By Rauli Partanen, Harri Paloheimo and Heikki Waris

250 pp. Routledge – Oct. 2014. $59.95.

Toward the end of this book, its authors make an astute, if self-deprecating, observation about its potential merits. They’ve been discussing how innate human biases cause us to make cognitive errors when trying to make sense of world crises. They’ve described in particular the tendency of scientifically knowledgeable people to become less convinced about climate change the more evidence they encounter for it, due to confirmation bias. For the authors, this fact “raises the question of how meaningful writing this book has actually been.” Won’t skeptical readers simply cherry-pick the data that support their views and reject the rest? While it is, of course, correct that some readers will do this, there’s no question that writing the book has been meaningful. Indeed, in this era of unprecedented challenge, few things could be more meaningful than accurate knowledge such as this book contains, together with the will to act on that knowledge.

Written by Finnish energy analysts Rauli Partanen, Harri Paloheimo and Heikki Waris, The World After Cheap Oil offers an exhaustive, up-to-date dissection of the world oil situation. It looks at the issue from every angle, starting with the looming supply shock for which the world’s developed nations are tragically unprepared, and moving on to the concomitant crisis with Earth’s climate that our oil use has unleashed. It also supplies an in-depth assessment of alternative energy sources, as well as the science, geopolitics, psychology and economics vital to understanding our predicament. Unquestionably the book’s strongest points are its wealth of hard data, straightforward explanations and informative visual aids. Indeed, the authors aptly describe their purpose as providing “a thorough package of information” about the end of cheap oil.

But again, they’re somewhat defeatist about the endeavor of persuading others with this information. Their defeatism is grounded on sound psychological principles that explain why people too often forego rational thinking and decision-making. Among the mechanisms at work are confirmation bias (selecting only the evidence that supports one’s previous opinions), belief in authorities (so as to shift responsibility to someone else) and natural fallacy (the inability to distinguish between the way things are and the way we wish they were). What undergirds all these processes is the dreaded prospect of finding oneself with less, in the way of material means and comforts, than we have today. Most of us refuse to face this possibility, making resistance to changes in the status quo “easy and natural,” write the authors.

The first thing to grasp about our situation with oil, and the thing to which our psychology most blinds us, is that its rate of supply is about to dwindle irreversibly. This has profound implications for our modern way of life, since absolutely everything in today’s world depends on cheap, plentiful oil. The resources that have been touted as replacements are actually nothing of the kind—they possess none of oil’s energy density, portability or versatility. And anyway, if we were going to build an infrastructure capable of running on them, we would have had to begin decades ago, not now when the crisis is impending. The upshot of all this is that industrial society now finds itself in territory familiar to scholars of civilizational decline. To use a word that the authors observe is now forbidden in public discussion, the modern world faces collapse.

There are legions of vested interests, from oil companies to governments of oil-producing nations, that know the status quo is unsustainable but are determined to conceal this fact so they can profit as long as possible from current arrangements. The propaganda they spread is a case study in how to lie with statistics. To take the example of oil production figures, we’re led to believe that current global output is around 90 million barrels per day (mbpd), when it’s really only about 75 mbpd. The difference between these two numbers is made up largely of other liquid fuels that are anything but oil, like ethanol and biodiesel, but are lumped under the same heading anyway. Such statistical trickery, which this book exposes at length, allows people to claim that oil production hasn’t peaked but has steadily grown in recent years. In reality, it peaked 10 years ago, and rather than growing, has been dropping ever since.

Besides their creative accounting of oil production, the official reports also make omissions about the nature and quality of what’s being produced. Key to understanding these omissions is the concept of net energy, or energy returned on energy invested (EROEI), the difference between the energy content of each barrel of oil produced and the amount of energy that went into it. In 1930, U.S. oil had an EROEI of at least 100 to one (for every 100 barrels to reach consumers, only one barrel’s worth of energy had to be expended). By 2000, that ratio was in the 11- to 18-to-one range.¹ Much of the oil still underground has a lower-than-break-even EROEI, meaning it’s destined to remain undeveloped. In short, industrial society must sacrifice ever-greater amounts of its total energy to obtain ever-poorer-quality energy, a dilemma with ruinous implications. Peak oil author Richard Heinberg has called oil’s declining EROEI “one of the biggest underreported economic stories of our times.”²

