[MattSavinar]

$this->bbcode_second_pass_quote('MattSavinar', '')$this->bbcode_second_pass_quote('Yamaha_R6', 'I') really dont like it when you keep saying that I am too uneducated to be worth the time. You should know I am not uneducated and even if i was i would still be inteligent. If you were able to present facts on why the gas prices will shoot up so quickly as to collapse society, I would listen and be able to understand them, but you havent so oh well.

Someone asked what I based my assumption on that gas prices will rise slowly. I have to ask you what you based your assumptions on that they will rise quickly, and respond by saying the government understands how important energy is to our economy. If we are in serious trouble, I don't doubt for a second that Bush would use his dictator like power to regulate the gas prices by forcing us to conserve. Rationing is a possibility, larger rebates on economy and hybrid cars, more tax on gas hogs. Factories can switch to electric machines instead of gas powered ones.

A lot of you argue that once we go into a recession, that it will be near impossible to make alternative energy sources viable. Need i remind you Mr. Bush has the whole army core of engineers, controll over the most powerfull military in the world, and unlimited amounts of "money" to do things. Even if the value of the dollar falls to nothing, If Mr bush tells the nation to start building now as an effort to save the economy, and he took what gas that we had left pumping and reserved it all as government property to be used for the construction of new infrustructure, we would see action unlike anything before. We might have to nationalize certain essential undustries, we might have to use are military to run the factories to make energy alternatives... after all the enlisted men are slaves to bush....

But we have the ability to create whatever we can dream. Even long after peak we will still have lots of oil... once the government nationalizes it they can use it as they see fit, and the gas is almost free as there is no market for it since the government controlls it. The government isnt going to roll over and die, if people in power know anything its how to stay in power. And for whatever reason Americans love to do what bush wants.

I honestly believe the vast majority of Americans would go work for the government for free if that is what was desperatly needed and Bush called upon us to do it. You people view Americans in generall as animals, which is true for some of us, but we have proven again and again to overcome all obsticals. I see no reason why this wont be solved without people in America dying.

[Itch]

$this->bbcode_second_pass_quote('', 'M')y family has 3 cars that get less then 25 miles to the gallon average. I would ride my motorcycle which gets 40 miles to the gallon, and the other 2 cars would be replaced with a modern economy car. BIG WHOOPDY DO. Poor me I will have to drive a Mazda 3 series instead of a ford Ranger.... this must mean the end of the world....

[Pops]

"That whole thing about gas going up 20x-50x is absolute crap."


And your evidence is?

[Yamaha_R6]

My evidence is... people wont pay that much for gas. If gas was 20 times more expensive... aka 40 bucks a gallon, I would bike to school. Its 6.7 miles away... and would take me a good 40min to get there, but thats a lot better then throwing away my money. And 50x that... aka 100 dollars a gallon... wouldnt make a difference to me if gas at the pump costs that much... cause once it goes past 20 bucks a gallon i am not driving anymore... forget it.

Fellow americans would feel the same way... we would just stop buying gas at those prices because we cant afford it, doesnt matter if we loose our job, the gas costs more then the job pays. What happens 2 days after nobody is buying gas..??? then they have to much gas and have to lower the price to make it sell.... HENCE... gas could never cost more then what people are willing to pay... i would say right now people would pay 8 bucks a gallon for gas.. if it went past that... you would see MAJOR conserving.... People would just stay home and spend time with their families 2-3 days out of the week. Even if we were many years past peak... if everyone stayed home 3 days a week.. and only used their hybrid car for only essential purposes on the other 4 days... gas would still only cost 2 dollars a gallon because we would have so much...

THIS COULD ACTAULLY HELP THE ECONOMY. because this means everyone is shopping at once... hence the stores make more money because they sell the same amount of goods but have to pay less labor and have less expenses. If stores make more money.. they can pay their employees more per hour. Efficiency is good for everyone... none of this open 24 hour 7 days a week shit. Think how much energy is wasted just keeping these stupid stores open just so 3 people can walk in during the middle of the night to buy a petrol burger... what a waste.

