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UNC professor makes progress on new peak oil class

I checked in today with UNC physics professor Gerald Cecil, who I interviewed last year for a series of stories I wrote on the peak oil concept. Cecil and professors from four other departments are moving forward with the scheduling of a Spring 2010 ~~freshman seminar~~ undergraduate course called "Energy and Environmental Crises."

Up to 125 students can enroll in the 100-level course (geared toward freshmen and sophomores), which will explain to students the background, causes and possible implications of peak oil and climate change. The last portion of the class will focus on what students can do through future careers and lifestyles to address these issues, Cecil said.

"The idea is to hook them and direct them to other courses where they can take up these subjects," he said.

Cecil said he hopes enough demand for the course will exist to schedule three classes per semester. He also hopes to get involvement from the business/economics professors who could help students explore the future of energy-related investments in a carbon-constrained world.

Peak oil-awareness has slowly started to seep into the research interests of academia, although the theory's premises continue to be disputed (i.e. energy consultant Michael Lynch, who I've interviewed in the past, with rebuttal here). Cecil is one example of a professor sounding the alarm to students, but there's also the University of Oregon and Johns Hopkins University, which held a conference earlier this year about the potential effects of oil depletion on health care.

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Tags: peak oil, education

Posted by Morgan Josey Glover on Thursday, September 3, 2009 at 12:54 pm

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Andrew Brod

September 4, 2009 - 10:11 am EDT

Peak Oil is the stupidity that keeps on... being stupid. As I've noted before, peak oil comes with two parallel predictions: (1) that global oil production will soon peak, and (2) that economic and social catastrophe will ensue. In spite of Michael Lynch's common-sense rebuttal, #1 might be right. For example, the short-run supply response to the increasing global demand for oil in the late 1990s and early 2000s was fairly minimal. Whether we'd see something different with sustained high prices (rather than episodically and spiky high prices) is a good question.

If peak-oilers stopped at #1, I'd never make fun of them, because then it'd just be a debate among geologists and other scientists. But so peak-oilers don't stop there, as witnessed by that silly Johns Hopkins conference. And that brings us to #2, the prediction of economic catastrophe.

#2 is where the stupidity is. Peak-oilers are apparently unable to understand how prices work in a market economy, or their effect on economic behavior. If peak-oilers are right about #1 (and again, they may well be), the results will be reflected in rising prices. What do rising prices do, for any product, not just oil? They lead consumers to look for substitutes and producers to look for alternative sources and technologies. We've seen it before, and it's odd to claim that we won't see it again.

It might appear at first blush that 2008 provides support for the peak-oilers. After all, we saw a run-up in oil prices followed by a financial crisis. But this is one of those times when we must separate correlation from causality. The oil-price spike didn't cause the financial crisis or the deepening of the recession that started in late 2007.

Peak-oilers want us to ask, "What should we do?!" That's a great question for most environmental issues. In the case of climate change, there is a huge role for government, and if you care about this issue, you should urge your senators to support the cap-and-trade bill. See my recent BizJ column for an explanation of C&T:

https://web.uncg.edu/bae/documents/cber/article0yBLJxGtgK.pdf

But for peak oil, the question "What should we do?!" is comparatively useless. Government has a role to play when markets don't work well. We have little or no evidence that this is the case in oil markets. When prices are high, people economize and producers find alternatives. When prices are low, they don't. That's how it's supposed to work. If the peak-oilers are right, prices will rise even without government intervening, and consumers and producers will do what they always do when the price of something rises.

Now, there is one thing government could do... though it'll never do it. The firestorm of opposition would be too huge. The one problem I can see in oil markets is the spikiness of prices. If we want to provide the private sector with a consistent incentive to find new sources and new technologies, we should establish a tax that would be triggered only when the price of oil falls below some level. We know that $100 oil will return--it's only a matter of time. So maybe, given the current price of about $70, we'd set the tax to keep oil prices no lower than $70 per barrel. Or maybe the trigger point should be $60 or $80. In any case, you can guess how popular such a policy would be. It'd do the job of smoothing out the ups and downs of oil prices, or in any case the downs. But voters would hate it.

Andrew Brod

September 4, 2009 - 10:13 am EDT

None of this is to say that government shouldn't increase funding for basic energy research. But it should have been doing that all along.

