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Crude Oil's Impact on US Consumers

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: Crude Oil's Impact on US Consumers

Unread postby TheDude » Mon 28 Feb 2011, 20:07:48

$this->bbcode_second_pass_quote('bratticus', '')$this->bbcode_second_pass_quote('TheDude', 'Y')ou're obviously not a fervent leftist. Nationalize the oil companies and have them refine product at a loss, and Bob's your Utopia. We can then spend the next decade in cheap motoring bliss while transitioning to wholly renewable sources. Sound like fun? Or a basic account of a round of some RTS computer game like Civilization.

You are missing the point. In order to have $220 oil you need businesses that can afford that price.

In 2008 businesses went into default at $120 oil. The loss of demand causes the price to fall.


I was being sarcastic. In these computer strategy games you can be an autocrat the likes of which the world has never seen; obviously we don't see that in reality, but you'd never know to listen to Al Gore and his 10 Year Plan for ridding ourselves of the curse of fossil fuels; or Rush Limbaugh and his blather about the US having twice the petroleum reserves of the rest of the world combined, to cite an example from either US political Wing. These two have millions of adepts who take these scenarios as gospel, as if market economies were just some inconvenience to handwave away. Or alternately, they have sources to back up any scheme. Same difference.

There's a lot of potential in carpooling, you would have grousing and occasional incidents with punchouts at first, then people would shrug their shoulders and carry on. Read up on how Iran is holding up at the moment - you have huge lines at stations but people persevere. It isn't the end of the world.

Of course the US is much more dependent on consumers having access to vehicles to tool around and spend $$$$ at brick-and-mortar shops, so it would have that much more impact on our economy to have sustained high prices or spot shortages. Also people would demand action this instant, if shortages appeared. This is the aspect of this matter that's very hard to predict in advance; so many were convinced that $200/bbl would become a new normal in 2008. Would that have been the case sans credit crisis? Did said crisis have a greater impact on petroleum demand than the high prices themselves?

Real peak oil - production reaching its asymptote and declining - will be a singular event, beyond which what will transpire is difficult to model, as there are many more variables at work than most suppose.
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Re: Crude Oil's Impact on US Consumers

Unread postby nocar » Wed 02 Mar 2011, 18:56:07

Beery,

I thought we were discussing the impact of gasoline at $7 per gallon, not the impact of no gasoline. If people carpool three in a car they get a lot more out of a gallon - obviously. It might be less convenient to carpool, because you have to coordinate, and probably go out of your way a bit, but you will still get there. Perhaps you do not effectively reduce to price to a third when riding three to a car, but you will certainly get down to half - $3.5, like today I believe.

Practically no gasoline at all - of course that is different. I believe we will arrive there eventually, but it will take decades, so there will be time to adjust. Expensive gasoline will drive adjustments in the right direction.

Actually, when WWII hit, Sweden got cut off from gasoline almost completely, very suddenly, but still could function with electric trains, trams and bicycles. Granted, this was before most people had cars anyway, but there were a fair number of buses and trucks in the 1930s, and private cars for the wealthy. Sweden was neutral all through the war so there was no general disruption of society - just practically no imports. By all accounts, the lack of coffee was more troublesome than the lack of gasoline. Both are equally impossible to produce domestically.

So a nation somewhat dependent on gasoline could adapt to a sudden no-gas situation.
I believe a nation very dependent on gasoline can adapt to a gradual, decade-long reduction of gasoline availability.
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Re: Crude Oil's Impact on US Consumers

Unread postby DoomersUnite » Wed 02 Mar 2011, 19:13:40

$this->bbcode_second_pass_quote('Beery', '')$this->bbcode_second_pass_quote('vision-master', '$')7 gal will kill the usa. All those millions of low wage service workers, yeah the ones who keep the machine oiled will be toast.


Realistically, it can never reach $7 per gallon.


Sure it can. Europeans already pay that price and don't seem to get all excited about it. Not sure I'd notice or care either, suburbia ROCKS!
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Re: Crude Oil's Impact on US Consumers

Unread postby Newfie » Wed 02 Mar 2011, 19:30:48

Well, then I guess my center city town house apartment will:

A. Skyrocket in price as folks rush into the city to be in walking distance of work.

B. Plummet as the economy crashes and everyone goes into unemployment and there is no need to come to a city without jobs.

???????
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Re: Crude Oil's Impact on US Consumers

Unread postby DoomersUnite » Wed 02 Mar 2011, 19:33:24

$this->bbcode_second_pass_quote('Newfie', 'W')ell, then I guess my center city town house apartment will:

A. Skyrocket in price as folks rush into the city to be in walking distance of work.

B. Plummet as the economy crashes and everyone goes into unemployment and there is no need to come to a city without jobs.

???????


Sounds like your predictions of future economic conditions aren't any better than...oh....peakers in general? Wasn't the last Great Depression II supposed to be...the last Great Depression II?

How many years of NON Great Depression does it take for silly future economic collapse scenarios to stop popping up as though they are any more real now then back when peak oil happened?
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Re: Crude Oil's Impact on US Consumers

Unread postby Beery » Wed 02 Mar 2011, 19:57:16

$this->bbcode_second_pass_quote('nocar', 'B')eery,

I thought we were discussing the impact of gasoline at $7 per gallon, not the impact of no gasoline.


