So Now What?

All right, I've given you pretty much a brain dump of what I think of the oil situation. I didn't want to leave things in such a negative state, and I wanted to share what my personal thoughts are as far as going forward is concerned.

It goes something like this.

As long as our cars run on gasoline:

• the number of nuclear power plants are irrelevant to transportation prices.
• the number of coal plants are irrelevant
• the number of natural gas plants are irrelevant
• the number of solar plants are irrelevant
• the number of wind plants are irrelevant
• the number of thermal plants are irrelevant
• the number of hydroelectric plants are irrelevant
• etc., etc., etc.

However, if our transportation was electric, we could fuel it with coal, wind, solar, nuclear, natural gas, geo-thermal, or anything we wanted. The great thing about electricity is that you can't tell which fuel generated it.

The obstacles are technical at this point. Importantly, they are not infrastructural. Unlike hydrogen or other new physical commodities as fuels, no new pipelines or fueling stations or rails or other major infrastructure projects are creating a chicken or the egg type situation. (For instance, in order to use hydrogen powered cars, you need hydrogen fueling stations - which no one will build until there are hydrogen cars - which no one will buy until there are hydrogen fueling stations.)

The main technical obstacle is battery technology. Fortunately, there is a great deal of work going on in batteries and progress is being made. Also, all the car manufacturers are moving towards hybrids of one type or another. So, things are in the works.

But this is all on a timer. According to the oildrum.com (which seems like a pretty good source), peak oil was in 2005 with a shallow decline happening until 2011, at which point the decline accelerates.

There is going to be a race between reducing our reliance on oil and the falling rate of oil production. Things are already in motion, and some rational decisions are begin made.

First, people are actually driving fewer miles at this point. The number of miles driven in the United States has now fallen (for the first time in at least 20 years) for the past 2 years. Also, automotive manufacturers are closing minivan and truck plants, and changing their product mix to smaller vehicles due to changing market demands. A number of plug-in hybrids (which are both electric and gasoline powered) are coming between 2009 and 2011. This will reduce demand and make the oil last longer.

Second, I think we should drill domestic continental shelf oil and even ANWAR. We should also clear up the legal obstacles preventing land that should be drill-able from actually going into production. This will slow the reduction in production (specifically 5-7 years from now when we will really need to slow the decline).

Third, I believe we should begin building new electric power plants (pick your flavor - nuclear and coal seem the best at this point). This should be done because parts of the country are already near electric capacity, and if we bring our transportation system to electric, we are going to need more power. Fortunately, coal is cheap, and nuclear isn't anymore expensive than it always has been. This gets us ready for an electric future.

And, fourth, we should let the market work. Solar costs are going to come down, and lots of other really neat stuff will be developed to meet demand. We've done something like this once before in the 1970s. Much more of our industry was based on oil, but since then, really just our transportation is totally reliant.

To sum up, the race is on. Get transportation off of oil, before it puts the brakes (and even reverse thrusters) on the global economy.