With one deft chapter the book dispels the mess of proposed alternatives that we see paraded around whenever oil prices rise. The authors explain how most promoters of alternative energy schemes blithely ignore the physics that makes them nonviable, particularly the second law of thermodynamics, also known as entropy. Diffuse energy sources like sunlight can’t substitute for oil because they don’t represent “exergy,” or usable energy. The book also emphasizes another overlooked fact, which is that alternatives are utterly dependent on the oil they seek to replace. For example, the parts for solar panels and wind turbines are made either directly from oil, in the form of plastics, or from minerals whose mining, transport and processing take enormous quantities of oil. Due to the lack of energy literacy in our society, most people fail to consider such things, which, in the authors’ words, “makes it easy to offer people solutions based on nothing else than make-believe.”

One alternative to cheap conventional oil that has been much ballyhooed in recent years consists of oil and natural gas obtained through fracking in the United States. However, like everyone else who has bothered to investigate the facts regarding the fracking boom, the authors conclude that it will be short-lived. Nor do they see it being replicated to any meaningful extent in other areas of the globe where hydrocarbon-bearing shale exists. They direct those interested in the details behind this assessment to a 2013 Post Carbon Institute report titled “Drill, Baby, Drill: Can Unconventional Fuels Usher in a New Era of Energy Abundance?” Authored by geoscientist David Hughes, it looks at production data from more than 60,000 fracked wells in America, the largest sample ever examined. Hughes predicts a peak in U.S. shale gas production by the end of this decade. He also estimates that, at current prices and technology, only 5 to 10 percent of the world’s shale oil and gas endowment can actually be produced.³

A crucial concept visited throughout The World After Cheap Oil is that of the “energy trap.” It can be summarized thus. Once world oil production begins to decline and the resource goes from being abundant to scarce, the oil that would be needed to reduce society’s dependence on oil is no longer available. This is because, as noted earlier, alternative energy sources sorely depend on oil just for their current production, not to mention the massive build-outs required to make them the dominant fuels. In a world of scarce oil, every ounce of it we possess will have to meet essential needs before those of alternative energy. The trap will become ever more acute the further we move along the depletion curve, since the sacrifice required to invest in renewables will have to come out of an ever-shrinking pie.

Peak oil and climate change have long been competing issues seemingly incapable of understanding each other. Thus, it’s refreshing that the authors of this book fully appreciate both of these fundamental sides to the same coin. They’re well aware of key points in the peak oil argument that are lost on most climate change activists, chief among them the fact that we don’t really have the quantities of hydrocarbons required to bring about the worst climate impacts. Yet they’re equally aware that oil depletion won’t solve climate change. They know of the mounting evidence that catastrophic climate shifts may already be unavoidable. As for the likely interplay between peak oil and climate change in coming decades, they foresee an ongoing “wrestling match” between the two issues. Though we may undertake earnest efforts on the climate, they will be undermined whenever the economy suffers and we have to burn more fossil energy to restart economic activity.

In its assumptions and conclusions about our future prospects, this book is very much in line with the ideals of degrowth. Degrowth proponents advocate the wholesale downscaling of production and consumption across industrial nations. However, the present authors stress that much of this work will be done for us against our will. As oil supplies shrink, demand will contract, first among the poor and then among the middle class, eliminating scores of nonessential services and businesses in the process. Eventually even this demand destruction won’t be enough and we’ll see shortages and rationing. There will be respites in which economic activity will resume at a lower scale than before, but these in turn will bump up against new limits, causing further recessions. In an environment of such volatility, it will become ever more difficult to plan long term. It will also become increasingly hard to invest in more oil-efficient infrastructure.

Even within these limitations, however, we can do much to reduce our oil use in travel, transport, food production and social services, among many other areas, through community-scale initiatives. The book offers thoughtful discussions of numerous opportunities along these lines.

