by smiley » Mon 19 Jul 2004, 11:40:38
$this->bbcode_second_pass_quote('', 'H')ow much does gas have to increase in price to collapse society, and once past peak, how fast will prices rise?
I dont think prices will rise fast enough to collapse society, cause a huge reccesion???
The first price rise will occur pre-peak. When the oil production starts to level-off in anticipation of the peak, the production falls behind demand. This will cause a gradual price rise. When the production actually starts falling we’ll get a second much sharper price rise.
In order to assess how that is going to damage the economy, we have to look at the shape the economy is in now. As I look across the board many indicators are flashing dark-red for the USA.
Firstly there is the debt position of the consumers and the government.
Secondly there are the various bubbles like the inflated house prices.
Thirdly there is, what some call financial weapons of mass destruction, like derivates. Much of the money like your savings, your pension, is locked in incredibly risky financial constructions like derivates, which could evaporate in minutes.
And finally there is the danger in the debased currency. A gold backed currency is hedged against strong changes in value. No longer backed by gold the value of the dollar is determined by speculation.
Greenspan and the American economy are walking on a financial knife-edge. The American economy (and thus the world economy) is much more susceptible to an oil shock than it was ever. The greatest danger lurks in the possibility of a dollar crash. History tells us that when this happens the possibility exists that you’ll be paying your coffee with million dollar bills in a few years time.
It would be very hard or even impossible to work on alternative energy solutions amidst the chaos of a strong depression.
It is impossible to tell how much the oil price needs to rise to bring this scenario about for it depends as much on the reaction of the speculators as it does on the real oil price. Personally, I think that a fast $20 price rise will bring us in very dangerous territory.
Of course this doesn’t have to happen. I’m an optimist not a doomthinker. But being an optimist doesn’t mean that you have to close your eyes to reality. The things I just described constitute a real and present danger.
To avoid it we should get our house in order and start preparing for peakoil now. If you look at the tasks ahead it appears that, the time to prepare is short, even if the peak occurs in 2035.
$this->bbcode_second_pass_quote('', 'G')as isnt going to just triple in price one day. And even if it did, 6 dollars a gallon gas isnt that expensive. Not expensive at all considering coffee at starbucks is 4 dollars and in some other countires it already cost that much.
Remember, you’re also paying for the oil needed to grow the coffee, for the gas that’s needed to roast the coffee, for the plastic that’s needed to pack the coffee, for the oil that’s needed to deliver the coffee to starbucks, for oil that's needed for the plastic beaker, and for the oil that’s needed to drive that nice girl that’s serving you that coffee to and from her work. What do you think that will happen to the price of your cup of coffee when the oil prices double?