There are serious limits to the comparison to the shale boom. Notably, there were contractual reasons why companies had to drill when acquiring land rights. The land grab drove excess capacity which drove down price. There is limited demand elasticity for natural gas. The weather is the weather and utilities contract for price anyway. Again, limited value in the comparison.
Your piece captures the Jevons dynamic beautifully—how efficiency fuels demand, not restraint. It’s a reminder that technology doesn’t just scale output; it rewrites appetites.
If I could add one small angle: Jevons isn’t fate. We can control our destiny—that’s the role of democratic governance. The Industrial Revolution made energy production more efficient and cheaper, and consumption exploded—classic Jevons. By 1900, London’s coal-fueled “pea-soupers” were already a chronic public-health disaster, with thousands dying each year from respiratory disease. Efficiency wasn’t the problem; scaling the wrong architecture was.
We didn’t stop burning—we learned to measure, regulate, and optimize it. Efficiency became disciplined rather than explosive. AI now needs that same evolution. Token throughput is the new BTU. We’ll get more power from it when we treat meaning, data, and inference as measurable commodities—auditable, standardized, reusable—rather than endless fuel to burn.
There are serious limits to the comparison to the shale boom. Notably, there were contractual reasons why companies had to drill when acquiring land rights. The land grab drove excess capacity which drove down price. There is limited demand elasticity for natural gas. The weather is the weather and utilities contract for price anyway. Again, limited value in the comparison.
Brilliant. My book collectin is Jevons in action.
Everyone’s trying to decide whether AI is the new oil or the new shale. It’s neither. It’s cognition priced like corn.
Efficiency industrializes it and lowers the marginal cost of pretending to think.
Your piece captures the Jevons dynamic beautifully—how efficiency fuels demand, not restraint. It’s a reminder that technology doesn’t just scale output; it rewrites appetites.
If I could add one small angle: Jevons isn’t fate. We can control our destiny—that’s the role of democratic governance. The Industrial Revolution made energy production more efficient and cheaper, and consumption exploded—classic Jevons. By 1900, London’s coal-fueled “pea-soupers” were already a chronic public-health disaster, with thousands dying each year from respiratory disease. Efficiency wasn’t the problem; scaling the wrong architecture was.
We didn’t stop burning—we learned to measure, regulate, and optimize it. Efficiency became disciplined rather than explosive. AI now needs that same evolution. Token throughput is the new BTU. We’ll get more power from it when we treat meaning, data, and inference as measurable commodities—auditable, standardized, reusable—rather than endless fuel to burn.
Thanks for grounding the debate in real numbers.
This is super interesting. Why are a16z graphs and images so blurry? Seems like they were extremely compressed