The thing you're not realizing is that $7 per gallon IS the equivalent of no gasoline. You seem to be assuming that the price will go up and it will just cost us twice as much as it does now. That's not how these things work. A price like that causes massive repercussions in every aspect of our lives. Again, you don't seem to remember the oil shock of 1973. It's not like we're all going to be able to say "Oh, the price of gas is terrible - oh well, fill her up".

At $7 we will be deep in the second great depression, and it will be far worse than the first. Heck, gasoline probably never will get to $7 because we're bound for crippling unemployment caused by massive supply problems even at $5 and $6. Sure, that will force the price down - but by then many of us still won't be able to afford to buy fuel at $3 or $4. Those who can afford to buy gasoline at mega-depression prices are the rich - and with the state of supply, they'll be lining up at gas stations that have no gasoline. Pretty much everyone else who still has a job will have to cycle to work because the electricity grid will be out of action much of the time (because of increased demand caused by millions of people switching to cheap and inefficient electric heaters), so electric cars won't charge, electric trains won't run and diesel trains and subways will be so unreliable that they'll essentially be at a standstill.

And you can't seriously compare Sweden in 1940 to the US in 2011. Most people in Sweden in 1940 had no central heating, walked everywhere or used draft animals and bicycles for transport, and used animal poop for fertilizer, just like all the European nations did. The US in 2011 has a populace addicted to luxury, an electricity grid that's already stretched to breaking point, no excess power capability, many homes are heated by oil, transport is virtually all oil-based, and fertilizer, insecticide, food packaging are all made from oil. To suggest that we're just going to suck it up and magically power our world is, frankly, ludicrous.

And even in the unlikely event that all this doesn't happen, $7 means nearly $100 to fill up a gas tank in a country where it takes minimum wage earners two days of full-time work to earn that much - and many of those minimum wage-earners are only given part-time jobs so the employer can avoid giving benefits. If you think a suburban minimum wage earner is just going to go on as usual and keep his car fueled when it costs him a week's wages to do so (even with that cost cut in half or by two thirds by using a car pool), you're dreaming.
Last edited by Beery on Wed 02 Mar 2011, 20:36:33, edited 5 times in total.
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Re: Crude Oil's Impact on US Consumers

Unread postby peripato » Wed 02 Mar 2011, 20:01:14

The rising price of oil is clearly making the banksters nervous. As petrol climbs above the $3 to $3.50 mark, discretionary spending amongst Americans begins to grind to a halt. Now, if crude remains high for a prolonged length of time we will doubtless see petrol prices in the U.S. at, or above $4. Prices at this level will absolutely kick the crap out of an economy heavily reliant on car dependent suburbanites. Won't need to get to $7 before you hear the death rattle.
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Re: Crude Oil's Impact on US Consumers

Unread postby Beery » Wed 02 Mar 2011, 20:05:11

$this->bbcode_second_pass_quote('DoomersUnite', '')$this->bbcode_second_pass_quote('Beery', '')$this->bbcode_second_pass_quote('vision-master', '$')7 gal will kill the usa. All those millions of low wage service workers, yeah the ones who keep the machine oiled will be toast.


Realistically, it can never reach $7 per gallon.


Sure it can. Europeans already pay that price and don't seem to get all excited about it. Not sure I'd notice or care either, suburbia ROCKS!


At $4 per gallon, the US was plunged into the worst recession since the Great Depression. I've lived 20 years in Europe and 20 years in the US and I can assure you, the USA is nothing like Europe. Unlike European governments, the US government has not spent decades with a gas tax that ensures that the economy can run at elevated gas prices. We don't have the cushion that European countries have built and maintained for just this emergency.
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Re: Crude Oil's Impact on US Consumers

Unread postby DoomersUnite » Wed 02 Mar 2011, 22:58:01

$this->bbcode_second_pass_quote('Beery', '')$this->bbcode_second_pass_quote('DoomersUnite', '')$this->bbcode_second_pass_quote('Beery', '')$this->bbcode_second_pass_quote('vision-master', '$')7 gal will kill the usa. All those millions of low wage service workers, yeah the ones who keep the machine oiled will be toast.


Realistically, it can never reach $7 per gallon.


Sure it can. Europeans already pay that price and don't seem to get all excited about it. Not sure I'd notice or care either, suburbia ROCKS!


At $4 per gallon, the US was plunged into the worst recession since the Great Depression.


Horse puckey. The recession started 6 months before the price ever hit $4/gal. Matter of fact, the recession started right before oil hit $100/bbl, if I recall the timing correctly.

OMG!! WE MUST BE IN A RECESSION!

Not.

While I realize the "peak-centric" theory of finance and recession is popular, that only makes it popular, it doesn't make it right.

$this->bbcode_second_pass_quote('Beery', '
')I've lived 20 years in Europe and 20 years in the US and I can assure you, the USA is nothing like Europe.


True. They do quite well on expensive gasoline, demonstrating that so can we. Duh.

$this->bbcode_second_pass_quote('Beery', '
') Unlike European governments, the US government has not spent decades with a gas tax that ensures that the economy can run at elevated gas prices. We don't have the cushion that European countries have built and maintained for just this emergency.

What cushion? They haven't lowered gas prices to American levels to speed up their economies have they? I didn't think so. The Europeans can no more give up that tax revenue than Americans will give up their guns, beer, religion, obesity, or desire to motor around on a Saturday night and show off to their friends in their cars, even if those cars are no lower powered by gasoline. Hows that for throwing a monkey wrench into the fuel tax advocates!
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