I can find only two flaws in this book: too little space spent on nuclear and a few glitches in the translation from the original edition’s Finnish text. The translation issues aren’t many and are mostly of the hairsplitting grammatical variety, but a couple of them interfere with clarity and meaning. One passage speaks of the risk to oil supply disruptions when it really means the risk of oil supply disruptions. Another says it would be advantageous to many parties “if the general oil efficiency and consumption in the United States increased dramatically, closer to European levels.” We assume the authors mean “if the general oil efficiency increased and consumption decreased,” because the sentence doesn’t make sense otherwise. However, it isn’t entirely clear.

As for the skimpy treatment of nuclear energy, it can be seen mainly in a failure to bring up obvious implications of oil’s decline for nuclear’s future viability. For instance, nowhere does the book mention that global reserves of fissionable uranium would quickly deplete if we were to step up nuclear production to offset oil’s decline. In contrast, it does make this same point with regard to coal reserves in the event of a ramp-up in liquefied coal (CtL). Even so, this oversight is but a dent in the armor of an otherwise thoroughly comprehensive analysis.

There was much excitement about the original version of this book when it came out two years ago. It was shortlisted for Finland’s two most prestigious non-fiction book awards, Tieto-Finlandia and the Kanava Award.⁴  The authors were encouraged by this initial success and soon began work on the present, expanded edition. The result is a rich fount of information, wisdom and good advice from three sharp intellectuals who have studied the issues for years. They may despair of reaching a wide audience with such a starkly honest book, but I feel their despair is mistaken. Eventually enough people will wake up and demand real answers that this book will be guaranteed a considerable and engaged readership.

28 Comments on "The World After Cheap Oil"

Davy on Fri, 6th Feb 2015 6:38 am 



This was a good read and covered so many of the areas we have covered. I would love to get the book but for $60 bucks it is pricy for what I know is a review of all those topics we cover here. I would like to mention the title. This title will be deceptive to those who don’t understand POD ETP. They will not understand that oil price could be either high or low with the “The World after Cheap Oil”.

We have currently a demand destruction oil glut caused by a global mal-investment in high priced oil through a manipulated, repressed, and debt driven global central bank financial system. This central bank Ponzi scheme of debt purchases coupled with near zero percent rates has fueled speculation and yield seeking. This is not a normal price discovery market with normal fundamentals. The real economy and the speculative economy have bifurcated. The current situation today is a case of low oil prices from the end of cheap oil. The economy can’t afford the mal-investment of high price oil sources brought on by central bank QE so price dropped and supply is in a glut.

My friend here on this board the highly respected Short from Hills group would disagree with me on the next point I think. I am still trying to figure him out completely. My next point is expensive oil can damage demand that damages supply by shutting in supply and leaving other supply sources stranded with cancelled projects. This could lead to dollar price instability and lead to price spikes that could last longer than Short will like to acknowledge. This is because of the bifurcated global economic system. I will say this high prices will quickly damage further an already sick real economy. One other quick point the corns who tweet traditional econ 101 ideas of supply and demand are deceived by BAU haze of endless growth.

Since we have a two tier financial system and economy this supply destruction will cause the faux digital economy of flows of debt and foreign exchange carry trade to react to low supply with high prices. These higher prices I see likely going above the real thermodynamic value of oil strictly from market movement’s not physical utilization of that oil in the real economy governed by the laws of thermodynamics. Futures are a huge portion of the oil price mechanism but not real oil. Human nature at the high tier of the economy does not follow rational laws it is greed and fear driven. When Central banks can prime the system with artificial liquidity normal price discovery is not possible.

We don’t yet know if we are in a demand and supply spiral down of an ever descending economic relationship of oil and the economy i.e. my bumpy descent definition. Price will never recover much and demand will decline with the end of growth. Since this is a paradigm shift and an epochal change most here discount it. It is hard to think in this way because it has never happened.

