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Peak oil=Swimming up stream, not the end of the world.

Discussions about the economic and financial ramifications of PEAK OIL
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Postby MonteQuest » Sat 16 Apr 2005, 21:44:25

$this->bbcode_second_pass_quote('spot5050', ' ')I think Antimatter has the same problem with Jevons' Paradox that I do, ie. Jevons does not apply to a world of decreasing supply. Monte you are ignoring 'price' in your equation.


Ok, in the future will high prices cause you to use less energy?

If your answer is yes, if the price goes down as a result, will you still use less?
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Postby spot5050 » Sat 16 Apr 2005, 21:49:37

$this->bbcode_second_pass_quote('MonteQuest', 'O')k, in the future will high prices cause you to use less energy?
If your answer is yes, if the price goes down as a result, will you still use less?

MQ! That's exactly the point. If you use less the price should go down, but it doesn't because supply is decreasing faster.
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Postby MonteQuest » Sat 16 Apr 2005, 21:58:25

$this->bbcode_second_pass_quote('spot5050', '')$this->bbcode_second_pass_quote('MonteQuest', 'O')k, in the future will high prices cause you to use less energy?
If your answer is yes, if the price goes down as a result, will you still use less?

MQ! That's exactly the point. If you use less the price should go down, but it doesn't because supply is decreasing faster.


This assumes that demand will always outstrip supply. If it doesn't, will people still use less when the price comes down due to demand destruction or increases in efficiency? Doubt it.

And you didn't answer my questions.
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Postby spot5050 » Sat 16 Apr 2005, 22:20:04

$this->bbcode_second_pass_quote('jato', '')$this->bbcode_second_pass_quote('', 'I')'m a visual person too jato. Have you got a graph for -0.1%, or dare I say it, +0.1%?


I don't follow...I have never heard of a %0.1 decline curve...do you mean for a few years during the "plateau" phase at the top of the oil curve?

The USGS publish charts for various projections of growth. Those charts iluminate the point they are trying to make very well, but the question is; is their point valid?

A chart does not proove a point. It merely illustrates an argument.

jato are you offering up those charts as proof of your assertion that we will get poorer by between 2% and 10% pa?
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Postby spot5050 » Sat 16 Apr 2005, 22:22:31

$this->bbcode_second_pass_quote('MonteQuest', 'A')nd you didn't answer my questions.

Sorry which ones.
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Postby MonteQuest » Sat 16 Apr 2005, 22:32:05

$this->bbcode_second_pass_quote('spot5050', '')$this->bbcode_second_pass_quote('MonteQuest', 'A')nd you didn't answer my questions.

Sorry which ones.


These:

$this->bbcode_second_pass_quote('', 'O')k, in the future will high prices cause you to use less energy?
If your answer is yes, if the price goes down as a result, will you still use less?
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Postby spot5050 » Sat 16 Apr 2005, 22:43:10

$this->bbcode_second_pass_quote('MonteQuest', 'O')k, in the future will high prices cause you to use less energy?

Yes. You?
$this->bbcode_second_pass_quote('MonteQuest', '.')..if the price goes down as a result, will you still use less?

Nope. You?
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Postby spot5050 » Sat 16 Apr 2005, 22:46:03

Monte, Jevons' Paradox does not apply in world of decreasing supply.
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Postby MonteQuest » Sun 17 Apr 2005, 00:27:47

$this->bbcode_second_pass_quote('spot5050', '')$this->bbcode_second_pass_quote('MonteQuest', 'O')k, in the future will high prices cause you to use less energy?

Yes. You?
$this->bbcode_second_pass_quote('MonteQuest', '.')..if the price goes down as a result, will you still use less?

Nope. You?


I'm already using less. Have been for years. So, no, higher prices will not change things that much for me. I have a 2001 car with only 27,000 miles on it. I walk, hike and ride my bike mostly. My electric bill is $26/month. My neigbors is $200 and we live in the same apartment complex.

Will I use more if the price goes down. No, I am moving towards using less, regardless of price. Although all my energy savings just gets used up by the others who do not.

Since you will be using more, we need to keep the price up or prevent you from using that energy so we can have a net reduction.
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Postby Antimatter » Sun 17 Apr 2005, 08:18:08

$this->bbcode_second_pass_quote('', 'S')ince you will be using more, we need to keep the price up or prevent you from using that energy so we can have a net reduction.


