PeakOil is You
Bizarre CNN Money story on oil prices
Re: Bizarre CNN Money story on oil prices
by MrBill » Fri 11 Aug 2006, 14:29:40
$this->bbcode_second_pass_quote('Falconoffury', '')$this->bbcode_second_pass_quote('', 'N')obody says there would be a full recovery. More like a partial recovery. What most people here think is that there will be a slump, partial recovery, a bigger slump, partial recovery, etc... but all the time going downhill.
There's an old saying, "One step forward... two steps back." We can expect this sort of cycle a number of times until the economy is so devestated that the guy doing the stepping is dead. Then, a beat up muscle car speeds past with Mad Max driving it, in search of gas.
![[smilie=dead.gif]](https://udev.peakoil.com/forums/images/smilies/dead.gif "dead")
![[smilie=car32.gif]](https://udev.peakoil.com/forums/images/smilies/car32.gif "car32")
If I look at other blogs and their links, I notice that none of them link back to peak oil? Hmm, maybe because the extent of our imagination is a film made in the 1970's staring Mel Gibson that defines our future as a Mad Max scenario? I would not take this website seriously either if I was a policy maker. Thanks for helping to make this site even less reputable about post peak oil solutions with your observations....
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Re: Bizarre CNN Money story on oil prices
by Falconoffury » Fri 11 Aug 2006, 15:25:58
You're welcome. ![[smilie=love4.gif]](https://udev.peakoil.com/forums/images/smilies/love4.gif "love4")
"If humans don't control their numbers, nature will." -Pimentel
"There is not enough trash to go around for everyone," said Banrel, one of the participants in the cattle massacre.
"Bush, Bush, listen well: Two shoes on your head," the protesters chant
"There is not enough trash to go around for everyone," said Banrel, one of the participants in the cattle massacre.
"Bush, Bush, listen well: Two shoes on your head," the protesters chant
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Re: Bizarre CNN Money story on oil prices
by BigTex » Fri 11 Aug 2006, 23:25:04
Okay, great replies and thank you. Now here are a few more:
1. If you look at the rise and fall of production in texas, it is not a Hubbert bell shaped graph at all, it is more like a gently sloping hill up and then down (with the peak around 1971). Why was the Texas production line not dramatic like many of the projections about worldwide production. I realize the Texas Railroad Commission carefully regulated production, but hasn't OPEC played a similar role on the world stage?
2. Help me understand why Hubbert's peak doesn't apply to all depletable natural resources without ready substitutes. For example, is there going to be "Peak Gold" or "Peak Iron"? I know there will apparently be Peak Coal and Peak Natural Gas at some point, but I have a harder time seeing the logic applied to things like gold and silver. Perhaps the "peak" part of the theory is only triggered by resources with relatively inelastic demand. Any thoughts on this one?
3. With respect to the comments about SHTF triggered recessions causing a drop in demand and price for oil, one of the replies to this is that Chindia represent too much new demand for the recession scenario to help that much. But as I see it, China's economy craters without the U.S. to buy all the crap they are exporting. No U.S. market for Chinese exports and I would think that China's thirst for oil might be reduced very significantly. Similar story in India I would think. A bunch of empty call centers and radiologists turned survivalists.
4. I understand that we are dealing with a resource that is absolutely dwindling, but if you move to coal for electricity generation, develop better battery technology for some passenger transportation applications, implement more telecommuting, less consumption in general, more efficient building techniques and more efficient HVAC equipment, stop outsourcing and put production and distribution facilities close to one another, throw in a little nuclear, solar and wind power, and splash a little biodiesel on the thing, then put a serious long term recession on the whole world, the situation might look a lot different. What do you think? It seems like in that scenario you might be giving yourself several decades before PO begins to really be felt.
1. If you look at the rise and fall of production in texas, it is not a Hubbert bell shaped graph at all, it is more like a gently sloping hill up and then down (with the peak around 1971). Why was the Texas production line not dramatic like many of the projections about worldwide production. I realize the Texas Railroad Commission carefully regulated production, but hasn't OPEC played a similar role on the world stage?
2. Help me understand why Hubbert's peak doesn't apply to all depletable natural resources without ready substitutes. For example, is there going to be "Peak Gold" or "Peak Iron"? I know there will apparently be Peak Coal and Peak Natural Gas at some point, but I have a harder time seeing the logic applied to things like gold and silver. Perhaps the "peak" part of the theory is only triggered by resources with relatively inelastic demand. Any thoughts on this one?
3. With respect to the comments about SHTF triggered recessions causing a drop in demand and price for oil, one of the replies to this is that Chindia represent too much new demand for the recession scenario to help that much. But as I see it, China's economy craters without the U.S. to buy all the crap they are exporting. No U.S. market for Chinese exports and I would think that China's thirst for oil might be reduced very significantly. Similar story in India I would think. A bunch of empty call centers and radiologists turned survivalists.
4. I understand that we are dealing with a resource that is absolutely dwindling, but if you move to coal for electricity generation, develop better battery technology for some passenger transportation applications, implement more telecommuting, less consumption in general, more efficient building techniques and more efficient HVAC equipment, stop outsourcing and put production and distribution facilities close to one another, throw in a little nuclear, solar and wind power, and splash a little biodiesel on the thing, then put a serious long term recession on the whole world, the situation might look a lot different. What do you think? It seems like in that scenario you might be giving yourself several decades before PO begins to really be felt.
