[DamianB]

I think that the peak senario is more subtle; at the moment the most significant constraints in the supply chain are transport (VLCCs?) and refining capacity. I am aware of only one sizeable refinery being built (800K/day) and the maritime law outlawing single-hulled carriers is squeezing flow out of the ME (and providing a smokescreen!). This isn't a coincidence; the oil industry isn't going to invest in kit when they know that extraction is going to top out at (say) 87mbd. With everyone focused on NG and nuclear, the oil price might creep up to $60-65 without too much fuss and depressed demand will allow a drawn out decline of 84-83mbd over three or four years.

UK and US economies are beginning to stall now - it's already been 'as good as it gets'.

So for several years, extraction rates won't constrain the economy, production and delivery capacities might.

How severe a recession we get depends on many things but one thing that could be hugely influential is public attitude. If energy and its provision are seriously and widely debated, we could have an attitude change towards conservation.

This is a crucial idea for me and its why I believe we peakniks can ameliorate the impact of PO - by explaining resource constraints and population growth to people we know.

Electricity and NG supplies are getting more air-time than oil. We need to leverage this to get oil supply included.

[drew]

Sorry, I think a recession will certainly aleviate demand and put off peak for a couple of years or so, but this will do nothing for attitude and conservation. The present economic system is based entirely on continual growth and expansion, and will not be changed so easily. The mainstream media still thinks PO is a lark for the most part and there is a widely held belief that tech (hydrogen for instance) will somehow save the day. I suspect that people will blindly continue along until it's much too late.

Drew

[OilyMon]

The issue is so complex that is impossible to think of everything. Responsible leadership would be an enormous boon to the industrialized west.. what do we got? A corrupt Canadian "Liberal" government and a Texas Waco! In order to mollify the public to the effects of petroleum depletion, The Waco and the Thief need to address the public specifically on this issue. Above all else, people need to calm down and think rationally!

[Colorado-Valley]

My guess is that if the responsible people conserve oil, the SUV people will just use more of it.

Quite the dilemma ...

[jaws]

I've always believed that there would come a point where continuously-increasing prices would cause oil producers to voluntarily restrict their production. The idea is that if your oil will get a better a price in the future, and you only have a certain endowment of it, that you will wait to sell and instead borrow against it for your income in the meantime. This would imply that the decline phase would have a sharp drop at some point, then a relatively flat decline. The troublesome part is the sharp drop.

[chargrove]

We don't need a sharp drop, or even a decline itself before this starts causing things to go out of control. All we need is a recession sufficient enough to cause US economic growth to fall lower than 2% for a while. That's right, we can still be growing, and yet still be in a world of pain if that growth slows down to less than 2% (which it inevitably will with PO on the horizon).

Congressman Bartlett said the US needs at least 2% growth to service the interest on its debt. If we can no longer service our debt interest, we go bankrupt (not that we're not already bankrupt, but this would be definitive in the eyes of foreign investors). If we had sane leadership in this country, maybe such a collapse would be somewhat painful but manageable for the rest of the world... but with Chimpy in charge, you know this country won't go down quietly.

[DamianB]

I'm saying the decline has already started but it's not caused by PO and that peak extraction won't be a limiting factor for at least five years.

I haven't read Barlett's speech but I would suggest that printing money, higher taxes (how much would 10c on gas raise?) or reduced govt. spending could all come into play.

[Leanan]

I think it could be gradual, at least at first. People will conserve if prices get high enough. But it will cause a recession, and I suspect most people will not make the connection between the recession and depletion. Oh, they'll blame high gas prices, but they won't blame depletion. They'll blame OPEC countries, for not allowing foreign investors in, who can provide better technology. They'll blame China and India, for their inefficient use of energy. They'll blame terrorists, for making it hard to exploit Iraq. They'll blame those commies in Venezuela, for not fully embracing capitalism. They'll blame tree-huggers who won't allow drilling off the coasts of Florida and California. And they'll wait for a solution. If the prices get high enough, surely a solution will appear. Perhaps we'll even pour money into educating young people who want to specialize in energy technology, or spend billions on nuclear power plants or hydrogen. But instead of bringing back the good old days, more and more people will lose their jobs, and inflation will get worse and worse. Even people who keep their jobs will find they somehow cannot maintain their standard of living. We could go on this way for quite awhile, I think, depending on how much recession reduces our oil consumption.