Short has a point that long term and per the real physical economy oil has an economic value and the value is declining and has been declining per the ETP curve. POD and ETP have shown us from multiple angles the dynamics of depletion and the systematic disequilibrium of oil production and consumption as depletion occurs. This disequilibrium is thermodynamic with the physical and systematic with the abstract side of the economy. Long term the economy shrinks from the end of cheap oil because the economy can only utilize oil at a certain value per the laws of thermodynamics. The world is awash in hydrocarbon sources but the world has a scarcity of high value oil having used the bulk of that oil already.

rockman on Fri, 6th Feb 2015 6:46 am 



Maybe it’s because I’ve finally reached official “old fart” status but I’ve been developing a bad attitude about this “cheap oil” bullsh*t. There is no such thing as “cheap oil” and never has been IMHO. Even the concept of “affordable oil” is often misused. Oil is not cheap today when there are billions on this planet without the funds to utilize much of it. When oil fell below $20/bbl in the mid 80’s it wasn’t “cheap”: there were still billions of folks then who couldn’t afford very much of it. Just like today.

When I started in the oil patch in 1975 oil was $12/bbl…$54/bbl inflation adjusted. It was neither cheap nor expensive then but it was 2X the price it was just 2 years earlier. Both US oil and OPEC were as giddy as little girls. But the US oil patch was tempered by the fact that much of the oil left to develop required such a price. Throughout the 50’s and 60’s oil prices remained relatively stable in the $20 – $25 per bbl range thanks largely to the efforts of the Texas Rail Road Commission which controlled how much any oil well in the state could produce. IOW Texas was the oil cartel OPEC has always wished it could be. But this was during the period when US oil production continued to increase…until the early 70’s. Once it started to decline the TRRC didn’t need to restrict production rates to maintain higher oil prices…depletion and consumption growth took care of that. Since then the TRRC has allowed all Texas oil wells to produce at their max rate. And yes: the TRRC still has the authority to set that rate and does so on a monthly basis. The “allowable” has remained at 100% for the last 40+ years.

But oil prices eventually returned to the $20/bbl range in the 90’s. And why? Global oil production had fallen below the highs of the 70’s during the 80’s. But thanks to the international oil patch the global rate increased back above the 70’s level. And today the world is producing more oil than ever before. And consuming more oil than ever before. And at $50/bbl is more expensive than it has been for 18 of the last 28 years. And during many years selling for less than half that price.

Folks are free to characterize oil prices as they wish. But IMHO oil selling for as much or more than it has for 65% of the last 3 decades isn’t “cheap”.

Davy on Fri, 6th Feb 2015 7:14 am 



Rock, maybe the term cheap oil should be affordable oil. We must also consider oil is part of an economy and a system. It is that trinity that has recently come into disequilibrium. Limits of growth, diminishing returns, carrying capacity overshoot, and social failures have taken us to a point of a bumpy plateau. It appears to me and others this bumpy plateau has entered a descent. We see faux growth numbers for oil and the economy that do not jive with the systematic realities of a repressed and manipulated system.

We are in a surreal environment of manipulation, corruption, and disregard for normal. These normal are normal rule of law, normal market price discovery, and normal governmental fiscal policy. If the cornucopians with their econ 101 were right why do we need 10 years of this artificial price discovery environment with QE debt and repressed rates? Why did we even have a 08 near crash? Why do we have this bifurcated system of the markets and the physical main street? One engaged in wealth transfer and parasitic cannibalization of the public realm for individual profits. The other being bled to death.

These macro distortions are a global phenomenon also within nations and across nations. This situation with central bank policies of debt and rate manipulation signals global economic decline. Anyone here want to tell me we are in a healthy global growth environment? The corns here have an answer for my question. They say it doesn’t matter because the number say growth. Speaking of corns anyone heard from the NOo (Noony)? That is a pretty good sign things are not hunky dory.

Dredd on Fri, 6th Feb 2015 7:20 am 



“They’ve described in particular the tendency of scientifically knowledgeable people to become less convinced about climate change the more evidence they encounter for it, due to confirmation bias.”

“Scientifically knowledgeable people” is doublespeak.

“Scientists” would suffice, but would expose their Oil-Qaeda oriented bias, so they obfuscated the text.

The opposite reaction by scientists is more the norm: “CALL me a converted skeptic. Three years ago I identified problems in previous climate studies that, in my mind, threw doubt on the very existence of global warming. Last year, following an intensive research effort involving a dozen scientists, I concluded that global warming was real and that the prior estimates of the rate of warming were correct. I’m now going a step further: Humans are almost entirely the cause”

(The Conversion of a Climate-Change Skeptic).

