About Peak Oil

Snipped from a thread that I started on the Peak Oil message board. I really feel good about being lumped in with creationists.

A somewhat popular how-to and practical advice website called About.com has an entry entitled "We Will Never Run Out Of Oil".

http://economics.about.com/cs/macroeconomics/a/run_out_of_oil_2.htm

It falls under the Macroeconomics advice section of the website, written by a budding economics PhD student named Mike Moffet.

I blogged about it here in the context of skeptics and skepticism:
http://mobjectivist.blogspot.com/2004/07/about-skepticism-and-reality.html

and then sent in a comment to the About.com editors, saying that the article should be modified to reflect the current reality. I did get a comment back (in a rather roundabout way):

Quote:
I stumbled onto your website and saw that you linked me. Thanks!

I’d just like to point out that I’m a long time reader of both Skeptic magazine and Skeptical Inquirer so there are “peak oil nay-sayers” in the skeptical world as well.

As far as “free-market economists” (there’s really no such thing in academia, but I suspect you mean “neoclassical economists”), I’ll paraphrase Churchill: Neoclassical Economics is the worst possible scientific economic paradigm, except for all the other ones.

Take care,

Mike Moffatt

Economics Guide at About.com

Encyclopaedia Brittanica they ain't.

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marek
Joined: Jul 21, 2004
Posts: 31
Location: Chicago, IL
[Post] Posted: Thu Jul 29, 2004 9:04 pm Post subject: [Reply with quote]
If you are interested in a very powerful critique of neoclassical economics from an energy perspective, go to the library and borrow "Beyond Oil" by Gever et al. (1991). Also, for a very sophisticated read, I recommend "The Entropy Law and the Economic Process" by Georgescu-Roegen (1972).
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PermanentlyBaffled
Joined: Jul 26, 2004
Posts: 44
Location: England
[Post] Posted: Fri Jul 30, 2004 3:14 am Post subject: [Reply with quote]
As i understand it the reason why people say that classical economics doesn't apply in the oil market is because when prices rise supply is supposed to be stimulated as that higher price is more attractive to producers. This is said not to apply becauase there is no more production capacity in the oil sector.

Right, i agree with that, but this is covered in economics, the supply is said to be 'inelastic'. Therefore all that happens is that demand sets the price , and regardless of the price the quantity supplied is the same. So in effect on a supply and demand graph, the supply line is vertical. This in effect means that all that happens is that the amount set amount produced is open to the highest bidder and that cost is filtered directly down to the end consumer. If you are rich you get your oil , if you are not you are f*cked! [Wink]

Is this right, or am i blowing out of my ass? [Laughing]
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WebHubbleTelescope
Joined: Jul 08, 2004
Posts: 53
Location: Nosebleed Seats
[Post] Posted: Mon Aug 02, 2004 10:53 am Post subject: Mike Moffat [Reply with quote]
Another e-mail response from Mike, the economics genius at About.com.
This one is absolutely rich, because he compares peak oil theorists to young earth creationists. Or am I missing something here?

Quote:
--- "Mike Moffatt, About.com Guide to Economics" wrote:

> That's quite true.
>
> One thing you should consider is how similar the "peak-oil" arguments
> are to the "young earth" arguments that biblical creationists use.
> They're all about taking rates of change, assuming those same rates hold
> for all time, and extrapolating backwards or forwards in time. As
> skeptics we should be wary of such arguments.
>
> At the same time, I also understand why you would be skeptical of the
> arguments made by most economists.
>
> Take care,
>
> Mike
>
> > -----Original Message-----
> > From: Webster T [mailto:websterhubbletelescope@yahoo.com]
> > Sent: July 29, 2004 12:41 AM
> > To: Mike Moffatt, About.com Guide to Economics
> > Subject: Re: Skeptic and Skeptical Inquirer
> >
> > I will defer to history instead of economics on the
> > ultimate outcome. Time will tell, and apparently
> > nothing anyone can do about the situation accept to
> > pontificate. Which is the boat we're both in.

The only similarity creationism arguments have to anything is when cherry-picking of data advances the theory.