If, and it is the biggest if, if a new energy source came online, something like cold fussion, what would happen to the economic landscape? Would gold lose its value as a store of value if energy was freely available?
The Hirsch Report stated it would take 20 years to mitigate peak oil production. That would mean that if Hubert is right, and the peak is now, alternative energy would have had to be put in line in 1991. But what if a new energy source came online fast? What would happen to demand for it and other resources?
It is my belief that one of oil's main values is its ability to store value. This is why alternative energies are inferior to oil. Oil is potable and storeble. Energy from wind, solar, and water need to be used instantly as there is no way to store them. Battery power has not adapted to demand.
Until there is a perfect and unlimited cheap energy source, gold will be the unit of account for measuring resources. After oil, gold will hold chip position over all units of account until a new cheap energy comes on line. The until may never happen, but I will hope it does, as if it does not, peak oil will wreck havoc on industry.
Every day it's actually increasingly unlikely that a new energy source as good as or better than oil will be found. Since we've probably already reached the peak, increasingly larger percentages of oil production will be used to maintain society, leaving diminishing percentages for R&D.
ReplyDeleteThe thing to do would be to immediately cut unnecessary oil usage now to get back ahead of the curve (or would it be behind the curve?) and free up resources. I personally doubt anything will ever be found close to oil, but by cutting back resources could still be put towards things like solar, wind, organic farming, etc.
Blindweb