Olsen said:
But oil is only 28% of our total GNP.
Hmmmm sounds like something an economist would say
🙂
Here's something to ponder that might (should?) cast the BBC article on Norway's declining oil production in a different light. The title "Norway prepares for dry North Sea" is rather ironic when you consider that the UK's share of the North Sea is also in decline.
http://news.bbc.co.uk/2/hi/business/3622129.stm
********************************************************************
"Economic students are taught that banks "create" money every time they make a loan, and that the economy is powered by money instead of energy. The juxtaposition of these two data (the first is true, the second is false) leads even Nobel Prize-winning economists to conclude they have discovered a perpetual-motion machine!
No person has had a greater influence on the thinking of experts who have become government regulators of the world's oil and gas industries than economist Morris Adelman: "There are plenty of fossil fuels and no limit to potential electrical capacity. It is all a matter of money."
But Adelman -- and every government regulator he has ever influenced -- is wrong. It is a matter of energy!
Although economists treat energy just like any other resource, it is not like any other resource. Available energy is the prerequisite for all other resources. Moreover, universal energy laws tell us that the economist's perpetual-motion machine is impossible.
To lift 15 kg of oil 5 meters out of the ground requires 735 joules of energy just to overcome gravity -- and the higher the lift, the greater the energy requirements. The most concentrated and most accessible oil is produced first; thereafter, more and more energy is required to find and produce oil. At some point, more energy is spent finding and producing oil than the energy recovered. Thus, Adelman is wrong: it is not all a matter of money.
Neither capital nor labor nor technology can "create" energy (the first law of thermodynamics). Instead, available energy must be spent to transform existing matter (e.g., oil), or to divert an existing energy flow (e.g., wind) into more available energy. The engines that actually do the work in our economy (so-called "heat engines"; e.g., diesel engines) waste more than 50 percent of the energy contained in their fuel (the second law). Thus, Adelman is wrong again: there is a physical limit to potential electrical capacity."
-- Jay Hanson
"Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."
-- Kenneth E. Boulding