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Re: Bizarre CNN Money story on oil prices
by Tyler_JC » Sat 12 Aug 2006, 00:47:33
What happened in the late 1990s?
1. The North Sea was running at maximum capacity, providing plenty of cheap energy for the UK and Europe.
2. Currency speculation caused a recession in Asia and demand crumbled.
3. Saudi oil production, along with the rest of OPEC, was running at essentially full speed because they decide to ignore the quotas to increase revenue. This was counter-productive of course, because prices fell to the mid-teens.
The recovery of the East Asian economy, the decline of several oil fields (North Sea included), war in the Middle East, and strong all-around global growth over the past couple of years has eliminated the supply glut.
But I believe that if we see a global recession, oil demand might fall faster than oil supply.
In order for that to happen, however, I think we would need to see oil prices in the $100 range. At that level, the Fed (and the European and Japanese central banks) would go rate-hike crazy, leading to a global liquidity crunch and a recession.
The basic laws of economics still apply. They just don't apply to non-renewable resources without substitutes.
PS. "going rate-hike crazy" is a registered trade mark of Tyler_JC's Economic Policy Institute, Inc. Any unauthorized use of that term will result in large numbers of unfriendly private messages.
1. The North Sea was running at maximum capacity, providing plenty of cheap energy for the UK and Europe.
2. Currency speculation caused a recession in Asia and demand crumbled.
3. Saudi oil production, along with the rest of OPEC, was running at essentially full speed because they decide to ignore the quotas to increase revenue. This was counter-productive of course, because prices fell to the mid-teens.
The recovery of the East Asian economy, the decline of several oil fields (North Sea included), war in the Middle East, and strong all-around global growth over the past couple of years has eliminated the supply glut.
But I believe that if we see a global recession, oil demand might fall faster than oil supply.
In order for that to happen, however, I think we would need to see oil prices in the $100 range. At that level, the Fed (and the European and Japanese central banks) would go rate-hike crazy, leading to a global liquidity crunch and a recession.
The basic laws of economics still apply. They just don't apply to non-renewable resources without substitutes.
PS. "going rate-hike crazy" is a registered trade mark of Tyler_JC's Economic Policy Institute, Inc. Any unauthorized use of that term will result in large numbers of unfriendly private messages.
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Re: Bizarre CNN Money story on oil prices
by MrBill » Sat 12 Aug 2006, 12:40:58
$this->bbcode_second_pass_quote('Falconoffury', 'Y')ou're welcome.
Which is not to say that a Mad Max future is not that awaits us? When I look at a Zimbabwe, then indeed starting from a fairly high base, a country can be run into the ground very quickly with the right/wrong thugs in charge! In any case, I just want to apologize for my comment. Take care and have a nice weekend. Cheers
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Re: Bizarre CNN Money story on oil prices
by lorax2012 » Sat 12 Aug 2006, 13:57:41
This CNN story is just one more example of the establishment trying to avert panic. It is too bad our society has chosen to ignore the inconvenient truth of peak oil. Rather than get frustrated though, you can look on it as an opportunity. There are hundreds of undervalued investments due to the fact that the public has not caught on to PO - farmland, oil futures, precious metals... Sure, there may be a recession which knocks down oil prices temporarily - you can see that happening in the price charts around 2000 - 2001. I don't see anything on the horizon however which will stop the overwhelming trend.
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by Concerned » Sat 12 Aug 2006, 18:13:07
$this->bbcode_second_pass_quote('MrBill', '')$this->bbcode_second_pass_quote('Concerned', '')$this->bbcode_second_pass_quote('MrBill', '
')If you do not believe in the rules of economics then I guess you're not worried about the economic fallout from high oil prices or scarcity either? It simply should not matter to you?
')If you do not believe in the rules of economics then I guess you're not worried about the economic fallout from high oil prices or scarcity either? It simply should not matter to you?
I think the so called rules of economics are bunk. Far too much theory rests on shaky logic and thought process. See debunking economics by Steve Keen.
There are I believe good conceptual frameworks to begin understanding an economy which unfortunately get extrapolated and applied too widely destroying the initial theorys validity.
So it looks like his webpage is mostly about him and stuff he has published and where you can find his links. Nothing wrong with a little self-promotion.
Seriously what did you expect?
$this->bbcode_second_pass_quote('', '
')But what do you find disturbingly wrong with
Nothing disturbingly wrong with any of it. The way many theories are applied square peg round hole style is the problem.
Keens book discusses issues surrounding some of the items you listed.
Black Scholes wasn't that the trading system that led to LTCM disaster and subsequent bailout? Financial meltdown asian currency crisis?
$this->bbcode_second_pass_quote('', '
')
It kills me when someone complains about the economy going in the wrong direction - unfunded future liabilities, trade deficits, declining competitiveness of domestic manufacturing, offshoring of jobs, high energy prices, housing bubbles, and then they make a fool out of themselves by saying, 'but, by the way, economics is hocus pocus anyway.' So how did you arrive at your conclusions then? By reading tea leaves? ; - )
