Wednesday, March 03, 2010

Peak Oil and Climate Change

Did you know that climate change is bringing peak oil nearer?

Energy is already a volatile industry, so risky investments are already shunned. The climate change debate only adds a healthy dose of uncertainty to the mix: Will this operation be shut down for climate concerns? Will a new green technology supplant it? Will it be unprofitable with new taxes? Will it be exploited at all with new caps?

So what do the energy companies do with this uncertainty? They don't invest in new energy supplies--and that's what brings peak oil closer because new supply stalls while demand rises.

I would say the best thing to do in this case is to bite the bullet and do something. Suck it up, add a carbon tax, and let the energy companies make prudent decisions about which resources to develop.

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