[CrudeAwakening]

Just thinking: won't there be a time lag between the market adjusting to (D-S) and prices changing accordingly?

So that P'(t) = k(D(t-s), S(t-s))

where s is a constant time value indicating the lag of information?

i.e prices don't begin to adjust instantly in response to changes in demand and supply, it takes time for the info to filter through. Obviously in some markets s will be larger than in others.

[nero]

Almost there, I shouldn't have used the term equilibrium I really mean ideal. I was meaning ideal like a reversible process in thermodynamics. In an ideal system D and S can be equal to each other and changing at the same time. In the real world to a first aproximation that is what really happens. The demand for oil is 84 mbpd and the supply for oil is 84 mbpd and both are increasing by about 2% a year.

Yes I'm familiar with derivatives, differential equations, statistics and that stuff. You could say we are on speaking terms but we don't have each other over for tea.

[kmann]

$this->bbcode_second_pass_quote('ElijahJones', '
')We want this system to have an equilibrium at D=S. To do that either k[2] =P and k[3]=1/P giving

P'=k[1](D-S)
D'= S
S'= D

Or k[2] and k[3] are function of P (at least) such that

limit (D-S->0, k[2] = P)
limit(D-S->0, k[3] = 1/P)

[WebHubbleTelescope]

I would like to see the relationships applied to something like bottled water. I seriously think you could make some headway in solving the pricing mechanisms for that stuff. And then how does it apply to something like tap water. If you can use those as calibration points, given that water definitely is an infinitely replenishable resource (for all intents and purposes), you might be able to explain why a gallon of gasoline costs on the order as much as a gallon of bottled water right now, but will go through the roof with demand destruction.

This would really get the rank&file thinking about the economics of oil.

Otherwise the partials you spec'd up would not really be that hard to solve with something like a Runge-Kutte integrator. You would have to be careful to make the dt's small enough to keep it stable though. Non-linear formulations can give different, even chaotic, responses depending on the size of the delta's.

[WebHubbleTelescope]

Elijah,
Over in the depletion modeling thread, there is a push to get the economics into the models:
http://www.peakoil.com/post196552.html

Having another good mathematician over there can't hurt.

[WebHubbleTelescope]

I lost track, P is price, right?

The only way a sinusoid can come out of the result is due to feed-forward elements. The exponential is typically due to integration (i.e. accumulation) of past, lagged events, while the sinusoid comes about due to derivatives (i.e. rates of changes) perhaps in anticipation of future events.

In the typical extraction model, ignoring price, I have only considered the lag parameters but I see value in considering the lead parameters. The big problem is that the feed forward parameters usually switch on and off without warning, which leads to a difficulty in achieving a stationary solution.

[AdamB]

$this->bbcode_second_pass_quote('', ' ')
Each year the U.S. Energy Information Administration (EIA) produces forecasts of U.S. oil and gas production in its Annual Energy Outlook (AEO), which is widely viewed as an authoritative assessment of what to expect for future U.S. oil and gas output (the EIA prefers the term “projection” to “forecast”). The EIA’s reference case is considered as the most likely scenario by industry, policy makers, and the media. Considering that AEO reference case forecasts for shale gas and tight oil production in recent releases are remarkably optimistic when considered at the play-level in terms of well productivity, decline rates and prospective areas, I find this baffling and worrisome. It’s one thing for industry to paint a rosy picture of future production, but something altogether different when a government agency—tasked with providing the American public with objective information—does it. AEO2018, for example, projects that

[AdamB]

Interesting that in his anti-EIA pronouncements, David doesn't notice that the last graph presented appears to track pretty closely the USGS estimate for the Wolfcamp shale in the Midland basin. And then David presents no geologic information to refute what appears to be the EIA using the best geologic information available to base their estimates upon?

I would like to see David's geology work, rather then him pretending he knows anything about well performance, work that as best I can tell is even worse than what Art Berman once pumped out. Which is saying alot, but then neither of these guys have ever had to put their name on a companies reserve report I imagine.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('AdamB', 'I')nteresting that in his anti-EIA pronouncements, David doesn't notice that the last graph presented appears to track pretty closely the USGS estimate for the Wolfcamp shale in the Midland basin. And then David presents no geologic information to refute what appears to be the EIA using the best geologic information available to base their estimates upon?

[KaiserJeep]

To comment about what OS just said, I'd like to plug the "Free Slow Crash" manifesto which is a useful online PDF document called "Peak Energy, Climate Change, and the Collapse of Global Civilization". It is found all over the web and everybody should read it. It's freely downloadable as it was somebody's PHD thesis in 2010, look for the revised 2nd release version under the same title.

The other work of note is a copywrited book which you should also read if you have not already. It was published in 2005 by James H. Kunstler under the title The Long Emergency. It's worth paying for. Yeah, I know most people's opinion of the author, but this work is easily worth the less-than-$10 cost.

https://www.amazon.com/dp/B008UX3KY2/ref=dp-kindle-redirect?_encoding=UTF8&btkr=1

As most of you know, I am a champion of the "Slow Crash" form of Doom. I think the real emergency started about 1798 when the Rev. Thomas R. Malthus published An Essay on the Principle of Population. He had recognized the time when the human population of Planet Earth had exceeded the capacity of the eco-system to heal the damage it caused.

