[mmasters]

What signs are there to look for that an impeding oil shock is coming? By oil shock I mean when supply and demand are at odds. This last happened in 2007/2008.

[ralfy]

Given economic crisis, oil demand may be decrease given lower production of non-necessities, but this may be offset by increased production for necessities such as food and medicine, especially for a larger global population that requires them.

[John_A]

The Third Great Oil Crisis. In 2007. Apparently one happened a year before the 2008 spike and crash as well. So maybe that was the 4th Great Oil Crisis. How the Fifth might look in my opinion is exactly what you see now. Increased prices leading to accessing things we would never have used to make fuels with before.

leggett-po-to-hit-society-with-a-big-seismic-shock-t33878.html?hilit=oil%20shock

[BobInget]

pstarr took the words out of my brain. These 'oil shocks', like most calamities, aren't worldwide happenings. While oil exporting nations soldier on during the worst of times, its energy poor that suffer the most. It would be easy to blame Egypt's current difficulties on energy shortages.. But we know Egypt's problems are an amalgam and result of decades of crazy energy policy, corruption, unfettered population growth and on and on. Mobs need something tangible to focus on. Gasoline, electrical shortages sharpen that focus. Because yet another former oil exporter finds its economy in tatters, like Syria, Egypt, hanging does, as they say, 'concentrate the mind'. Is this a peek into the distant future for the US, we ask ?
I don't belied it is. Despite regressive forces constantly trying to pull us back to places we never were,
America remains a beacon of progress. Not the only beacon mind, but compared to Denmark that already get 30% of its energy from wind and hydro, we are behind the times. When Americans are pushed into action, we will find one or two vital arenas we can all unite around. Alternative energy, I'm certain will be first on the list if for no other reason, 'it's not that difficult to make small changes, gradually.

[Pops]

Keyword
"spare capacity"

[ralfy]

Thanks, Pops. I'm reminded of this chart from Morgan Stanley:

http://www.businessinsider.com/oil-spar ... 013-2011-2

[Loki]

The most reliable sign is the one at the gas station. Ignore the 9/10s part and just round up.

$this->bbcode_second_pass_quote('John_A', 'T')he Third Great Oil Crisis. In 2007. Apparently one happened a year before the 2008 spike and crash as well. So maybe that was the 4th Great Oil Crisis. How the Fifth might look in my opinion is exactly what you see now. Increased prices leading to accessing things we would never have used to make fuels with before.

[Quinny]

Don't know whether you are just being sarcastic, but 'strongest economy we've ever seen' Wrong!

$this->bbcode_second_pass_quote('Loki', 'T')he most reliable sign is the one at the gas station. Ignore the 9/10s part and just round up.

$this->bbcode_second_pass_quote('John_A', 'T')he Third Great Oil Crisis. In 2007. Apparently one happened a year before the 2008 spike and crash as well. So maybe that was the 4th Great Oil Crisis. How the Fifth might look in my opinion is exactly what you see now. Increased prices leading to accessing things we would never have used to make fuels with before.

[SeaGypsy]

Come on Quinny! Loki is definitely being sarcastic- took a serious wage cut, left his profession, comfort etc. to become an organic farmer on minimum- the guy is a prophet- just a humble one.

[John_A]

$this->bbcode_second_pass_quote('Loki', ' ')Today the US is producing more oil than ever before with the strongest economy we've ever seen, falsifying Hubbert's peak oil nonsense. Right?

[SeaGypsy]

$this->bbcode_second_pass_quote('John_A', 'I') doubt that most people here would like the idea that the leadup and consequence to an oil shock is just increased efficiency and poor growth while working through the transition.

[agramante]

Increases in efficiency can only account for so much of a decrease in consumption. There is a limit to what efficiency can accomplish (the barest minimum would be the chemical energy required to do the physical work, but none of our machines are remotely that efficient). At some point, a decrease in consumption means a decrease in activity, which means shrinkage in the economy.

There are a few reasons why our economy now is much more efficient than it was, say, 40 years ago. Notable among them is that we've outsourced much of the manufacturing to countries like China, which are only too happy to burn coal to make it happen. The growing disparity in incomes has left many (or most) Americans with dramatically reduced, or entirely nonexistent, budgets for things like travel and discretionary purchases. This disparity is one of the prime reasons for the illusory nature of our recovery.

[Quinny]

I did think that, but a bit confused by recent posts!

$this->bbcode_second_pass_quote('SeaGypsy', 'C')ome on Quinny! Loki is definitely being sarcastic- took a serious wage cut, left his profession, comfort etc. to become an organic farmer on minimum- the guy is a prophet- just a humble one.

[Loki]

$this->bbcode_second_pass_quote('John_A', '')$this->bbcode_second_pass_quote('Loki', ' ')Today the US is producing more oil than ever before with the strongest economy we've ever seen, falsifying Hubbert's peak oil nonsense. Right?

[Loki]

$this->bbcode_second_pass_quote('SeaGypsy', 'C')ome on Quinny! Loki is definitely being sarcastic- took a serious wage cut, left his profession, comfort etc. to become an organic farmer on minimum- the guy is a prophet- just a humble one.

[ROCKMAN]

I suppose to be analytical about it we would break demand destruction into two components: increased efficiency and voluntary/involuntary consumption reduction. I would think increased efficiency would require a significant change in infrastructure like autos, heating/cooling systems, insulation improvements, etc. Obviously this takes time along with capital. But once in place the effect remains even in the face of lower energy costs.

The voluntary/involuntary portion can happen almost instantaneously. OTOH as prices decrease this effect of this component could reverse very quickly. Like many dynamics easier to see in the rearview mirror than in real time

[POBox]

I have to think that any voluntary consumption reduction is more the result of bad economic times than intentional change. If you can't afford to replace an old car, you drive it less to avoid major repairs, or to save gas money.

I do believe electricity usage has decreased due to use of CFLs and a few LEDs. These and added insulation are low-hanging fruit, within the range of the frugal consumer.

The intentional reductions have more to do with establishing new habits, combining trips, working from home or finding local work, leaving the lights off, etc. I've adopted these new habits, but has the average adult consumer done anything significant yet? I hate to be pessimistic, but I don't think so...

[John_A]

$this->bbcode_second_pass_quote('SeaGypsy', '')$this->bbcode_second_pass_quote('John_A', 'I') doubt that most people here would like the idea that the leadup and consequence to an oil shock is just increased efficiency and poor growth while working through the transition.

[Pops]

$this->bbcode_second_pass_quote('ralfy', 'T')hanks, Pops. I'm reminded of this chart from Morgan Stanley:

http://www.businessinsider.com/oil-spar ... 013-2011-2