[MattSavinar]

$this->bbcode_second_pass_quote('Yamaha_R6', 'A')LSO.. you should tell a doctor all this, its not an insult, i dont care if you are obsessive or not, I am not trying to question your inteligence or logic... i just think you are obsessive. And you problebly are... admitt it... you have been obsessing over all this for a looong time now... you are unable to get over it. The worst thing is you use logic to justify why you cant get over it. Your thinking is the end of the world is here... must tell others..... must survive.... so how can you just drop it..... I dont know... maybe i doctor can tell you.

[MattSavinar]

$this->bbcode_second_pass_quote('Yamaha_R6', 'M')y evidence is... people wont pay that much for gas. If gas was 20 times more expensive... aka 40 bucks a gallon, I would bike to school. Its 6.7 miles away... and would take me a good 40min to get there, but thats a lot better then throwing away my money. And 50x that... aka 100 dollars a gallon... wouldnt make a difference to me if gas at the pump costs that much... cause once it goes past 20 bucks a gallon i am not driving anymore... forget it.

Fellow americans would feel the same way... we would just stop buying gas at those prices because we cant afford it, doesnt matter if we loose our job, the gas costs more then the job pays. What happens 2 days after nobody is buying gas..??? then they have to much gas and have to lower the price to make it sell.... HENCE... gas could never cost more then what people are willing to pay... i would say right now people would pay 8 bucks a gallon for gas.. if it went past that... you would see MAJOR conserving.... People would just stay home and spend time with their families 2-3 days out of the week. Even if we were many years past peak... if everyone stayed home 3 days a week.. and only used their hybrid car for only essential purposes on the other 4 days... gas would still only cost 2 dollars a gallon because we would have so much...

THIS COULD ACTAULLY HELP THE ECONOMY. because this means everyone is shopping at once... hence the stores make more money because they sell the same amount of goods but have to pay less labor and have less expenses. If stores make more money.. they can pay their employees more per hour. Efficiency is good for everyone... none of this open 24 hour 7 days a week doo doo. Think how much energy is wasted just keeping these stupid stores open just so 3 people can walk in during the middle of the night to buy a petrol burger... what a waste.

[Yamaha_R6]

^^^^ no.... fertlizers will be cheap because we will have SO MUCH gas, because nobody is buying gas because it is to expensive. DO YOU UNDERSTAND THAT GAS WONT SELL FOR THAT MUCH. whrether or not you believe it... as price increases.... demand decreases.... look what happened when gas went up 50 cents during june. SUV sales were drastically hurt. Gas only went up 50 cents and people responded by buying more fuel efficient cars. Those drivers are going to use LESS gas now. The price increase has caused there demand to drop.

I dont understand what is so hard for you to understand here. You all act like the demand is some rate that we dont have control of.. we do have control.

ALSO, I dont mean to tell you that you are mentally ill (I dont consider obsessive personalities to be seriously mentally ill) , I dont think you are a lier, you have convinced me that you really do believe this stuff.
I DO think you are just plain and simply wrong.

I think you miss-judge the power of supply and demand to balance themselves. I think you underestimate alternative energies and our ability to implement them. I think you miss-judge Americans' ability to cope through hard times. I think you miss-judge our resolve to push onward and upward. You majorly miss-judge our ability to conserve if that need be.

And most of all you miss-judge the rate at which gasoline prices will increase and the time we will have to react.

[MrPC]

$this->bbcode_second_pass_quote('Yamaha_R6', 'D')O YOU UNDERSTAND THAT GAS WONT SELL FOR THAT MUCH. whrether or not you believe it... as price increases.... demand decreases.... look what happened when gas went up 50 cents during june. SUV sales were drastically hurt. Gas only went up 50 cents and people responded by buying more fuel efficient cars. Those drivers are going to use LESS gas now. The price increase has caused there demand to drop.

[azreal60]

Thank you guys for moderating yourselves so myself or someone else did not have to. I would agree that matt qualifies as an obsessive. However, I would also agree that his obsession is for a good cause, and as long as it is not causing him physical and mental harm, I would say keep up the good work.

Remember, attack the idea not the man or woman. I intend to become a bit more mean about bumping stuff to the hall of flames if i see posts that are basically personal attacks. Attack matts idea s all you want, and be prepared for a counter assault. But if your flaming, it better be in a place designated for flames.

