[catbox]

The series in 2012 will be played on a gaurded sand lot.....we'll listen to it on the radio!

[Revi]

Here's the latest Archdruid report, and I have to say that I agree with him. Things are getting wierd:

http://thearchdruidreport.blogspot.com/

[threadbear]

$this->bbcode_second_pass_quote('Kaj', 'T')he year 2012 is the UK's turn to host the Olympics, and nothing should be allowed to interfere!
Foul play by the rest of the world! Thats just poor sportsmanship on behalf of those Mayans.

[MrBill]

$this->bbcode_second_pass_quote('Kaj', 'T')he year 2012 is the UK's turn to host the Olympics, and nothing should be allowed to interfere!
Foul play by the rest of the world! Thats just poor sportsmanship on behalf of those Mayans.

[Starvid]

$this->bbcode_second_pass_quote('MrBill', 'J')ust to clarify petroleum as a Giffen good it would be my understanding that we are talking about a percent of disposable income that goes to buying gasoline that increases as prices rise at the expense of other discretionary spending that has to fall.

This might preclude buying a new car that might be more efficient and save money in the long-run or as you mentioned having it even tuned up so that it uses less gasoline at the moment.

I just do not want anyone thinking that this means people would burn more gasoline in volume terms, but specifically as a rising percentage of disposable income. Right?

[MrBill]

Point taken. I can certainly see your argument.

But just to be (unusually) argumentitive I would like to point out that it was called the Irish Potatoe Famine not because the Irish were eating more potatoes, but because disease killed the potatoes, and therefore there were not enough potatoes to eat, so people either starved to death or emigrated.

The Giffen good was therefore the increasing portion of potatoes in the Irish diet prior to the famine which was likely caused by poverty and/or misrule.

Therefore if petroleum is a true Giffen good its usage would have to increase. Not possible post peak oil depletion. Demand destruction has to kick in to align worldwide supply with global demand.

So as a quasi-Giffen good in the interim demand destruction will take place in other discretionary spending as business and consumers allocate more disposal income or operating capital to transport or driving than to other lesser spending priorities.

Due to a lack of alternatives their proportion of spending on transportation fuel increases as a percentage of overall income crowding out other spending. Or even (as mentioned above) the search and development of meaningful transportation or energy alternatives.

Otherwise I have to consign Giffen to the Phillips and Laffer pile of interesting, but imperfect economic concepts when theory meets reality! ; - )

[jbeckton]

$this->bbcode_second_pass_quote('GreyGhost', '
')Yes that makes sense. Or, on a larger scale, if we have less energy available for activities like building nuclear reactors (which are "discretionary" compared to, say, eating), so we don't build them and end up needing to consume more fossil fuels.

[Revi]

Most people in the US don't live anywhere near any public transportation, so unless they sell their houses they are stuck with their cars as transportation. There is no alternative to driving around. They will have to switch to a more efficient car, but they won't move towards a place that makes sense for a while. The real estate market is tanking, so they couldn't sell their houses for a good price anyway. I don't know if that makes gasoline a giffen good, but they are stuck with buying it for quite a while.

[MrBill]

$this->bbcode_second_pass_quote('jbeckton', '')$this->bbcode_second_pass_quote('GreyGhost', '
')Yes that makes sense. Or, on a larger scale, if we have less energy available for activities like building nuclear reactors (which are "discretionary" compared to, say, eating), so we don't build them and end up needing to consume more fossil fuels.

[wisconsin_cur]

In the comfortable days before I knew what "light sweet crude" was or why it mattered, I spent my free time rock climbing and my pleasure reading were backpacking and mountain climbing tales.

Not many people die on the way up the mountain, most die after reaching the summit. The more time they are exposed to the elements the more likely they are to run into bad weather. The more tired they are, the more likely they are to make a bad decision. The more their bodies are under stress the more likely they are to fail.

I think we will see the same on the downside of the curve, with societies taking the place of individual climbers. A few "climbers" may make it down (missing the required fingers and toes). But the whole story won't be available until we reach base camp again (sustainable energy use).

Perhaps solar or nuclear will help us navigate the descent...

I'm not staking the descent of my family upon that anchor, however.

[MrBill]

$this->bbcode_second_pass_quote('Revi', 'M')ost people in the US don't live anywhere near any public transportation, so unless they sell their houses they are stuck with their cars as transportation. There is no alternative to driving around. They will have to switch to a more efficient car, but they won't move towards a place that makes sense for a while. The real estate market is tanking, so they couldn't sell their houses for a good price anyway. I don't know if that makes gasoline a giffen good, but they are stuck with buying it for quite a while.

[wisconsin_cur]

$this->bbcode_second_pass_quote('MrBill', '
')
It may be a Hill Billy future? But some of us have already been there and got the wood stove and distillery out back to prove it! ; - )

[MrBill]

wisconsin_cur wrote:
$this->bbcode_second_pass_quote('', 'I')n the comfortable days before I knew what "light sweet crude" was or why it mattered, I spent my free time rock climbing and my pleasure reading were backpacking and mountain climbing tales.

[Revi]

I agree, Mr. Bill, that the homes of the upper class always turn into the multi-family apartments of the poor. Middle class neighborhoods hold up better. Suburbia will be the home of the poorest people who commute the furthest soon. Like the "colonias" that ring Latin American cities, the collectivos will pick up the workers and deposit them in the center of the cities. It won't be so bad, really.

I've been taking the bus a lot lately and I've discovered that it already exists in the US. There is a huge group of people who take the bus and live around the big cities without cars.

Out here in the boonies there are fewer people without cars, but there will be more and more soon. It's time to make a change. What choice do we have?

[jbeckton]

$this->bbcode_second_pass_quote('MrBill', '
')Not only that, but previous exporters, who helped to contribute the front end of the slope of supply, are now going to be net importers or users of petroleum. Often with rising incomes, larger populations and increased expectations.

[MrBill]

$this->bbcode_second_pass_quote('jbeckton', '')$this->bbcode_second_pass_quote('MrBill', '
')Not only that, but previous exporters, who helped to contribute the front end of the slope of supply, are now going to be net importers or users of petroleum. Often with rising incomes, larger populations and increased expectations.

[jbeckton]

$this->bbcode_second_pass_quote('MrBill', '
')Yes, we may still find more oil, but only a) at a higher cost per barrel; b) generating a lower EROEI; and c) generating less economic output per unit of input as production costs rise and conversion efficiencies decrease (i.e. less ying per yang).

[threadbear]

$this->bbcode_second_pass_quote('wisconsin_cur', '')$this->bbcode_second_pass_quote('MrBill', '
')
It may be a Hill Billy future? But some of us have already been there and got the wood stove and distillery out back to prove it! ; - )

[kadoomsoon]

$this->bbcode_second_pass_quote('jbeckton', '')$this->bbcode_second_pass_quote('GreyGhost', '
')Yes that makes sense. Or, on a larger scale, if we have less energy available for activities like building nuclear reactors (which are "discretionary" compared to, say, eating), so we don't build them and end up needing to consume more fossil fuels.

[roccman]

$this->bbcode_second_pass_quote('jbeckton', '
')
You do understand that there is still one drop of oil left for every drop we have ever extracted right? The developed nations will be able to afford oil long after peak. Power producing projects will be one of the top priorities for oil use after food.

Peak oil will push nuclear power, not stop it.