What people should be afraid of is the current religious madness (The Baby Is Not The Bathwater; The Guilty Are Not The Victims) morphing into religious madness on steroids around the coming future stress (Global Warming / Climate Change Will Generate Dangerous Religion).

Makati1 on Fri, 6th Feb 2015 7:25 am 



As Rockman said, most of today’s billions still do not benefit from oil and never will. Oil has NEVER been priced at the level of it’s value, or it would have been thousands of dollars per barrel since the first gusher. Only the more wealthy few of this planet have been able to benefit from those low, low prices. Now it is their turn to do without. Love those boomerangs!

Makati1 on Fri, 6th Feb 2015 7:42 am 



Dredd, we never got beyond the superstitious need to have another to blame for our weaknesses. We are not much more advanced than the humans who huddled in caves at night to be relatively safe from the monsters outside.

The West is allowing a Police State to be created to protect them from the ‘terrorist monsters’ although the odds of being killed by a terrorist is about 1 in 3,000,000. You have an 800 times better chance of being killed in a car accident (1 in 8,000) than by a ‘terrorist’.

Science and education has not changed that for many of us. We want someone to put our trust in, i.e., depend on, to blame for our own weakness. ‘Mother Nature” is about to wipe the human experiment off the planet and replace it with another species that will carry on life until the planet is finally swallowed by the sun going nova in a few billion years. Who knows? Maybe she will also produce oil and coal again for the new experimental species. After all, it only takes a hundred million years or so.

sunweb on Fri, 6th Feb 2015 8:12 am 



Don’t know where the official “old fart” status begins but I am sure at almost 72, I am getting close. Rockman, I continue to appreciate your honesty and growing curmudgeonism.

In 2000 using an Excel spread sheet and using energy as a measure, I took all the countries of the world; got their population, petroleum use, natural gas use, and electricity use. I figured the per capita use for each of these energies for each country. I then rank order each of the per capita uses for each energy from the least to the most and then did a population accumulation so that I could ask what did 75 to 80% of the people use.

For petroleum 72% of the people in the world in the year 2000 had access to 4 barrels of oil or LESS each year. The United States that year had access per capita to 25 barrels of oil. The per capita use in many countries is misleading because the wealthy get the bulk of the energy. With electricity, 75% of the world population had access to 5kWh a day. And that again is misleading because the wealthy got the lion’s share.

I have done this multiple times since the 80s and the numbers have remain essentially the same. With scrapping the bottom of the petroleum barrel and the ongoing threat of climate change, the outlook is bleak initially for the poor.

eugene on Fri, 6th Feb 2015 9:15 am 



Careful here, we’re starting think/talk beyond the range of millions. You mean there is a world outside the US borders?
And thinking about them having energy? Radical!! The thought patrol will be on you doorstep.

Old man’s sarcasm aside, I agree. And, as always, appreciate you being Rockman.

dave thompson on Fri, 6th Feb 2015 10:23 am 



I am thinking that people are catching on and the 100th monkey tipping point is close at hand. I also still say the price of crude will ratchet back up to keep the system in balance (sort of) for the time being. TPTB know what is going on and want to keep the wheels turning for as long as possible. There is no profit in economic crash and monetary destruction.

rockman on Fri, 6th Feb 2015 11:11 am 



davy – “Rock, maybe the term cheap oil should be affordable oil. We must also consider oil is part of an economy and a system”. I think that has some merit if we restrict the conversation to the US. BUT: I periodically do volunteer work with folks who see $2 gasoline as very expensive. Same folks who occasionally have trouble coming up with bus fare. Me…I’m lucky: I can pay $5/gallon for the many thousands I drive every year and not give it a second thought.

So yeah…I’m becoming a little pissy with terms like “affordability” also. Unless we’re focusing on a particular person or group. For instance my owner can afford to pay $100/gallon without blinking an eye. In fact, both he and I would be thrilled to see that price on the pump: just imagine what we would be selling our oil for. LOL.

Perk Earl on Fri, 6th Feb 2015 11:28 am 



“In short, industrial society must sacrifice ever-greater amounts of its total energy to obtain ever-poorer-quality energy, a dilemma with ruinous implications.”