With that out of the way, let me say this. Yamaha obviously has a classical economist education, because his arguments do make a certain amount of sense. However, they are grounded in the classic economics, which is simply not as firmly based in physical reality as its teachers would like to admit.

The simple fact is, you will pay more for that gas because you will have NO CHOICE. You are very very well suited for a peak oil situation in that your job and school is less than ten miles away. A Huge proportion of america no longer lives like that. They commute in some cases up to 70 miles to work each morning. Heck longer than that, but that is the longest average distance i hear from friends. In addition, america s good s distribution system relys almost totally on the long haul trucking industry. If that takes a hit, you are literally going to see lines at the grocery store. Not because we are not producing enough food, but because there are not enough trucks with gas to get it to its destination. I used to be really worried about food production in the US till i realized that we do not need the huge surpluses we produce of food to feed ourselves. What we Have made our selves dependant on is the ability to transport that food across the country and from around the world.

Another point made well by Mrpc is technological lag. It takes time for things like hybreds to get into the market in any numbers. Time we may simply not have.

And the worst point of all is the fact that when america s start feeling the pinch enough that they will alter their habits on their own, it will be too late. If none of you have read the book Ishmael by Daniel Quinn I would reccommend it HIGHLY. I especially like his analogy of how you boil a frog. Hint, human society is the frog, and how we live is the fire.

[OilBurner]

Out of interest, I modelled increasing fuel prices on my own personal situation to see how it might affect my own demand.
This is obviously little more than indicative, but interesting all the same.
I worked out that pump prices could increase from the current of $5.60 a gallon (I'm in the UK) to around $11 a gallon before we'd have to seriously cut back on our demand.
At that point we could only use the car for getting to work and the local supermarket.
If prices then increased above $16 a gallon then I'd have to cycle or walk to work (my wife is too far away from work to do that).
We could then stomach increases up to $28 a gallon before we'd really be stuck.

If you take into account the effect these kind of prices would have on the economy, I suspect one or both of us would be out of work before we got to the point where we couldn't afford fuel or groceries. That would also cut back on our demand.

There is a clear reduction in demand going in there from as little as a 2x increase in pump price. That must be somewhere in the region of an $80 bbl increase from current prices before we'd be hit.

Now let's say that prices recover to previous levels because the demand has been reduced, guess what, we'll increase the number of miles driven in line with what we can afford - pushing the price back up again. As long as supplies are constant or improving then the prices will be stable or lowering, drop the supplies and demand will be reduced but prices will still shoot upwards as people push against the limits.

Each persons situation will vary, some will be hit harder than others. The overall picture is that I think demand is likely to decrease quite a lot before oil ever gets to 20x or 30x current prices. That in itself will help control the speed of increases in oil prices but will not bring prices down without additional supplies. There will be some overshoot in each phase of demand decrease where prices will drop a little, but the overall trend will be upwards, slowly but surely. Demand will just recover to previous levels if the prices drop, so the situation cannot improve.
The answer I think is that demand will be constrained but only in line with supply and so the price cannot be controlled by reducing demand unless the demand decrease outstrips the supply decrease.

Driving is often referred to as an activity where people will continue regardless of cost. Realistically, I feel there is a limit and the activity is only elastic as long as people can afford it. Once that threshold is breached then a reduction in demand is the only possible outcome.

[Leanan]

As prices increase, there will be attempts to conserve. But judging from what we've seen so far, it won't be enough. Gasoline has almost doubled in price over the last year or so. But demand is at a record high.

Sure, people are trying to drive less, and are buying more economical cars, but it's not enough to offset the natural growth in demand.

About the only ones buying less gas are teenagers. In many areas, they no longer cruise around at night, because they can't afford it. And some quit their jobs, because they don't earn enough to pay for the gas to get there. But teenagers can afford to do that: they're still living with mom and dad. Most of the rest of us have no choice but to pay.

[OilBurner]

Is there really any evidence that teenagers are giving up their jobs because of gas at $2 a gallon?

