Fools are born every day

Fools are born every day. That is unfortunately a fact which cannot be denied.

—

Dominic Schmelzer writes:

Peak Oil certainly has nothing to do with Easter Island. But it also has nothing to do with whether a geologist

gets a job. Many peak oilers would argue the oil companies’ present exploration attitude like this: Finding and

extracting new oil is becoming expensive. But how expensive cannot be measured in dollars. It has to be

measured in energy. How much energy does it take to supply 1 unit of energy to the consumer? With existing

reserves, this is about 1:20. With not-yet found reserves, it could be 1:5. Tar sands are much more efficient

than that at the moment. Until the two catch up with each other, however, oil companies are not going to be

willing to spend too much money on exploration. Until then, Tom Lowe is going to be out of a job. In the end,

however, (and this might take a century) energy expense to energy gain is going to be 1:1. At this point, it

does not matter how much a barrel of oil costs. It’s simply not worth it to explore.

The cost of producing oil can be measured in dollars, since all relevant costs (including the energy costs) of

oil production are tradable, and their exchange ratios are measured in dollars. Over time, each unit of fuel is

producing more and more wealth, which would not be the case if a higher and higher percentage of the economies’

resources were required to extract the fuel. According to a pdf file provided by peak oil advocate Marty

Sereno, “Total energy per capita peaked in 1980.” Yet per capita wealth has grown over the same time period

(the very poor have done especially well. See “India and China Are Poised to Share Defining Moment“:

“According to the World Bank, their combined growth can be credited with cutting the share of the world’s

population living in extreme poverty to 20 percent in 2001 from 40 percent two decades earlier”). This means

that percentage of resources (including energy) required to produce a given unit of fuel is decreasing not

increasing.