“For those who think that oil will go to $200 per barrel, consider: coal to oil conversion”
You have to think in terms of EROEI(energy returned on energy invested). The coal to oil conversion is about 1.3/1. Which means you get about 1.3 barrels for 1 invested. Compare that to crude which is like 34/1 these days(used to be 100/1). Also, you need to factor in the time needed to get a plant up an running. Basically the influence on the price of crude will be negligible. Not that it won’t be done but it’s just a stupid option considering the enviromental damage it does and little influence on energy costs same goes for ethanol.
The variables that affect the price are the (de)valuation of the dollar,production levels(decline rates) and demand. All alternatives just don’t cut it in terms of EROEI.
Oil will be pushing mid to high $100s unless we have a full blown depression by the end of the year.
The larger questions you have to ask yourself is once we slip into rescession will we ever have enough energy to pull us out and how it will the lack of energy affect the infinate growth pardigm of our current economic model.
