On Apr 21, 6:23=A0am, "V-for-Vendicar"
<Just...@[EMAIL PROTECTED]
> wrote:
> "(David P.)" <imb...@[EMAIL PROTECTED]
> wrote in message
>
>
news:62620a3d-5dd7-44d1-97ef-31e53d9790f0@[EMAIL PROTECTED]
>
> Op-Ed Columnist
> Running Out of Planet to Exploit
>
> By PAUL KRUGMAN
> Published: April 21, 2008
>
> Nine years ago The Economist ran a big
> story on oil, which was then selling for
> $10 a barrel. The magazine warned that
> this might not last. Instead, it suggested,
> oil might well fall to $5 a barrel.
But the only truely interesting question about oil and economics
is why do economists and speculators even spectulate
about the future of idiot fossil fuels, partulcuarly oil anymore.
Since the intelligent money in science, engineering, and
technology,
pulled out of the fossil fuels markets almost 60 years ago now.
Partuclary since the only thing idiot magazine publishers
even seem to know about oil is the Wal-Mart warehousing price,
rather than the cost.
> In any case, The Economist asserted,
> the world faced =93the prospect of cheap,
> plentiful oil for the foreseeable future.=94
>
> Last week, oil hit $117.
>
> It=92s not just oil that has defied the com-
> placency of a few years back. Food
> prices have also soared, as have the
> prices of basic metals. And the global
> surge in commodity prices is reviving
> a question we haven=92t heard much since
> the 1970s: Will limited supplies of natural
> resources pose an obstacle to future
> world economic growth?
>
> How you answer this question depends
> largely on what you believe is driving the
> rise in resource prices. Broadly speaking,
> there are three competing views.
>
> The first is that it=92s mainly speculation =97
> that investors, looking for high returns at
> a time of low interest rates, have piled
> into commodity futures, driving up prices.
> On this view, someday soon the bubble
> will burst and high resource prices will
> go the way of Pets.com.
>
> The second view is that soaring resource
> prices do, in fact, have a basis in funda-
> mentals =97 especially rapidly growing
> demand from newly meat-eating, car-
> driving Chinese =97 but that given time
> we=92ll drill more wells, plant more acres,
> and increased supply will push prices
> right back down again.
>
> The third view is that the era of cheap
> resources is over for good =97 that we=92re
> running out of oil, running out of land to
> expand food production and generally
> running out of planet to exploit.
>
> I find myself somewhere between the
> second and third views.
>
> There are some very smart people =97
> not least, George Soros =97 who believe
> that we=92re in a commodities bubble
> (although Mr. Soros says that the bubble
> is still in its =93growth phase=94). My problem
> with this view, however, is this:
> Where are the inventories?
>
> Normally, speculation drives up commodity
> prices by promoting hoarding. Yet there=92s
> no sign of resource hoarding in the data:
> inventories of food and metals are at or
> near historic lows, while oil inventories
> are only normal.
>
> The best argument for the second view,
> that the resource crunch is real but tem-
> ****ary, is the strong resemblance between
> what we=92re seeing now and the resource
> crisis of the 1970s.
>
> What Americans mostly remember about
> the 1970s are soaring oil prices and lines
> at gas stations. But there was also a
> severe global food crisis, which caused
> a lot of pain at the supermarket checkout
> line =97 I remember 1974 as the year of
> Hamburger Helper =97 and, much more
> im****tant, helped cause devastating
> famines in poorer countries.
>
> In retrospect, the commodity boom of
> 1972-75 was probably the result of rapid
> world economic growth that outpaced
> supplies, combined with the effects of bad
> weather and Middle Eastern conflict.
> Eventually, the bad luck came to an end,
> new land was placed under cultivation,
> new sources of oil were found in the
> Gulf of Mexico and the North Sea, and
> resources got cheap again.
>
> But this time may be different: concerns
> about what happens when an ever-growing
> world economy pushes up against the limits
> of a finite planet ring truer now than they
> did in the 1970s.
>
> For one thing, I don=92t expect growth in
> China to slow sharply anytime soon.
> That=92s a big contrast with what happened
> in the 1970s, when growth in Japan and
> Europe, the emerging economies of the
> time, down****fted =97 and thereby took a
> lot of pressure off the world=92s resources.
>
> Meanwhile, resources are getting harder
> to find. Big oil discoveries, in particular,
> have become few and far between, and
> in the last few years oil production from
> new sources has been barely enough to
> offset declining production from
> established sources.
>
> And the bad weather hitting agricultural
> production this time is starting to look
> more fundamental and permanent than
> El Ni=F1o and La Ni=F1a, which disrupted
> crops 35 years ago. Australia, in particular,
> is now in the 10th year of a drought that
> looks more and more like a long-term
> manifestation of climate change.
>
> Suppose that we really are running up
> against global limits. What does it mean?
>
> Even if it turns out that we=92re really at or
> near peak world oil production, that
> doesn=92t mean that one day we=92ll say,
> =93Oh my God! We just ran out of oil!=94 and
> watch civilization collapse into =93Mad Max=94
> anarchy.
>
> But rich countries will face steady
> pressure on their economies from rising
> resource prices, making it harder to raise
> their standard of living. And some poor
> countries will find themselves living
> dangerously close to the edge =97 or over it.
>
> Don=92t look now, but the good times may
> have just stopped rolling.
> .
> .
> --
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