Relatively new to your site, which I find interesting indeed. What will be

the effect of the "peak oil" phenomenon on your predictions? Have you

considered it anywhere in your blogs?

...I've recently been very interested and heavily immersed in the topic of peak oil. One website that I've learned much from is www.lifeaftertheoilcrash.net in case you are interested. Basically, I'm worried that although technological progress is limitless in and of itself, we may not be able to advance much farther due to looming energy problems that may cause humanity to take huge technological steps backward in order to survive...

I have been reading your various websites for a number of years. I read your Robotic Nation website. I enjoy thinking about the future - as it appears that you do too. So - I was wondering if you have ever blogged or written about your thoughts on so-called Peak Oil - and the future that we face given an almost certain decline in the availability of cheap oil.

I seem to be getting a lot of mail lately about the phenomenon known as "peak oil" -- the prediction that we have consumed half of all of the oil available on the planet, and will consume the other half quite rapidly. For example:And:And:And so on.Wired magazine chimed in last week with this article:On June 5, FX first broadcast its new documentary called "Oil Storm: America's Lifeline has been Severed," which discusses a scenario where a slice of America's refining infrastructure fails and leaves us in a place where we suddenly do not have enough gasoline. [There is a trailer available on the FX home page The FX scenario is actually something to worry about. In the U.S., because of market forces, supply and demand for oil are almost perfectly balanced. If a rogue hurricane or rogue terrorists were to take out several refineries, America does have a problem. The way to fix that is to recognize that oil is as important as oxygen to the American economy right now. We need to build 10% to 20% extra oil production capacity to handle an emergency like this (despite the fact that it is "economically inefficient" to do so). Whether or not we have the foresight to do that is an open question, but it is strange for the U.S. to have a Strategic Petroleum Reserve without having "Strategic Refinery Capacity" as well. We need to do the same thing for electricity , roads and several other vital resources.But ignoring a catastrophe like that, what about peak oil itself -- the idea that the U.S, Europe, China, India, etc. will be burning through the planet's remaining oil reserves quickly (say in 50 years) causing massive price spikes in the very near future? What will happen?Personally, I don't think anything will happen. I look at "peak oil" in the very same way I looked at the "Year 2000 crisis" in 1999 . "Peak oil" will be a non-event. We will see prices for gasoline go up, yes, and there may be some short term spikes that are a little disruptive, but overall I believe we will work this out in a natural way.The very simple explanation for why this will happen can be summarized in about 15 words: As oil gets more expensive, other technologies will compete on price and replace oil.Here is the simplest example. Right now, in 2005, we are about to reach the point where you can buy a tanker car full of soybean oil for about the same price as a tanker car full of diesel fuel. With a very simple reactor you can turn the vegetable oil into biodiesel. That puts a cap on the price of diesel fuel. Petroleum diesel prices cannot increase much above the price of biodiesel, or people will stop buying petroleum diesel.A naysayer would point out, "But that will cause the demand for vegetable oil to rise, which will increase the price of biodiesel." True. But within a year farmers around the world can be growing more soybeans, which will increase the supply. People will start buying efficient diesel hybrid cars and trucks as the price of biodiesel stabilizes. The demand for petroleum will decline.That sentence "People will start buying efficient diesel hybrid cars and trucks..." is important. Right now we are using incredibly inefficient vehicles. When you burn a gallon of gas in your car, maybe 20% of the energy in the gasoline gets turned into motion. The rest turns into useless heat. That leaves a lot of room for increasing the efficiency of cars. So if the price of gas doubles, we can switch to cars that get double the gas mileage, and the price increase in gasoline becomes meaningless.There are so many technologies available for producing energy. Most of them are not quite economically viable because oil is still quite cheap. But as oil prices continue to increase and head toward $100 a barrel (which could happen within a year or two without too much trouble), all of these technologies start to become viable. Here are some examples:In other words, there are so many new options that become available as oil prices rise that we will simply replace oil with all of these other technologies.One question, which has been asked by many people in many places, is this: why don't we accelerate the process by artificially increasing the cost of gasoline? ( This article explains that in China, where energy prices are held artificially low, people waste a lot of energy -- "every kilogram equivalent of coal only produces a gross domestic product of $0.36 in China, vastly lower than Japan's $5.58 and the world average of $1.86.") The advantage of artificially increasing gasoline prices is that it would make all of these new technologies viable more quickly while, potentially, reducing global warming To summarize -- rising oil prices will make other technologies economically viable. There are hundreds of other technologies to choose from. Normal economic pressure will naturally cause oil to become less and less important to our economy. That is why I am not worried about "peak oil".[See also this Follow-up post on peak oil which talks about how simple it would be to supply all of America's energy needs with nuclear or solar energy. (See also peak oil )]