Earth & Environment - Posted by Sylvia Wright-UC Davis on Thursday, November 11, 2010 16:32 - 4 Comments 
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(No Ratings Yet) Loading ...Will oil run out 90 years too soon?
Study author Debbie Niemeier says the findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development, and natural ecosystems. "We need stronger policy impetus to push the development of these alternative replacement technologies along." (Credit: iStockphoto)
UC DAVIS (US) — At the current pace of research and development, global oil will run out 90 years before replacement technologies are ready, says a study based on stock market expectations.
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The forecast, published this week in the journal Environmental Science & Technology, is based on the theory that long-term investors are good predictors of whether and when new energy technologies will become commonplace.
“Our results suggest it will take a long time before renewable replacement fuels can be self-sustaining, at least from a market perspective,” said study author Debbie Niemeier, a professor of civil and environmental engineering at the University of California, Davis.
Niemeier and co-author Nataliya Malyshkina, a UC Davis postdoctoral researcher, set out to create a new tool that would help policymakers set realistic targets for environmental sustainability and evaluate the progress made toward those goals.
Two key elements of the new theory are market capitalizations (based on stock share prices) and dividends of publicly owned oil companies and alternative-energy companies. Other analysts have previously used similar equations to predict events in finance, politics and sports.
“Sophisticated investors tend to put considerable effort into collecting, processing and understanding information relevant to the future cash flows paid by securities,” says Malyshkina. “As a result, market forecasts of future events, representing consensus predictions of a large number of investors, tend to be relatively accurate.”
Niemeier says the new study’s findings are a warning that current renewable-fuel targets are not ambitious enough to prevent harm to society, economic development, and natural ecosystems.
“We need stronger policy impetus to push the development of these alternative replacement technologies along,” she says.
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4 Comments
Brett
It’s a nice bit of statistical reasoning. And utterly wrong.
We still have some gigantic future technologies missing (most notably game-changing batteries, which the future global solar + wind + wave + electric vehicle industries will all necessarily rely upon): while I’d expect the biggest energy technologies of the future to be discontinuous and unpredictable. That’s how innovation works, and that’s something you can’t really price in to an analysis like this.
Economically and technologically, the most rational thing would be to close down every single car company in the world until we’ve got battery technology massively nailed. In my opinion, all electric and hybrid cars in production now are just vanity objects, being made 10+ years too early. Welcome to the future. :-(
J Hayes
The scary part is that those people in charge of energy companies are greedily working on short term goals to maximize their profit and pay so thinking far enough out to consider the time when fossil fuels run out is beyond their intellectual capabilities. Like the bankers who made big profits getting us into the current economic mess, those in charge of energy companies will continue their greedy methods until there’s no more fossil fuels left.
Chaz
No one is going to wake up and find the tanks are empty. Rather, you are going to wake up and find that oil based fuels now cost more, and then you will be more careful about what you use and/or switch fuel sources to something else that is relatively cheaper.
If you want to get a head start:
- insulate your house
- install thermally effiicient windows
- install energy efficient appliances
- install CFC (compact flouescent) light bulbs
- add solar power to your house
- drive a smaller car with a smaller engine
- walk more
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We’ll just ignore the investors who didn’t predict the GFC shall we when applying that theory.
So if oil runs sooner than expected global industry wont go into overdrive looking for a replacement because otherwise there wont be an economy anymore?
I can see global oil prices sky rocketing as only being a good development for society reducing overall energy use, improving efficiencies and particularly the science behind alternative energy developments.