Let's say that Teenager X has a car that does 25mpg and has a 12.5 mile trip to their workplace and pays exactly $2 a gallon.
They work for 6 hours on a Saturday for $5 a hour - total income $30, total fuel cost $2. Net profit - $28.
Since teenagers have no rent or bills to pay, I'd suggest that fuel prices would have to go pretty high to put them off.

I would be surprised if anybody has given up their jobs when fuel is still so relatively cheap.
If you were paying $10 a gallon then I think you may be on to something.

[Leanan]

$this->bbcode_second_pass_quote('', 'I')s there really any evidence that teenagers are giving up their jobs because of gas at $2 a gallon?

[OilBurner]

Surely teenagers wouldn't pay taxes? I've no idea about the US, but here in the UK you have to earn a fair bit of cash before you get taxed on any of it.
Also, here it's very normal to work Saturdays or Sundays only - especially in Fast food joints and Shops.
Even so, using your figures:
10x 30 mile journeys at 15mpg using $2 fuel = $40.
5x 3 hour days at $5 an hour = $75.

You're still making money. I'd also expect that a lot of teenagers drive smaller more efficient cars because of insurance reasons - that's certainly the case here.

Looking at those sums, you'd have to be driving a very long way with a very thirsty car to make it more trouble than it's worth?
After all, what did gas used to be recently? $1.20 or something like that? In the example above that would have meant $16 loss out of the teenagers pocket. Hardly enough to jack in the job.

I'm sorry if I don't sound sympathetic but it really isn't that much of a hardship!

The funny thing is, we seem to be arguing each others cases!! You're suggesting demand is dropping and I'm arguing it isn't yet (but it obviously could) and that's the opposite from where we started!! :D

[Leanan]

$this->bbcode_second_pass_quote('', 'S')urely teenagers wouldn't pay taxes?

[OilBurner]

That seems so weird to me. Insurance on cars with engines bigger than 1.4L for under 25s is just astronomical here in the UK. I've heard of people getting quotes for annual insurance of £1000 UKP for a 1.0 VW Polo...
Even at my age (29 how did that happen!!??) and with an altogether satisfactory income, I can't afford to insure a car with a 2.5L V6 engine, let alone fuel it!!
Perhaps the hypothetical American teenager needs to take a leaf out of the European book and try a moped instead!

[Leanan]

$this->bbcode_second_pass_quote('', 'T')hat seems so weird to me. Insurance on cars with engines bigger than 1.4L for under 25s is just astronomical here in the UK.

[Leanan]

P.S. My car has 3L V6 engine. In British currency, my insurance bill would be about 200 pounds a year.

[Mower]

$this->bbcode_second_pass_quote('Pops', '�')��Everyone ASS U ME S that price is going to just sky rocket…
Gas isnt going to just triple in price one day.”



Perhaps you could tell us the basis for your assumption that it won’t.

[Carmiac]

I've been following this for a few months now (from a few very different IP's if the admins are going to look it up yadda yadda introductions, etc...

Anyway, I think Yamaha_R6's initial point is very good, but allow me to state it in a slightly different way that should be a little easier to analyze:

The rate of depletion of oil production versus the elasticity in demand will determine how severely our economy is hurt, the time we have to transition to a non oil energy source is more important then the actual change itself.

OK, so now we can try to put some numbers to this.

First, the easy one. Colin Campbell suggests a depletion rate of about 2 - 2.5% annually. This seems good enough to me, as I am an astronomer, not a geologist.

Next, the hard one. How elastic is the world use of oil? As Oilburner just stated, along with many others, there is definite elasticity in personal use. Unfortunately oil use is not just on a personal transport level. So, I would like to present this graph as a step in looking at demand elasticity.


No I know it is a bit out of date. I have seen a more recent one, but can't seem to find it at the moment.

Looking at this, North America, really the US and Canada, uses almost twice as much oil per person as Europe. IIRC the US also uses about 25% of the world's oil. If they were to drop to European usage that would free up about 12% of the worlds oil use. But Europe could also probably reduce its oil use by some small amount without too much trouble. And when things get really tight it should be possible to drop a few percentage points points more before a complete collapse.

Looking at this, we would seem to have about 10 years from the peak to the point that production drops below the elasticity in demand.