If someone gets what is being stated there, they understand the energy predicament. It’s real simple – declining EROEI. It’s not stationary, or rising, it’s declining and that has dire economic implications.

shortonoil on Fri, 6th Feb 2015 11:30 am 



My next point is expensive oil can damage demand that damages supply by shutting in supply and leaving other supply sources stranded with cancelled projects.

The term “cheap oil” is used without defining what is meant by cheap. It appears that what is generally implied is the cost per barrel. You can buy a lot of cheap stuff out of China; that is, it doesn’t cost much to purchase. It is also cheap because much of it is such low quality that it is almost useless. Cheap is a matter of relevance, and its price is only part of the definition.

So what is “cheap oil”? The Model A Ford gives a good example. The energy delivered from a barrel of oil in 1930 would have powered that fliver for 1,105 miles. By 2014 a barrel of oil would have powered it for only 507 miles. Oil in 1930 was around $2/barrel, today it is $50. Oil is definitely not as cheap today as it was in 1930 when you take into consideration the utility of the the product.

It is the declining utility of petroleum that is almost always ignored. To define “cheap”, or “expensive” is not merely a price quote; the utility of the product to the consumer must be taken into account. How many barrels of Bakken oil would it take to power that Model A Ford for 1,105 miles? Once that is known it becomes very clear that it is cheap oil. Cheap as in the last made in China hand drill I purchased. It drilled exactly one hole before it burned up!

Plantagenet on Fri, 6th Feb 2015 12:04 pm 



Its rather bad timing to have a book called “The World after Cheap Oil” come out just as oil prices are collapsing due to the oil glut.

Maybe they could retitle it “After the Oil Glut ends It Will be the World after Cheap Oil—-Trust Us”

GregT on Fri, 6th Feb 2015 12:27 pm 



“The West is allowing a Police State to be created to protect them from the ‘terrorist monsters’ although the odds of being killed by a terrorist is about 1 in 3,000,000. You have an 800 times better chance of being killed in a car accident (1 in 8,000) than by a ‘terrorist’.”

The Canadian Federal government is ramping up the ‘US Lead War On Terror” ( of course we must be careful not to infringe on civil liberties, there’s a fine line you know), and at the same time we are increasing speed limits on our roads. There have been more Canadians killed on our highways due to excessive speed in the last month, than all terrorist acts combined since our country’s existence.

Black is white, up is down, and out is the new in.

GregT on Fri, 6th Feb 2015 12:31 pm 



Please, no matter how hard it may be to resist, Do Not Feed The Troll.

He will eventually self destruct and retreat back into his lonely little cave.

Northwest Resident on Fri, 6th Feb 2015 12:58 pm 



GregT — Hey man, I don’t know if I can hold back. That is such a huge steaming stinking pile of STUPID that it is almost impossible to resist the urge to just blast it to smithereens. Problem with that, of course, is that then it flies everywhere leaving a stinking mess spread out over a larger distance. Gotta hold back… 🙂

GregT on Fri, 6th Feb 2015 1:41 pm 



There are few places where knowledgable and considerate people can get together and discuss the most pressing issues of our times. Overall, a great group of individuals frequent this board. We don’t always agree with each other, as it should be. There are many different views and perspectives presented here, and that is a very good thing. Hopefully each of us is able take away something of importance from the others.

We have enough to be concerned about in the big scheme of things, without some jack-ass sidetracking otherwise meaningful discussions, and reducing them to his level of ignorance and stupidity. I find it very sad that this particular individual is not able to receive the psychological help that he so desperately needs. I have come to the realization that it is pointless to continue on with any attempts at further discussion. All that we are accomplishing in doing so, is enabling the continuation of dysfunctional behaviour.

Please, DO NOT FEED THE TROLL.

indigoboy on Fri, 6th Feb 2015 2:12 pm 



When you are discussing whether fuel is ‘cheap’ or ‘affordable’, you surely need to qualify it with, what you intend to use it for.?
I know someone who runs a small firm that manufactures Upvc window replacement systems. He will fill his Range Rover at *any price* to take his family to his holiday home at weekends. But when it comes to his business, he knows full well that there is a limit on fuel costs that will impinge severely on his profits. At a certain price point, he will not be able to make and sell those Upvc windows, despite the fact that he could (at a personal level), afford a doubling or tripling of the fuel price.
So when we look at what the *end consumer* can/will afford, we must qualify that with *which consumer*? A business consumer may have a much lower threshold, that a leisure consumer.