Our world has been dying since then. Peak Oil is the most prominent resource shortage, and the one that will probably hurt the human apes the most, and provoke numerous other shortages. In case you have not figured it out yet, I believe that all of us have lived our complete lives within the slow crash scenario, as did your Grandfather and even earlier ancestors. As will your Grandchildren if you are fortunate enough to have any. They will be seriously inconvenienced by Peak Oil, it will be reality for them, not the academic discussion it is for us.

In case you are in doubt about the rest of my beliefs, trying to model the exact date or impact of Peak Oil is a fruitless endeavor, because the prime variable is human behavior. We do not possess a Calculus of human behavior and we are not likely to ever have one. In spite of your pressing need to know the exact date of Peak Oil, this will be obvious only years after it happens, and in retrospect. BTW, my date is 2nd quarter 2008, for reasons I have enumerated many times.

[onlooker]

I do not think it is very productive or useful to highlight time frames per say. And especially to attempt predictions related to time intevals. What is I believe more useful is to gauge the increasing pressures and vulnerabilities within the Natural Systems and Human impacts. We have valuable sources of data that assesses precisely these variables. What is telling is that we are increasing our pressure on the Natural World via our ways of living and our continuous increase in population. This is putting pressure on a host of systems that support human life and well being.

For instance, a human pandemic is becoming ever more possible as we venture into previously inaccessible areas and as people cram ever more into the cities and as the pathogens are becoming ever more adaptive to our antibiotic medicines.
Another trenchant barometer is potable water. Highly populated places like India and China are approaching dangerously low aquifer levels and fresh water supplies. Plus, the ecosystems everywhere are being debilitated from species die off, takeover by human ecosystems , by pollution and finally now we are seeing from GW.
Finally, full blown collapse will not be uniform either in time or space. So, no singular moment will be reached when global civilization has collapsed. Rather, certain places at certain times will degrade rapidly, while others will not. Of course, what people do or do not do, will influence what areas and societies can hang on longer. I think it is too early to assess whether remnants of human civilization will persist beyond this century.

[GHung]

$this->bbcode_second_pass_quote('', '[')b]Most economic forecasts have a big blind spot: Climate change

Heat waves that ground airplanes. Rising seas that drown waterfronts. Wildfires that consume whole cities and blanket the West Coast in smoke.

Climate change is having a real impact, not just on the environment but on the economy too. And a growing body of research by economists and climate scientists shows that extreme weather will weigh on economic growth even more so in the future. But almost no mainstream economic forecasting model takes that into account, in an omission that some economists say could affect the accuracy of economic predictions going forward.

The most recent study to quantify the economic impact of the carbon emissions that spur climate change was featured last week in a brief by the Federal Reserve Bank of Richmond. By evaluating the performance of state economies in previous years, the report found that every one degree increase in average summer temperatures decreases annual state-level output growth by between 0.15 and 0.25 percentage points. ....

...... "Every analysis that's been done of this shows that action is far cheaper than inaction, and there's a global clean energy race that we are currently losing, and that's bad for our economy," Hassol says. "We've got to break this out of the environmental and science box, because I think it's first and foremost an economic story."

The Obama administration had made strides in connecting climate to the economy, issuing a number of reports and also refining a metric called the "social cost of carbon," which was used in tallying the costs and benefits of proposed regulations. The Government Accountability Office, which answers to Congress, continues to warn about the risk climate change poses to federal revenues.

But climate work has mostly ceased under the Trump administration, which last year disbanded a group that calculated the social cost of carbon, and archived the Environmental Protection Agency's web page on the subject.

Nevertheless, research on the connection between climate and the economy is advancing in a surprising place: The private sector. Insurance companies, for example, increasingly integrate climate projections into their coverage offerings. Hundreds of large global companies have signed on to an effort to incorporate climate exposure into financial disclosures. ....

more: https://money.cnn.com/2018/08/17/news/e ... index.html

[Tanada]

The climate models however predict that once the climate actually steps from the current 14Cish world tempt to the 17Cish next step up the ladder the extreme events will become less common again. The biggest changes will be Californians figuring out they actually live in a desert and irrigating orchards of almond trees and acres of cotton is STUPID in that climate. They have gotten away with it in the past because they shipped in water from far away, but those far away sources are not nearly as plentiful as they once were and pretending otherwise doesn't influence reality.

Basically I am saying if insurance companies stop encouraging people to live in stupid locations like on hills that slide in wet weather and deserts that require massive irrigation and hills where wild brush grows thick enough to make massive fires every decade or so we will all be much better off.

[GHung]

$this->bbcode_second_pass_quote('Tanada', ' ') ......

Basically I am saying if insurance companies stop encouraging people to live in stupid locations like on hills that slide in wet weather and deserts that require massive irrigation and hills where wild brush grows thick enough to make massive fires every decade or so we will all be much better off.