PeakOil is You
Economics of Peak.
First unread post • 7 posts
• Page 1 of 1
by Leanan » Thu 12 Aug 2004, 14:43:09
Cuba is about the same size as Pennsylvania, and has about the same population. Of course, they're in the tropics, so they can farm year-round, while Pennsylvanians can't. Heating during winter also isn't a problem in Cuba.
-
Leanan - News Editor
- Posts: 4582
- Joined: Thu 20 May 2004, 03:00:00
by Soft_Landing » Thu 12 Aug 2004, 22:47:58
$this->bbcode_second_pass_quote('Marek', 'S')oft_Landing, you got the gist of the economic analysis of peak oil. Now, there is one problem: after the peak, you cannot maintain the pre-peak levels of production from existing fields - rather, you have to invest in new discoveries or begin to pump fields that had been discovered but were previously uneconomical.
Hi Marek. If I remember correctly, you are looking at Ph.D. work on Peak? I'm curious, but, do the economic arguments of Mike Moffatt etc. deal with the economic analysis in this way? (The economic arguments I've read fall short of what I would call serious analysis of peak) If so, how do they retain a positive outlook? I'm really struggling to understand both the economic argument against peak posing a problem as fairly as possible, and also, the best way to describe peak. Perhaps, as someone approaching this from an econ perspective, you might have some good links regarding econ analysis of peak?
In response to your comment:
Yes, yes, that must be the next thing. When the price rises, that has to melt down the economy until the oil price facilitates a recovery. But, at lower oil prices, even less oil is worth investing in than is the case now.
Here's something I wrote in a different thread. (Here)
$this->bbcode_second_pass_quote('I', 'F')or example, there's lots of talk here about petrol/gas prices going up 3 to 4 times. This would take oil prices going up more than 3 to 4 times. I am very sceptical about these possibilities, or, to be more precise, think they are a load of poo. I doubt oil price would ever breach $150 (in todays dollars), because you'd see an economic meltdown quick as you like! Nothing crunches oil price like meltdown, and I don't suppose that high oil prices, even todays $45 could persist through a meltdown. I rather think the economy would keep melting until there was total breakdown, or, until oil prices become amenible to a global recovery. That might be $15? Who knows? At that point, I doubt oil price would ever get back above $50 again, because every slight increase in the oil price would melt any burgeoning recovery.
But to just take on side, we would miss the complexity of the argument.
In the early eighties, oil prices melted the economy, and lowered total consumption of oil. That's how the beginning of peak needs to look. The economy shrinks until either the system breaks, or demand has overcorrected far enough to make energy cheap enough to stimulate the beginnings of a recovery.
You have two things working against you at this point. Time, as existing wells produce even less each year, pushing up prices again. And also, the fact that oil price is too low to justify investment.
I have heard it said that we wont know peak until a few years afterward, and also, that peak is not an economic phenomenon, but a geological phenomenon. I suggest an alternative to both these propositions.
Looking backward, historians might well claim that we never hit a geological peak, rather, the ecomony will melt down. There was still oil there to recover, they may say, but the weak economy couldn't get it. Peak (understood as geological) may be thought of as a fear that never eventuated, because the economy crumbled first. Of course, from our perspective, we can see that the two problems are one. More specifically then, I suggest that peak oil, understood appropriately, is not a geological problem at all, but rather, is precisely an economic problem.
-
Soft_Landing - Lignite
- Posts: 367
- Joined: Fri 28 May 2004, 03:00:00
by Carmiac » Thu 12 Aug 2004, 23:26:27
$this->bbcode_second_pass_quote('', 'W')ho would have thought that Cuba would be the future model for the human race, the only sustainable society. This is classic.
Piers Anthony did, in a mediocre quality, distopian future, time travel book.
-
Carmiac - Peat
- Posts: 59
- Joined: Tue 20 Jul 2004, 03:00:00
by trespam » Fri 13 Aug 2004, 00:14:39
$this->bbcode_second_pass_quote('Soft_Landing', 'L')ooking backward, historians might well claim that we never hit a geological peak, rather, the ecomony will melt down. There was still oil there to recover, they may say, but the weak economy couldn't get it. Peak (understood as geological) may be thought of as a fear that never eventuated, because the economy crumbled first. Of course, from our perspective, we can see that the two problems are one. More specifically then, I suggest that peak oil, understood appropriately, is not a geological problem at all, but rather, is precisely an economic problem.
Wondeful. There goes the value of my energy fund. Well, at least it will earn something.
-
trespam - Tar Sands
- Posts: 995
- Joined: Tue 10 Aug 2004, 03:00:00
- Location: San Diego, CA, USA
