179. FOUR REASONS WHY WE WON'T RUN OUT OF FOOD
I've already established that oil will not peak without warning. But assuming it did, or that we were still completely unprepared for some reason, let's see why the scenario of starving to death because of oil shortages is simply not going to happen.
- Demand is controlled by prices. The 0.15 worldwide elasticity of oil prices means that a 5% reduction in supply each year will cause an annual price increase of 33%. This is not unprecedented … in fact it's only slightly higher than the price rises we're experiencing now. It will cut away demand and make alternatives like shale, tar, gas, biofuel, coal and grid-powered cars more profitable. These technologies are far more advanced and far more ready for implementation than they were back in the 70s. You would also expect to see efficiency improvements for trucks just like we're now seeing for cars.
- If the food supply is really at risk, the government can take steps to protect it with fuel rationing and driving restrictions. The IEA "Saving Oil in a Hurry" report lists measures that, if all used simultaneously, could restrict automobile use 30%. That alone offsets the effects of Peak Oil for at least six years. On top of this, if worldwide oil shortages are a real problem, it is likely that some kind of international body will coordinate measures to ration oil and ensure that there is enough for the most vital uses. Contrary to what you might think, leaders are generally neither incompetent nor evil. They just need to be convinced that there is a certain and immediate threat, which there isn't at the moment.
- Who says that oil shortages have to demolish the economy in the longer term? Peak Oil could actually have a positive effect, creating new jobs and industries in a headlong rush to develop alternatives. In some ways I can't think of anything better for the car industry than replacing every car in the country with a fuel cell vehicle.
- Oil production doesn't have to follow the Bell Curve exactly. Production will actually increase some years, just as it has fluctuated in the past. This will give the economy a respite and buy more time for adjustments to the new economy.
As a further note, GM is aiming to sell a commercial fuel-cell vehicle as early as 2010, and no later than 2020 (Source). Next year you will be able to buy the zippy ENV Fuel-Cell Motorbike for around $6000 AUD, or $4500 US.
-- by Roland