me:
>>  All else equal, it's a good thing if people believe we're
>>running out of oil -- whether it's true or not -- since it pushes
>>people to move over to energy sources that are not based on
>>petrochemicals. I wish people thought we were running out of coal,
>>too.

Bill:
> Actually, isn't this a recipe for disaster?  If people believe oil
> will run out, they'll just use more.  Same thing with tuna.  The only
> thing that will save us is putting a floor on oil prices.

If people (consumers) use a lot of oil because they think it's running
out, the increased demand drives up the price, which would in turn
encourage economizing on its use and the search for substitutes for
it. The mere expectation of "peak oil" likely has that effect too.
However, if people embrace the "heck, we're going to die anyway so
let's have fun" attitude, it could make things worse (as you say).
Then, we can film "Mad Max" as a reality show instead of as fiction.

On the supply side, tuna and oil are different. Tuna is a "common
property resource" which means that if I don't kill the tuna, you can
do so. That creates the incentive for me to do it first (if I'm a
profit-seeker), speeding up their extinction (or at least a long
shut-down of the fishery until the tuna recover). You have the same
incentive (again assuming you're profit-driven). Thus, some sort of
collective plan is needed to avoid over-fishing.

The fisherfolk often come up with some sort of plan of this sort,
usually with the help of governments, because they'd rather make
profits over the long haul rather than driving themselves out of
business. Of course, they often fail to develop such a plan,
especially when various governments don't cooperate with each other.

Oil in the ground, on the other hand, usually has well-defined
property rights attached to it, at least if we can get rid of
slant-drilling and the like. That means if I don't pump the damn stuff
out of the ground, you can't get at it and can't pump it. So there's
no special incentive for me to pump first. In fact, if I think that
oil is running out, I might sit on my stash of oil and refuse to drill
large amounts, so I can reap bigger winnings in the future. (I've been
told that Saudi Arabia does this; I don't know if it's still true.)
This behavior encourages higher prices, of course, but there's still
no _extra_ incentive to drill now to beat the competition (as seen
with tuna).

Also, low-cost producers of oil have a smaller incentive to sit on
their assets when profits can be made _now_. But then again, when
prices are low, they'll refrain from pumping.

The big problem with oil is with its use, its destruction of the
natural environment. Tuna harvesting has its major negative impact
up-front, on the other hand.
-- 
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own
way and let people talk.) -- Karl, paraphrasing Dante.
_______________________________________________
pen-l mailing list
[email protected]
https://lists.csuchico.edu/mailman/listinfo/pen-l

Reply via email to