Thermodynamics - the branch of physics concerned with the conversion of different forms of energy.
Entropy - a thermodynamic quantity representing the amount of energy in a system that is no longer available for doing mechanical work.
Let me admit from the start that I am a dunce where money is concerned. Many of the finer points of economics are just arcane mysteries to me. Maybe that is a serious handicap. Maybe not.
Trying to make sense of fuel supplies by observing market forces is tricky. Obviously there are people who profit from rising oil prices and those who profit by price instability. It's like trying to get the ants off a carcass, to see how much flesh remains.
Let's stick with the simple physical things that we think we know. We think we may have used the "easy half" of the world's endowment of oil. In the best mining tradition, we have preferentially consumed the better grades of oil, as that is where the greatest energy profit may be had. But even the better quality oil deposits tend to yield their lighter fractions first, leaving the heavier, energy-lean residues to be scavenged later.
We know that the abundant poorer grades of oil contain less energy and more dross (tar sand is an extreme example). We know that they require more energy to be consumed in extraction and processing, to produce the gasoline and diesel we need. So dwindling oil quality is double jeopardy for the production of the desired article. By slow degrees, MORE energy must be sacrificed to liberate ever LESS contained energy.
No matter that we have enjoyed a plenitude of easy gasoline and diesel, that wonderful resource was never more than the "spare" energy left over after extraction, transport and processing.
It follows that as the remaining oil quality decreases, the supply of crude oil and the scale and pace of refining must increase for a steady amount of fuel produced. Yet producers are experiencing this phenomenon during a period of increasing fuel demand.
Now add the tyrannies of distance and depth to reach unexploited oil deposits.
Add the costly investment, relative to the yield of smaller oil deposits.
Then to make things really confusing, realise that it is oil energy which sets the value of money (especially the US dollar), not the other way around.
For example, if we wish to boost nuclear power in the teeth of dwindling liquid fuel supplies, we will discover that the "cost" of plant, mining, processing and other infrastructure will become uncomfortably high by present expectations. The more we try (and the more gasoline and diesel we burn in the process) the higher will go the "price" of the essential ingredients. It will be like chasing our own shadows. The same effect will plague the remnants of the oil industry itself.
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