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If wind and solar were uneconomic when oil was $100 a barrel, they are wildly uneconomic now
A decade ago, Houston investment banker Matt Simmons (since deceased) received a too-respectful hearing from a bunch of Harvard alumni in Toronto for his theories about “peak oil.” His take, outlined in his book “Twilight in the Desert,” was that the Saudis, the world’s largest producers, had been lying about their reserves, which were on the point of catastrophic decline.
He predicted oil prices would hit $200 a barrel by 2010 (all prices in US$). His “solution” was Soviet levels of control of people’s lives. Simmons confirmed that peaksters neither understand nor like markets, which he described as a “500-pound wrecking ball.”
Canada acquired its own peak fanatic in the shape of Jeff Rubin, sometime chief economist at CIBC, who provided further proof that anti-consumerist moralism could quickly drain all traces of Economics 101 from even a professional’s noggin.
In the fall of 2007, Rubin predicted $100-per-barrel oil, and sure enough, oil soon hit $100. In January of 2008 he was predicting $150 oil within five years. It almost reached that level within a few months. On a roll, he predicted oil at $200 by 2012.
Given Rubin’s prediction record, it takes some gall to suggest, as he did this week in a jointly authored article with David Suzuki (who once described economics as a form of brain damage), that Stephen Harper had been guilty of overestimating the potential of the oil sands, and was thus personally responsible for the Alberta boom that has now gone into very sharp reverse.
“For almost a decade,” declare Rubin and Suzuki, “Canadians have been told massive expansion of Alberta’s oil sands would be the engine of economic growth as the country rode a wave of soaring oil prices during the government’s early years.”
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