Morgan Josey Glover

September 4, 2009 - 12:12 pm EDT

Thanks Mr. Brod for your feedback. I think you raise some good points in distinguishing between government's potential role in responding to climate change versus peak oil, and I've heard other people mention that government has little to no role to play in the peak oil situation, whatever that situation turns out to be. I've also heard suggestions about the government setting a price floor so that consistent investment can be made in alternative fuels and technologies, which require a long time to scale through mainstream society.

To me, the peak oil debate is really about how elastic our lifestyles and infrastructure are when it comes to oil dependency and how much personal and institutional discomfort we'll face when the price of oil reaches certain price points as well as how that will play out on the political stage globally (i.e. as non-OPEC conventional oil peaks first) and locally (i.e. what happens if you're a commuter from a rural community and can't afford an electric vehicle). A lot of attention has been payed to people at the extremes (i.e. the peak oil and climate change doomers who are predicting mass die-offs when history proves humans are an incredibly resilient and clever species as well as the techno-optimists who've been heralding a hydrogen age for decades). Instead we would be better served by having a conversation about what is most likely to happen over the next 15 years or so and what preparations make the best sense. Interestingly, peak oil fears are driving a lot of change right now in the push for local food systems and so on, a market shift that could make peak oil a non-issue.

Andrew Brod

September 4, 2009 - 2:02 pm EDT

"Elastic": That's the perfect word to describe what I called peak-oil claim #2. How flexible will our lifestyles, and more broadly our economy, be in the face of rising oil prices? It's a question that has nothing to do with peak oil, per se. After all, rising global demand was a much bigger factor in the run-up of oil prices that started in 1999, entered the public consciousness after Hurricane Katrina, topped out in mid-2008, and appears to be resuming. To the typical driver, it doesn't matter whether $4 gasoline is the result of declining supply or burgeoning demand in China and India. All that matters is the $4.

The best (though hardly perfect) guide to the future is what we've seen in the past. The U.S. economy is roughly twice as energy-efficient as it was 50 years ago, in that we produce a dollar of inflation-corrected GDP for about half the energy it took back then. But when did energy efficiency improve the most? It was during periods when oil prices were rising the fastest. Clearly, consumers and producers in our economy respond to price changes.

But the adjustment won't easy or cheap. In other words, our demand for oil is not highly elastic. In fact, in the short run it's pretty inelastic. There will be costs of adjustment. As you note, someone who commutes an hour each way to work may well rethink her locational choices. That might mean selling and buying homes, and that's hardly a cheap or easy process to go through. But people will adjust. It'll take a little time, and it won't be easy, but it'll happen.

However, it'll be much, much easier than the peak-oilers appear to believe. Their catastrophe predictions depend on the assumption that we'll never find good substitutes for oil, or that we won't find them soon enough to prevent economic collapse. That's an odd thing to assume.

Morgan Josey Glover

September 4, 2009 - 12:19 pm EDT

I would like to add that I encourage Mr. Brod or anyone else with an opinion or insight about climate change, peak oil or other sustainability issues to consider submitting a "Green Voices" column for goGreenTriad.com, which I manage. My hope is that the site would evolve to feature robust and diverse conversation on the challenging energy and environmental issues our country faces.

Andrew Brod

September 4, 2009 - 8:39 pm EDT

And then there's this:

http://www.businessweek.com/magazine/content/09_37/b4146000578301.htm

It doesn't disprove the peak-oilers' claim that production will soon start declining forever, but it does show that we're not quite out of oil yet. It also shows how new technologies allow us to drill deeper and in tougher environments.

Morgan Josey Glover

September 8, 2009 - 12:31 pm EDT

I have to say that I'm not convinced that peak oil is not going to be a serious issue in the years ahead. Many people predicted the current credit and housing crises yet many economists were blindsided by it (as pointed out in Paul Krugman's recent New York Times essay). Hurricane Katrina is another example. Of course the world didn't end, but it's caused a lot of hardship for people that will affect them for years and sometimes decades.

Robert Hirsch, who raised the alarm about peak oil a few years ago with his government commissioned report, was recently interviewed and had this to say:

"Peak oil is a bigger issue than health care, than federal budget deficits, and so forth. We’re talking about something that, to take a middle of the road position—not the Armageddon extreme and not the la-la optimism of some people—is going to be extremely damaging to the U.S. and world economies for a very long period of time. There are no quick fixes."

Full interview here: http://www.aspousa.org/index.php/2009/09/interview-with-bob-hirsch-the-s...