but no collapse of our transportation infrastructure, and no starvation.

Again and again, doomers wrongly assume that we'll sacrifice the most important uses of oil first. Let me provide an example. The following quotation is taken from the website LifeAfterTheOilCrash.net, which is one of the premiere doomer advocacy websites:

"Within a short time of global oil production hitting its peak, [the prices of oil will reach] up to, and possibly over, the $200 per barrel range... With oil at or above $200 per barrel, gasoline will reach $10 per gallon... This will cause a rapid breakdown of trucking industries and transportation networks which have all been built and financed under the assumption fuel prices would remain low. Importation and distribution of food, medicine, and consumer goods will grind to a halt as trucking and shipping companies go bankrupt en masse."

Again, this wrongly assumes that we'll sacrifice the most important usages of oil (like food, medicine, and shipping) first. Of course, we won't begin to sacrifice food, or its production or distribution, until oil supplies had declined by more than 90%, because food is the most essential thing to us, and we spend less than 10% of our oil on food and its distribution.

As a result, declining oil supplies won't cause the imminent collapse of our civilization. But that's hardly reassuring. Perhaps peak oil will cause a gradual decline and collapse, if not an immediate one. Maybe we'll shut off the tractors in 80 years, when oil is almost out. Maybe we're doomed to protracted collapse, with gradually declining living standards until we starve, decades in the future.

No. As oil becomes scarcer, we'll gradually replace it with alternatives which have become relatively cheaper. We'll replace SUVs with hybrids, and eventually, we'll replace hybrids with battery-electric cars. The transition away from oil will be entirely automatic, the result of basic market mechanisms. It will not require any preparation or forethought on the part of everyday consumers. All that will be required, is for consumers to respond to higher oil prices. As oil becomes more expensive, alternatives will become relatively cheaper, and consumers and firms will transition to alternatives at that time, merely by following economic incentives.

Some commentators claim that it's already too late for us to transition to alternatives, because peak oil is already upon us, and it takes decades to transition away from oil. However, they've wrongly assumed that we must complete the transition away from oil before declines begin. That's their second mistaken assumption. In fact, we only need to transition away from oil quickly enough to offset declines as they occur. In other words, if we want to offset a 2% yearly decline in oil supplies, we only need to reduce our oil consumption by 2% per year after the peak has occurred. We could accomplish that easily. For example, we could switch 4% of our car fleet to hybrids the first year, then switch 4% of the remaining non-hybrid fleet every year thereafter. (Hybrids get twice the mileage, so switching 4% of them per year will result in a 2% decline in oil consumption, which is the same rate as the oil decline). In other words, switching 4% of our car fleet to hybrids is sufficient by itself to offset declining oil supplies of 2% yearly, for 25 years, without any reduction in personal travel and without any preparation beforehand by consumers. Switching 4% of our car fleet to hybrids is hardly a daunting task, since we already turn over our car fleet much faster than that, without any special inducement. Of course, this strategy requires automakers to design hybrids beforehand and to start mass manufacture of hybrids before the peak occurs. But they've already made that preparation.

Of course, other consumers of oil (like shipping companies) would also have to reduce their oil usage by 2% per year, starting after the peak has occurred. But they also could accomplish it by transitioning only a small fraction of their fleet per year to more-efficient technologies. Shipping companies also have obvious alternatives to their conventional propulsion, which they will start using when it becomes economically sensible to do so. The only usage of oil which has no obvious alternative is aviation, but that is not required to prevent industrial collapse.

If anything, automakers and others have responded too aggressively to the prospect of oil declines. Chevrolet and Nissan started working on plug-in cars years ago, in anticipation of more expensive fuel, and it looks like they prepared too soon. Plug-in cars won't be strictly necessary for decades, since regular hybrids would suffice for a long time after the peak. Furthermore, plug-in cars won't become cheaper than hybrids like the Prius (on a TCO basis) until gasoline costs more than $8/gallon, which doesn't appear imminent. Bear in mind that we shouldn't start switching from hybrids to plug-in cars until gasoline costs $8/gallon (in 2010 dollars), making the arrival of plug-in cars extremely premature.

One objection to all this, is that alternatives (like hybrids) require an "investment" of oil, since we must use oil to power the machinery which mines the lithium for use in batteries. Since we're running out of oil, doomers say, we won't have enough oil to mine lithium for hybrid cars. Once again, this assumes that we'll sacrifice the most important uses of oil first. But the foundation for the next generation of our transportation infrastructure is more important than discretionary travel now, so we'll sacrifice discretionary travel. The reason is easy to see: when we pass peak oil, investment in alternatives will promise fantastic returns, even though manufacturing those alternatives requires relatively little oil. As a result, those alternatives will have enough money to buy the small fraction of oil they need despite declining supplies. As a result, we will respond to declining oil supplies by sacrificing a few SUVs, not lithium mining.

Conclusion

The oil doom arugment relies on two implicit assumptions, as follows. First, it assumes that the economy sacrifices the most important uses of oil first as supplies of oil decline. Second, it assumes that we must transition the entire transportation fleet to alternatives before the peak occurs. Both of those assumptions are false.

Doomers make those assumptions, over and over again, throughout the doomer literature. Watch out for it. Once those assumptions are dropped, because they're wrong, the doom-and-gloom conclusions found throughout the doomer literature no longer follow. Bear in mind that imminent collapse arguments require both of the aforementioned assumptions to be true, but neither of them are true.

In summary. Our civilization does not face collapse because of peak oil. Our civilization faces gradual transition to other forms of energy for transportation, that is all. The gradual transition will happen automatically, as a result of basic market mechanisms, without any preparation on the part of consumers.

This is not to say that peak oil will have no consequences. I expect that peak oil will cause a recession and modestly higher transportation costs. It will not, however, cause industrial collapse, nor will it cause starvation within the industrialized world.

NOTES:

¹This assumes that the curve of worldwide oil extraction will be symmetrical, as the Hubbert curve clearly indicates, and as doomers assume. Whether this is true or not has no serious implications for the argument I'm making here.