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CellBioGuy comments on What are your contrarian views? - Less Wrong Discussion
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Price is set on the margins. The marginal barrels of oil coming out of the ground are certainly in the ballpark of $100, from various shale and tight deposits.
The oil prices do not play by the economics textbook rules because most of the world's oil production is controlled by governments and governments have a variety of interests and incentives beyond what a profit-maximizing purely economic agent might have.
Oil is nearly utterly irrelevant to electricity, however. Nobody sane produces electricity on anything but the most minor of scales using it, and given mass-market electric cars, it is never going to be able to compete on price with electricity. charging a 100 kwh battery pack from bone dry to full would cost an average of 12 dollars and change in the US. That is the equivalent of a gas price of <60 cents per gallon, and electric cars are a better driving experience. (well, a car with a 100 kwh battery back certainly will be. That's a lot of oomp.) The sauds aren't going to be able to beat this transition just by dropping the price of oil for a year or two, nor are price hikes on the electric side going to do it - most of the cost of electricity to private consumers is taxes, so even quite large rises in the cost of coal and gas will not translate one-to-one as end-customer pain, and the differential in price is simply to large. More importantly, the electrification of the world continues apace, and most of the places joining the age of the electron do not have vast coal reserves of their own. The secular pressure to go nuclear is only going to rise, and most of the world is well beyond the reach of the various groups dedicated to the defense of helpless Actinides.
At the moment. But your scenario assumes that most of transportation switches its energy source from petrol/diesel to electricity. That implies that the demand for oil will drop through the floor. And that implies that oil will become very cheap. Which in turn implies that it will again start to make sense to burn it to make electricity to recharge the car batteries.
Remember that electricity is not a source of energy. To support your case for nuclear you need to show that coal and hydrocarbons will be unable to support the energy needs of the humanity in the near future. Whether cars run directly on hydrocarbons or whether there is the intermediate stage of electricity involved does not matter much for this issue.
Oil has uses other than automotive fuel - way before it reaches the point where it becomes competitive with coal or uranium for stationary power plants, demand from the plastics, avionics and the petrochemicals industry is going to put a floor on the price. I don't expect the saudi oil to stay under the sand, but as an energy player, the global oil industry is doomed. Coal is going to be raking in money hand over fist for a while as prices spike, but once a transition to fission starts, - and high coal prices will get that started - they are done for too. King coal only still reigns at all because the world has been collectively insane about fission due to living in the shadow of the atomic bomb.
Certainly true and yes, that will put a floor under the price.
That's good, isn't it? People have been pointing out for quite a while that just burning something as useful as oil is pretty silly. It also means that the world is not going to run out of oil in the foreseeable future, right?
I don't know about that -- there is an awful lot of gas around.
Do you happen to have some sort of a timetable for your predictions?
While that may be true, I don't see any signs of the world becoming more sane.
I assure you that this is not true, unless I misunderstand you.
edit:
The Finding and Development cost of a typical worthwhile shale play is $1.50/Mcf (many are even better), the current natural gas price is $3.50/Mcf. Of course there are crappy fields with higher F&D cost, and these won't be drilled until prices are high enough to justify it. In effect there is a continuum of price/barrel out there in the world and this is not what controls present day prices.