I'm not sure I get the anger directed at oil traders. Traders help implement the pricing function of the market. It's a fact that we're going to run out of oil. You can debate about peak oil, etc, but that's an argument about when we're going to run out of oil, not if. We hit peak reserves in 1980--ever since then the rate of new discovery has been less than the rate of extraction. When it sinks in that we're going to run out of oil, why wouldn't prices skyrocket? Why does anyone think the market will wait until oil production actually starts declining in order to price the eventual depletion into the price of oil?
We're never going to run out of oil, just like we're never going to run out of gold or silicon or gravel or any other mineral resource. But as supply eventually declines the price may rise enough that petroleum can no longer feasibly be used as a vehicle fuel or chemical manufacturing feed stock.
You and the grant parent are arguing about a technicality.
"Oil prices being so high that oil cannot be used economically for anything" vs. "Actually running out of oil" would have the same consequences on modern society.
>But as supply eventually declines the price may rise enough that petroleum can no longer feasibly be used [...] //
It can still feasibly be used by those who own the oil stock itself. It's not the inherent cost that is increasing only the market price. As the price rises the market should work to ensure that every last drop of oil is bled from the Earth. If the price goes to high then [in a perfect market] it will drop back to ensure maximum exploitation.
It's only a falling price below the production cost that makes it infeasible to extract surely?
Not really. As oil grows scarcer it becomes more expensive to extract, regardless of whether you own the mineral rights. At some point the price will rise high enough that it's cheaper to substitute other goods for petroleum. For example liquid hydrocarbons can be manufactured using the Fischer–Tropsch process.
I agree with most of that argument. However, it is an oversimplification ... obviously people are speculating this commodity and that can (and does) drive up price, much more so than by simple virtue of 'peak oil'.
It's better to scare the public with peak oil stories, than actually doing the research and finding out some people are getting rich, and not adding any value to the system in any way.
I think they are adding value to the system. They're moving the price of oil up, and the efficient price of oil is surely higher than what the price of oil is now.
The alternative is government intervention, and people are tremendously resistant to that.
Take, for example, water. Water needs to be expensive because people are using it waste fully because it's cheap. You could have water traders bid up the price of water. Or you could have the government tell people to stop using so much water. I'd personally prefer the government to tell LA and Phoenix they all need to move somewhere that it rains, but that's not going to happen. And I'd rather not see Goldman get rich while people die of thirst. So we'll just run out of water instead. People in Arizona will use it to water their fucking lawns until it runs out.
>Water needs to be expensive because people are using it waste fully because it's cheap. //
You could ration it - allow people to sell their ration and reward water conservation; or provide a free allowance with an increasing charge for additional volume. Simply making water the same amount of expensive per litre isn't right IMO. Water should be treated differently as it's such a necessity for life.
