Economic peak oil explained.... - Fuel Economy, Hypermiling, EcoModding News and Forum

suspectnumber961 · 10-16-2011, 07:15 PM

Peak oil has arrived......??

The Oil Drum | A Brief Economic Explanation of Peak Oil

"For a number of years there has been an arid debate between economists and geologists about Peak Oil. The geologists maintain that Peak Oil (maximal production) is a geological imperative imposed because reserves are finite even if their exact magnitude is not, and cannot be, known.

In contrast many economists maintain prices will resolve any sustained supply shortfalls by providing incentives to develop more expensive sources or substitutes. The more sanguine economists do concede that the adaptation may be slow, uncomfortable and economically disruptive.

The reality, I believe, is that both groups have part of the answer but that Peak Oil is, in fact, a complex but largely an economically driven phenomenon that is caused because the point is reached when: The cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time. While hard to definitively prove, there is considerable circumstantial evidence that there is an oil price economies cannot afford without severe negative impacts.

The corollary is that if oil prices fall back to and sustain levels that do not inhibit growth, then economic growth will resume, with both recoveries and downturns lagging oil price changes by 1-6 months."

Oil prices and recessions...a NEW recession underway now.....who knew?

Well you know now....

"The conclusion appears to be that:

Unless and until adaptive responses are large and fast enough to constrain the upward trend of oil prices, the primary adaptive response will be periodic economic crashes of a magnitude that depresses oil consumption and oil prices. These have the effect of shifting consumption from incumbent consumers—the advanced economies—to the new consumers in the developing economies.

This is exactly what happened in the last recession when between the start of the recession in January 2007 and its effective end in 1Q 2011 demand rose by 4.3 million b/d in the non-OECD area and fell by 4 million b/d in the OECD area."

tru · 10-16-2011, 07:20 PM

meh, the recession never truly ended. it was simply propped up by an artificial money supply aka stimulus. The stimulus was a failure and we are getting back to where the economy would/should be.

Frank Lee · 10-16-2011, 08:14 PM

People and govts are going to have to get over this growth obsession SOMEDAY- they can do it voluntarily or have nature do it for them.

Peter7307 · 10-16-2011, 08:15 PM

This whole concept of "peak" Oil , water , coal or whatever seems fairly pointless to me.

We live on a planet with a limit volume of resources and an increasing population and the sooner we start recognising that and acting accordingly the easier the transition away from oil based fossil fuels will be.

Ecomodders are a part of that ; even if the rest of the driving community isn't.

Peter.

Frank Lee · 10-16-2011, 08:16 PM

I think the concept of "peak" whatever could and should be useful as a wake-up call, if the majority were conscious enough to comprehend it.

Ladogaboy · 10-16-2011, 08:19 PM

Quote:

Originally Posted by tru

meh, the recession never truly ended. it was simply propped up by an artificial money supply aka stimulus. The stimulus was a failure and we are getting back to where the economy would/should be.

I've been logging the "recession ended" crap under the same file as the "high fructose corn syrup is as good for you as honey" bit.

Old Mechanic · 10-16-2011, 08:50 PM

The amount of recoverable oil left on the planet is not the real issue.

The real issue is our pitiful designs that allow us to continue to waste 80% of the energy content of each gallon of fuel we consume. It's especially pitiful when we have the capability to decrease that waste to 60% fairly easily and in a short period of time. Even as poor as 60% waste would double our average MPG, something demonstrated by many here daily.

While the successful implementation of truly revolutionary vehicle designs seems to be far in the future, the reality is there are many who will resist any dramatic change, out of fear that they would loose their economic security. Such short sightedness is always very harmful, and in the long run the "if man was meant to fly he would have wings" mentality will possibly destroy this planet.

I am not a "Greenatic" by the longest stretch of the imagination you could ever imagine.

I just despise waste.

regards
Mech

Frank Lee · 10-16-2011, 09:47 PM

Quote:

I am not a "Greenatic" by the longest stretch of the imagination you could ever imagine.

I just despise waste.

What's the difference?

suspectnumber961 · 10-17-2011, 06:22 AM

Debt and growth go hand in hand (debt finances growth and growth covers debt?)...with cheap energy supporting both? Reality (resource depletion) bites and says...enough? (It's a feedback mechanism.) Reactionaries want to keep doing the SOS...trashing the planet and probably enslaving everyone in the process.

A new recession has been called by 2 sources I consider fairly trustworthy...at least 2 sets of indicators say so. Basically it's been a new kind of depression as modified by the Fed? Pattern is similar to the first one...we start to come out of it...then "austerity" measures hit and the party grinds to a halt again?

Arragonis · 10-17-2011, 07:14 AM

I'm neutral on the argument about when / if Peak Oil (or Peak Energy or Peak Resources if you prefer) will or may hit.

I'm not convinced that the current recession is evidence of the continual economic decline often predicted as a result of the Peak, it seems to be more the conventional debt-fuelled investment bubble which has burst, the only difference here seems to be the scale.

Quote:

Originally Posted by Frank Lee

People and govts are going to have to get over this growth obsession SOMEDAY- they can do it voluntarily or have nature do it for them.

We have discussed this previously, and I disagree that the limit has been reached. But (genuine question, not being argumentative) what alternative system would you see being used when/if that happens, or indeed to mitigate for the effects ?

Quote:

Originally Posted by suspectnumber961

Debt and growth go hand in hand (debt finances growth and growth covers debt?)...with cheap energy supporting both? Reality (resource depletion) bites and says...enough? (It's a feedback mechanism.) Reactionaries want to keep doing the SOS...trashing the planet and probably enslaving everyone in the process.

A new recession has been called by 2 sources I consider fairly trustworthy...at least 2 sets of indicators say so. Basically it's been a new kind of depression as modified by the Fed? Pattern is similar to the first one...we start to come out of it...then "austerity" measures hit and the party grinds to a halt again?

We had "boom and bust" in the era of cheap energy, say between WW2 and the early 1970s. The scale was perhaps smaller but it did happen. The "economic genius" who was our last prime minister said he had got rid of B&B...