173 comments on How to Address Contrarian Arguments – part III
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"Because, in my opinion, there are only difficult and expensive substitutes for oil, Peak Oil is a Big Deal that will transform our lives."
1) I mostly agree -- depending on how we define the word "transform". I am certainly no "doomer", but finite resources are a constraint. Accordingly, I have already begun educating my boys on PO, its implications for the future, and for the types of job openings likely to be in demand in 10 years when they finish college.
2) This implies that the price of oil will rise faster than inflation in the years to come. If we add geopolitical concerns on top of this, we get that we all should be hedging this risk by owning domestic reserves in our portfolio. The energy index funds contain exposure to refining and the drillers, but there are a few publically traded firms that are more narrow.
3) I hope those who post here that truly believe in peak oil have been investing what funds they have accordingly. There's an old saying that goes roughly as follows, "If you want to know what someone believes in, flip through their checkbook". (A variation of "preferences are revealed through choice" phrase so often used by those in econ departments.) I hope the more vocal posters here are investing according to their beliefs.
Sonic - I adopted this very strategy last year, dumping many higher risk oil and mining stocks, to focus on companies with reserves concentrated in the OECD. Encana is I believe 100% N America, but the list of companies not exposed to political risks is pretty short. Quality exploration potential and growing production tends to be outside the OECD. So you got to balance growth prospects against safety.
I invest in small US e&p's with positive net and growing reserves. To sort, I try to extrapolate future net and compare with present EV,
reserves/ q production x q net/EV; the result should be at least 1.0; not many are.
Of US e&p's I have found 3 above 1; ard/gpor/gmxr
The first two are oils, the latter ng... imo the potential for increase in NA ng price is much higher than for world oil.
"imo the potential for increase in NA ng price is much higher than for world oil."
Many people agree with you that the odds of, say, a near-term 2X price increase is greater for NA nat gas than world oil. I don't know, but I am certainly not going to take the other side of your position.
Both oil & nat gas prices concern me. With my electricity mostly coming from NG, I have been one busy person lately: I've doubled my attic venting (all passive), added some radiant barrier stuff (if interested, see savenrg.com), and will soon add some solar shading on a few windows to reduce the a/c bill this summer. (If I install any more compact flourescents in the house, I think my wife will slug me.)
- Sonic
Which savenrg.com product did you use, the chips or the membrane?
I used something similar to the membrane: it's a major hassle to install (I got the stuff I used on an "inventory clearance sale"). The RB chips are FAR easier to install, but pricey. The TCM product, due to it being multi-layered, is not adversely affected by dust when placed over the attic insulation. Dust accumulation is not a major problem in my attic. Therefore, a single-layer, double-sided product (like the one I installed) installed over the insulation should perform well for many years -- at least I hope it will.
Best I can tell, dust problems are most prevalent for attics with powered gable fans: they seem to draw the dust in on one side of the house and deposit it along the way to exit fan. For these, the two savenrg products would work best.
The next house that I build (assuming it's in the South or Southwest) will be wrapped in the multi-layered TCM product. I also hope to avoid placing the a/c units & ducting in the attic. Homes with such setups (like my current home which I did not build/design) get a triple penalty from attic heat: the heat eventually seeps through the insulation, the insulation acts as a heat sink so that heat continues to radiate in after sundown, and the a/c ducts get super-heated. Just wonderful. When I moved into my current home, the attic would hit 120-130 when the outside air temp hit 100: that meant I was trying to get sub-80 degree air out of my a/c unit at a time when the ducts were 120-130. Surprise, surprise -- it took a very long time to get cool air out of ducts and into the house.
My experience (via electric bills normailized for avg temp) is that increased attic ventillation is a first order magnitude effect as is sealing the ducts for leaks: I lose less cool air due to leaks and have less of a temperature loss through the ducts since the ducts (& attic) are no longer 120-130 (just a chilly 110+!).
I found the radiant barrier to be a second order effect, but only if the attic is ventilated properly. RB installed over the insulation reduces the heat sink effect of the insulation by eliminating it from absorbing any radiant heat directly (it still gets heated by other means, hence the need for excellent ventilation to keep the attic relatively cool). A faculty member at Texas A&M has a study/note on RB placement -- something I'd like to quote right now, but can't seem to find. NOTE: In some cases, adding RB to a poorly ventilated attic can actually make the a/c bill worse, especially if the RB is installed up on the rafters.