The point is, as you know, peak oil will (most likely) force the net reduction in energy use. Hence Jevon's Paradox does not apply. Higher prices result in conservation and/or demand destruction, demand drops, prices fall, demand increases up to the new, lower limit. We can't use energy that isn't there.
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Postby MonteQuest » Sun 17 Apr 2005, 10:05:03

$this->bbcode_second_pass_quote('spot5050', 'M')onte, Jevons' Paradox does not apply in world of decreasing supply.


I asked Aaron to weigh in on this as he wrote the Jevon's Paradox thread :

$this->bbcode_second_pass_quote('Aaron', 'S')ure it does.

Jevon's paradox simply says that conservation & efficiency gains make energy less expensive and more available than it would be otherwise.

It applies no matter what the overall condition of the supply.

In fact, the effect of the paradox is more pronounced if supplies are shrinking.

If oil is already cheap, and supplies are growing, then conservation and efficiency gains have a limited impact on prices and availability.

However, if oil prices are high and supplies shrinking, the savings from conservation and efficiency have a bigger impact relative to the potential use of oil.

Energy savings don't get deposited into your energy bank account, waiting for you to use it, but remains on the market making that commodity less expensive that it would have been otherwise, stimulating it's use.

The cheaper our energy becomes, the more we encourage it's use.

Another way to view this is that we use energy at a constant rate... as much as we can afford.

When you make a carburetor twice as efficient, there are no net savings, because you end up with twice as many cars driving twice as far.
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Postby Aaron » Sun 17 Apr 2005, 10:32:13

$this->bbcode_second_pass_quote('Antimatter', '')$this->bbcode_second_pass_quote('', 'S')ince you will be using more, we need to keep the price up or prevent you from using that energy so we can have a net reduction.


The point is, as you know, peak oil will (most likely) force the net reduction in energy use. Hence Jevon's Paradox does not apply. Higher prices result in conservation and/or demand destruction, demand drops, prices fall, demand increases up to the new, lower limit. We can't use energy that isn't there.


Correct.

We can't use what is not there.

We could however, use less than is there.

But we won't.

Jevon guarantees that we will use every bit we can get our hands on.
This primarily means that we can't extend peakoil time lines through conservation or efficiency gains.
The problem is, of course, that not only is economics bankrupt, but it has always been nothing more than politics in disguise... economics is a form of brain damage.

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Postby spot5050 » Sun 17 Apr 2005, 18:34:21

Forget Jevon's Paradox. It has nothing to do with this discussion. It's irrelevant. Jevons' Paradox is a comment on the futility of effiency, but in a different world - a pre-peak world. It doesn't apply post-peak.
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Postby Mercani » Fri 22 Apr 2005, 03:37:19

Jevon's paradox says that we will consume whatever can be supplied. However in the real world that we are living in, oil market is not free. If you increase efficiency such that the price drops more than what OPEC would like it to drop, they will simply cut back on supply. They don't need to supply whatever they can extract. The price will not drop below a certain point to stimulate demand.

So let's quit talking about Jevon's, since oil market is not free.

I agree with spot5050 that oil decline doesn't automatically translate into poor people, and no economic growth.

Depletion rates of 3% can be easily matched by efficiency increases of 3% for at least 10 years. Who can say that they cannot possibly consume 70%(3x10) of less oil(not energy) in 2015? You can easily conserve 10% by reducing your driving. You can possibly conserve 20% more by switching to a higher efficiency car. (or switching to bus, motorcycle, bike, walking for some of your trips)

At the same time we need to change the structure of our economy to build more renewable energy producers. You can manafacture a windmill instead of a hummer with the same energy, I guess.
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Postby jato » Fri 22 Apr 2005, 05:54:47

$this->bbcode_second_pass_quote('', 'D')epletion rates of 3% can be easily matched by efficiency increases of 3% for at least 10 years. Who can say that they cannot possibly consume 70%(3x10) of less oil(not energy) in 2015? You can easily conserve 10% by reducing your driving. You can possibly conserve 20% more by switching to a higher efficiency car. (or switching to bus, motorcycle, bike, walking for some of your trips)


You are saying by 2015 the world economies could be using only 58.8 million barrels per day and continue to grow and function somewhat normally!

