It's not just the "peak oil" eco loons. Even analysts I respect, such as Tullett Prebon, are pessimistic about energy.
According to Tullett Prebon's latest report, global economic growth is going to be lower because of diminishing energy-returns. Back in the 1930s, it would apparently take one unit of energy to obtain one hundred units of energy. By 1990, it took one unit to produce forty units. Today, the ratio is one unit to seventeen.
Tullett Prebon says that once that ratio falls to less than one unit to fifteen, we are in trouble. Perhaps.
It might not feel like it right now, but I wonder if in fact we are heading towards a new era of cheap, plentiful energy? Tullett Prebon might be right, but like nay sayers so often do, they fail to take into account technological change.
Brian Viner's brilliant piece in today's Telegraph shows that the world's known - and accessible - oil reserves have never been higher. Why? Because of technology.
Perhaps the reason why energy-returns are the way they are is precisely because of all that extra investment there has been in getting the stuff out the ground? The new technology might be costly, but the one thing we know about new technology is that the price goes down rapidly (See everything from DVDs to ipads).
The same phenomenon is at work with solar cell technology, the costs of which have plumetted. It is only a matter of time before millions of homes in Africa and Asia - not to mention Essex - are covered in the stuff. No need for subsidies either - in fact the key is to get government out the way, starting with those ruinous renewable targets.
Technology will, I suspect, also solve that other problem Tullett Prebon highlights; debt. Tullett Prebon are absolutely right about the way that government has grown. So we will just have to manage with less of it.
Thanks to digital technology, it is going to be a lot easier than we imagine.blog comments powered by Disqus
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