Conversation on Terry Tao's Buzz

Robert Smart - This is an aspect of Jevon's Paradox. We need to look at the total picture: tax on light bulbs (or electricity or carbon) means less tax on something else which provides money that will use energy when spent. Energy and production are closely linked (including embodied energy of imported goods). The core question is: Does the government want to reduce energy use or move energy use to a different source? If the latter, then renewables will not do the job. Another mathematician (Prof David MacKay) wrote a book (Sustainable Energy: Without the Hot Air -- free on web). I read early versions where Nuclear was classed as unsustainable, but in the final version it is one of the options and actually it is hard to get the sums to add up without it.
By the way, as I pointed out to John Baez, one of the problems we have in addressing all these questions is that there are no good models of the economy. A good model would have to understand the flows of some funny things like people and sentiment. It would have to deal with money in a sophisticated way since it is peculiar stuff (because governments can and do print it, and maybe unprint it).

Edward Mehrez - @Willie: ....deleted...

@Robert: Jevon's paradox is a great observation, much of the policies enacted by the government tend to have limited scope and thus only fix problems that arise in a partial equilibrium framework whereas Jevon's paradox extends the analysis to other markets in which the government participates through it's expenditures of its tax income and thus considers a more general equilibrium framework. However, whether or not the government will use the income to purchase or manufacture goods that expend as much, if not more, energy than the energy use that was taxed is unclear to me. In a perfect information setting where the government is perfectly informed as to the utilities of all generations and considers the welfare implications of the externalizes on all generations (perhaps discounting future generations to some extent), Jevon's paradox does not occur; but, the real world is a different story...9:00 am

Robert Smart - Edward: Consider another law, Lieberg's Law of the Minimum. That says that the currency of life is whatever is in short supply. Now consider our situation. Before the Industrial Revolution energy was in short supply and wages were driven to the floor (leading to large wealth disparity). Since then the thing in short supply has been skill-weighted workers. So we've seen the rise of the middle class and energy prices have been driven to the floor. Now we are temporarily back to energy being in short supply. Don't believe me? Look at what happens to the price of oil whenever there is a hint of economic recovery. That means that Lieberg's law applies and money is energy. Suppose that the government gives everybody free haircuts. Not much energy in that right? But the barber has money to spend then, and everyone has more money because haircuts were free. And if you follow the cycles and the epicycles and the epiepicycles of that you'll get to energy. Well we'd have more confidence in that if we had a good model of the economy.
Does Terry mind us having a private conversation under his buzz? Apologies if so.10:10 am

Rethinking Peak Oil

The concerns about Peak Oil are often exaggerated. I've been guilty myself. The reason is that oil has two important characteristics, and it is easy to get confused.

The most immediate characteristic is as a source of energy. However once the price of oil gets above a certain level then we stop using oil just for energy. The first step in this process was when people stopped using oil for electric power generation, which happened 40 years ago. The next step, which is happening rapidly in North America, is that people stop using heating oil to heat their houses in winter. We are not running out of energy. Indeed it seems certain that we will get Nuclear Power working and producing cheap electricity well before there is any shortage of coal or natural gas. Claims that we might run out of Uranium are silly: it is precisely because there is so much cheap Uranium that we can't get more modern reactors up and running that would use much more of the nuclear fuel and leave much less residue.

The 2nd characteristic of oil is as an energy carrier. Liquid hydrocarbons are the ideal fuel for transport. And we have an enormous infrastructure using that. But the oil price has already disengaged from the price of energy. Natural gas is cheaper, electricity is cheaper if it doesn't come from silly renewable sources.

So Peak Oil folk talk about oil's declining EROEI: Energy Return on Energy Invested. We can see that EROEI is declining markedly. But this is now irrelevant. Oil is no longer being used mainly as an energy source. It is being used mainly as an energy transporter. The Peak Oil folk are quick to rubbish "The Hydrogen Economy". Hydrogen is not an energy source at all, and it is easy to see that it is a very silly energy transporter. Time to wake up and rethink oil as energy transport, and stop worrying about its EROEI.

Once we stop worrying about its EROEI, we can see that it doesn't matter if Canadian tar sands or very heavy oil requires a lot of energy to extract. We could even make oil out of thin air, using algae for example. The EROEI no longer matters.

This is not to say that we aren't going to have a nasty decade or two. At the end the successful countries will be the ones that make Nuclear Power work. Certainly India and China agree on that point.

Response to Google/Verizon fair Internet proposal

When there is congestion there has to be some algorithm to determine whose packets get dropped. There isn't any obvious "fair" way to do this. How about: Each source (/destination?) company gets equal throughput? That could be fair. The way to build a fair Internet that innovates is to have per packet (and/or byte) charging on each transit network, paid by either source or destination or some combination. Endpoints need to specify routes and need to ensure that intermediate networks have credit for packets matching the spec. For individuals and smaller organizations ISPs would handle this for customers. This is tough but doable. (Transit networks might charge based on sampled rather than all traffic). Update: To be more explicit. The idea of fairness they are pushing is that when you can't fit packets down the output link then packets are dropped at random. This strongly favours those (like google) with a big pipe leading to/from the point of contention. Another fairness scheme is to give all streams equal weight (assuming streams can be identified at all). This encourages people to break work into multiple streams, and this has been happening for a long time. To repeat: any scheme other than per packet charging will invite contrived workarounds and hit the small honest players.

Technology Summary for cheap electricity

LFTR is a research project. There are projects with funding that are also very promising for cheap safe nuclear energy. The ones I like are: (1) accelerator based nuclear power which generates neutrons externally (with a linear accelerator) and so doesn't need refined and bomb-useful nuclear fuel; and (2) fusion using a self-organizing tight plasma beam (like gamma ray bursts come from a chaotic situation leading to a self-organized beam). But existing nuclear power is cheap enough to do the job, and we should get on with that ASAP (and obviously lots of people are trying to make that happen and a different lot are resisting). Even if we have cheap electricity all our infrastructure is wrong for that, though with cheap enough energy you can make liquid fuel. We're in for a nasty decade at the best, however most expenditure in Western countries is postponeable, and the trick is to leverage that without causing mass unemployment.