I admire your optimism! But let’s play make-believe:

%3 decline curve

2025= 45.6 mbd
2030= 39.2 mbp
2040=28.9 mbd
2050=21.3 mbd
2075= 9.9 mbd

At what point will the world’s economies be in trouble?
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Postby Mercani » Fri 22 Apr 2005, 08:13:13

$this->bbcode_second_pass_quote('jato', '
')At what point will the world’s economies be in trouble?


I expect world economy to be in trouble in 1 to 5 years, but not due to peak-oil. Basically the US is drowning in debt, Chinese and Japanese have too many dollars.

Let's get to the point:
If we are really clever not individually but as a society and as a species, world economy need not go into trouble.

Declare war on oil instead of terrorism !
Mobilize all non-essential industry (cars, military stuff, airplanes, ipods, etc.) to manufacture windmills, solar panels, nuclear plants, electric bikes. (just like you were mobilizing for war during WW2)

This won't happen of course, so probably we are headed towards a big crash. However, the problem is our stupidity not peak-oil !
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Re: Swimming

Postby FatherOfTwo » Fri 22 Apr 2005, 11:46:14

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('spot5050', 'I') spose the question is - 'how clever are we'? or 'are we clever enough'?


I would postulate that we are in fact the dumbest of all species. All others have the intelligence not to outgrow their habitat. We completely destroy our habitat to build McDonald's and shopping malls. Hard to get much dumber than that.


Watch out, you are going to incur Ludi's wrath.
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Postby pilferage » Fri 22 Apr 2005, 17:28:16

When this hits full force it will complete destroy any semblence of economic cohesion. If we, say, declared matrial law, and banned the use of personal vehicles, our demand would drop by ~40% overnight (increased efficiency could easily bring that up to 60%). That would give us a good decade or so before depletion caught us again, during which a concerted effort could restructure our society. I believe that the recent bankruptcy bill, the overall expansion of our prison system, and bills like H.R. 1528 are aimed at forming a large labor class to facilitate this restructuring...
Now the better question is, will we do that? :roll:
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Postby MonteQuest » Fri 22 Apr 2005, 19:20:00

$this->bbcode_second_pass_quote('Mercani', '
')Let's get to the point:
If we are really clever not individually but as a society and as a species, world economy need not go into trouble.


Well, we have managed to get the world economy in trouble without the advent of peak oil, so I hardly think the onset of oil depletion will improve things. 8) We can hardly grow now in the face of huge tax breaks, horrendous debt and deficit spending, and relatively cheap oil.
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Postby cammo2004 » Tue 26 Apr 2005, 13:33:54

$this->bbcode_second_pass_quote('Mercani', '')$this->bbcode_second_pass_quote('jato', '
')At what point will the world’s economies be in trouble?


I expect world economy to be in trouble in 1 to 5 years, but not due to peak-oil. Basically the US is drowning in debt, Chinese and Japanese have too many dollars.

Let's get to the point:
If we are really clever not individually but as a society and as a species, world economy need not go into trouble.

Declare war on oil instead of terrorism !
Mobilize all non-essential industry (cars, military stuff, airplanes, ipods, etc.) to manufacture windmills, solar panels, nuclear plants, electric bikes. (just like you were mobilizing for war during WW2)

This won't happen of course, so probably we are headed towards a big crash. However, the problem is our stupidity not peak-oil !


This is indeed the core of the problem. If we don't learn from Peak Oil, maybe we'll learn from Peak Coal?

Our society's main problem is we are too shut in our little world that we don't bother to listen to the warnings.

I personally will have to worry alot less about Peak Oil than some (not having the ability to gain a licence, I'm forced to depend on PT). Ultimately, how long the crash lasts depends on how long it takes human society to wake up and realise that the current, oil-centric/car-centric model will no longer work.

I personally don't think that Peak Oil is the start of a new Dark Ages. But I do believe that it will send us back a bit. Cities are sustainable, but not in their current form. European cities are closest to the ideal model, with high density and high levels of public transportation.

Essentially, we'll be, process wise, sent back to the dawn of electricity. But with more advanced technology, we'll have far more efficient processes.

Of course I'm talking about after the readjustment period. One of the things that will need to happen in the oil crash is the prioritization of energy. Energy will need to go to:

-Essentials (food, water)
-Transport (this includes development of mass transport solutions).

Mass transportation, I believe will have a significant role in the realignment.

Of course, this is merely my opinion, and as such, feel free to criticise or disregard it. :)
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