CN:Risk attitude, not peak oil, will shape energy future
Fears about peak oil are misplaced. Peak oilers focus on reserves and production of conventional (light) crude and ignore the much larger hydrocarbon base of heavy oils, coal, natural gas, kerogen and gas hydrates.
With current extraction and refining technologies there is an almost unlimited supply of fossil fuel energy -- including high energy-density liquid fuels suitable for transportation -- at real prices less than $100 per barrel. We will have cooked the planet through global warming long before we run out of fossil fuels.
Rather than fret about peak production, investors, policymakers and voters should be concerned about how much energy will cost; what the environmental impact would be from combusting so much carbon-based fuel; and how to encourage investment in capital-intensive technologies with long pay back periods when there is so much volatility and uncertainty about what energy prices will look like in future.
Energy businesses and policymakers have no choice but to embrace uncertainty and find ways to manage it. How they do that and their attitude to risk will determine which of several different possible energy futures we face.
