Richard Heiberg argues that the longer we delay adapting to the inevitable depletion of worldwide oil reserves, the more painful the coming economic transition will be:
The supply of extractable oil is subject to geological limits. At some point those limits will overcome our ability to produce oil at the ever-expanding rates that growing economies demand. The global peak is likely to occur well before societies adapt painlessly to a different energy regime. And that likely time lag contradicts the way orthodox economists imagine that rising prices solve supply shocks by steering economies to develop and use substitutes.
Oil is different from most commodities, because, as President Bush so memorably declared, we are addicted to it, and because substitute energy sources cannot be developed and deployed overnight. And as long as oil remains available and profitable, the existing energy regime also resists the development and substitution of alternatives.
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