Plantagenet on Fri, 6th Feb 2015 2:26 pm 



Gasoline is cheap right now because of the oil glut. Prices have come down by ca. 40%. You can fill up your motorcycle, SUV, pick-up, Prius or RV at prices below $2 bucks a gallon across much of the US.

Nonetheless some businesses or individuals may still be unable to afford all the gasoline they want, even at the current cheap price.

GregT on Fri, 6th Feb 2015 2:37 pm 



indigo,

The real problem is one of economies of scale. When your acquaintance’s business is no longer viable due to high energy costs, where does he get money from to afford to fill his range rover ‘at any price’? If his business is no longer profitable, chances are that many other businesses are also no longer profitable. All of those people that were employed in those businesses are out of work, which in turn affects other businesses. A domino effect.

So where is your aquaintance’s ‘wealth’ tied up? In the markets? In dollar bills? In real-estate? In gold? What are any of those things really worth if the economy goes for a shitter? And where does the investment capital come from to keep the oil flowing at a fast enough rate to meet demand? When the line ups and shortages finally do occur, does he have his own private oil company and gas stations, or does he simply get to go to the front of the line because he can afford to pay more than all of the other people?

Solarity on Fri, 6th Feb 2015 4:58 pm 



The world does not ‘have the quantities of hydrocarbons required to bring about the worst climate impacts.‘ IOW Global warming (climate change) and Peak Oil are mutually exclusive problems: the world cannot be faced with both scenarios. The world will run short of fossil fuel before its use causes significantly negative environmental problems.

indigoboy on Fri, 6th Feb 2015 5:25 pm 



GregT
I fully understand the point you are making, in that if his business is ‘going under’, then despite his willingness to pay a high price to fill his Range Rover, for leisure purposes, he is nonetheless, living on borrowed time (and money).
My point is however, that the words consumer,.. affordable,.. and cheap, are relative. It matters, what I intend to use that fuel for, in determining the price I am willing, and able, to pay.

GregT on Fri, 6th Feb 2015 6:21 pm 



indigo,

Pont taken.

GregT on Fri, 6th Feb 2015 6:33 pm 



“The world will run short of fossil fuel before its use causes significantly negative environmental problems.”

Not sure what world you are living on Solarity, but on the planet Earth, fossil fuels have already caused severe negative environmental problems. So much so that our scientists are now calling the era of the human caused sixth mass extinction event, the Anthropocene.

You really should pay a little more attention to what is going on around you, unless you really do live on a different world?

redpill on Fri, 6th Feb 2015 7:16 pm 



Solarity, it sounds like your talking not just about peak fossil fuels but actually running out.

What timeframe are you thinking this will happen? And are you including coal in your thinking?

Davy on Fri, 6th Feb 2015 8:05 pm 



Unfortunately the fossil fuel decline will likely result in a desperate attempt by a population faced with a collapse from the loss of its highest order energy source. FF have destroyed but they also allowed the conservation of other environmental assets. Once oil has decline to a point environmental destruction will turn to new areas. Since oil is such a dense source of energy these substitutions (in reverse) will be dirty and damaging. How about that econ 101 cornies reverse substitution. I bet you never learned that in econ class.

R1verat on Sat, 7th Feb 2015 12:04 am 



Short wrote~
“So what is “cheap oil”? The Model A Ford gives a good example. The energy delivered from a barrel of oil in 1930 would have powered that fliver for 1,105 miles. By 2014 a barrel of oil would have powered it for only 507 miles. Oil in 1930 was around $2/barrel, today it is $50. Oil is definitely not as cheap today as it was in 1930 when you take into consideration the utility of the the product.

It is the declining utility of petroleum that is almost always ignored.”

You nailed it!

fred1 on Sat, 7th Feb 2015 4:45 am 



over the last few years I have never read any of that troll called plant comments I had a feeling he had vested interested in the shale/gas industry so finally you all have enough of the S.O.B and don’t reply to any of his stupid remarks