What WILL We Do?

There's a bit of a discussion over at the Oil Drum about what will happen when "peak oil" begins to sink into the public's consciousness.

Environmentalists seem to have a somewhat naive faith that once the concept of peak oil sinks in, people will move -- as though by the force of tides -- to support renewable, decentralized energy.

But why should that be true? A much more natural, predictable reaction would be to push like mad for more drilling and for more coal gasification. Both more drilling and more coal-to-liquid-fuel production would fit better with our existing infrastructure and practices, however environmentally malign they may be.

Other's argue that society will be faced with environmental opportunities and risks as peak oil sinks in, with a balancing of both. I think the positions proposed at The Oil Drum miss the point.

I see peak oil as occurring in two general scenarios, both economics driven:

1) In a typical market up-and-down fashion, prices for oil products will be (are) on a permanent upward incline. As these products become more expensive, the economic viability of alternative energy sources will gain a foothold, and innovation will become cost-effective. For example, when gasoline reaches $10 per gallon, folks will be anxious for cheaper transportation options that are currently "too expensive" or that are yet to be developed. Gradually the alternatives will fill the gap between decreasing oil availability and the nations energy needs. In this scenario, change would be more gradual and adaptive, with distinct brief periods of pain.

2) Saudia Arabia undergoes a revolution (or some similar disruptive event of scale making Katrina look like a blip on the screen) and oil supplies are suddenly disrupted for the long term. Long term economic crisis follows with much pain in the West. Slowly, over a period of years-decades (at the speed of innovation) there is recovery with alternative energy sources developed and filling the gap of oil...along the lines of scenario number 1.

There is a third possible scenario of which I hold out little hope. In that scenario, government artificially creates the incentive for alternatives via investment in newer technologies or via taxes on fossil fuel products. The pain of dealing with peak oil is spread out over a very long time, the adaptation longer, and we control our own destiny rather than have it be driven by outside circumstances. Just think. If we had taken this approach in 1970......

Fat chance.

In either case, the driving force won't be environmental or simple greed to keep driving S.U.V.'s. It will be economics. If coal gasification is cheapest, it will be the way we go. Few are really worried about the environmental impact of fossil fuels or we would have already seen a public demanding change. Sure, there's lots of information confirming that we are choking in co2, particulates, mercury and any number of contaminents. But people seem to only respond to changes that are more immediate. Global warming is a slow phenomena and will carry much less weight than the cost at the pump.

American's are incredibly innovative. But we are also lazy and greedy. Innovation has always followed the all-mighty buck. Don't see any reason to think it won't as we deal with peak oil. If the scarier second scenario occurs, I can only hope that our democracy survives it.