by AgentR » Fri 10 Nov 2006, 23:53:52
$this->bbcode_second_pass_quote('joewp', 'W')ell, you didn't give a time frame. I was assuming swift increases in price as depletion accelerates in the near future. People won't have the time or the money to trade in their gas-guzzler for a scooter.
Certainly I understand your point, however, that would require a VERY rapid decline in production; it would also require a very innelastic demand and willingness and ability for very poor countries to continue to pay ever higher prices. I don't think they can get there.
I simply don't think the market can achieve that sort of run up in price.
To get the kind of spike with hold, you'd have to be suggesting a drop, year by year that went like, 85, 80 , 60, 40, 20, 10mbpd world production. If we got that steep of a decline, I could believe a very rapid, sustained price increase. Otherwise, I just don't think you can sell 60 mbpd at $500 / barrel.
$this->bbcode_second_pass_quote('', 'A')lso, as gas/energy prices rise (please note that all energy prices rise in unison, keeping their cost per BTU relatively equal), so will the price of those more efficient vehicles AND demand for them will rise faster than their supply, which will put upward pressure on their price. People will be forced to keep their gas-guzzlers until they just can't afford to drive at all, lose their jobs and houses and live in those aging Expeditions and Escalades.
Eventually, sure, but that would require, again, a very steep escalation in price, which I don't think can be achieved by the market. People can do all sorts of hideous things to avoid burning miles, if given the appropriate motivation.
$this->bbcode_second_pass_quote('', 'T')he End of Suburbia, way earlier than $20/gallon!