[energyhoggin]

I know the financial markets dived for several reasons but how much of an impact did high energy cost have on the economy? A lot of people are certain that the price of crude will go up astronomically for a long time, i don't see this happening because the world will not be able to afford such high energy cost. In my opinion the economy and the price of oil will hover at a median price till there is virtually no oil left. When the price of crude reaches a high it will be brought down by a slide in the economy to a lower level but nominally higher than it once was. My question is, at what level will it become critical for survival?

[TreeFarmer]

I have been thinking along these same lines myself. Assuming the US$ does not take a big hit, oil probably can't get to $200 or if it does stay there very long.

Like you are thinking, that price would choke off a tremendous amount of economic activity and thus reduce demand.

At the current time I see us going through a lot of big price swings.

TF

[NoWorries]

Frankly I don't think the economy could sustain $100 /bbl right now, much less $150.

I think the breaking point is around $100-$110, in the absence of recession. Anything much above that for 6+ months and the economy returns to recession territory.

[Caffeine]

I would expect economic collapse if oil were to go to $200 and stay there.

Not necessarily civilization collapse, though.

[gnm]

$this->bbcode_second_pass_quote('NoWorries', 'F')rankly I don't think the economy could sustain $100 /bbl right now, much less $150.

I think the breaking point is around $100-$110, in the absence of recession. Anything much above that for 6+ months and the economy returns to recession territory.

[rangerone314]

Can diabetics afford more expensive insulin? Can drug addicts afford drugs?

I'm not sure we want to live in a world that CAN afford $200+ a barrel.

[TreeFarmer]

We could just stay in a permanent recession which alternates between mild and severe. Occasionally we might be out of recession only to fall right back into recession. If this is the case, expect it to continue until we either have substitutes for most of our oil needs or we just give up.

It is not that life has to be horrible in a long-term oil based recession but, it would almost surely be a life with limited luxuries.

TF

[rangerone314]

$this->bbcode_second_pass_quote('TreeFarmer', 'W')e could just stay in a permanent recession which alternates between mild and severe. Occasionally we might be out of recession only to fall right back into recession. If this is the case, expect it to continue until we either have substitutes for most of our oil needs or we just give up.

It is not that life has to be horrible in a long-term oil based recession but, it would almost surely be a life with limited luxuries.

TF

[nobodypanic]

NO.

why? in my opinion, we have empirical evidence that it couldn't afford $140.00 oil, so no way it can deal w/$200, assuming we normalize to '08 dollars.

[mos6507]

The world couldn't afford this:



Whether it could afford $140 oil or not with no other polluting factors is hard to say. Obviously at certain inflection points life has to change. It doesn't necessarily mean skipping immediately to zompocalypse.

[nobodypanic]

$this->bbcode_second_pass_quote('mos6507', 'T')he world couldn't afford this:



Whether it could afford $140 oil or not with no other polluting factors is hard to say. Obviously at certain inflection points life has to change. It doesn't necessarily mean skipping immediately to zompocalypse.

[Schmuto]

200 dollar oil - economy in depression, maybe TEOTWAWKI.

300 dollar oil - TEOTWAWKI

[Novus]

Here is the conundrum of peak oil:

The cheap oil is gone so the oil producers need high priced oil in order to keep pumping. At the same time our economy can only support no more than a moderate price of oil. That price is about $70 to $80. Anything more than that and you get severe economic destruction which leads to oil prices readjusting downward. As posters like Oil Finder like to point out there are ten Saudi Arabias on the bottom of the ocean but it doesn't matter because we can't afford to drill for that oil. At some point the moderate priced oil will run out just as the cheap oil ran out. If we cannot figure out how to pay for the $200 oil of the future then it is TEOTWAKI.

[MonteQuest]

$this->bbcode_second_pass_quote('TreeFarmer', 'W')e could just stay in a permanent recession which alternates between mild and severe.

[MonteQuest]

$this->bbcode_second_pass_quote('rangerone314', ' ') I'm not sure we want to live in a world that CAN afford $200+ a barrel.

[mos6507]

$this->bbcode_second_pass_quote('nobodypanic', '
')in my opinion that was caused because we tried to extract more wealth from our economy than she could deliver due to, in some large part, energy constraints.

[mos6507]

[snip]

[MonteQuest]

$this->bbcode_second_pass_quote('mos6507', '')$this->bbcode_second_pass_quote('MonteQuest', '
')Before people will starve or go thirsty, they will stop consuming other things.

Same with energy.

What would you stop buying to afford $10 a gallon gasoline to get to work?

[mos6507]

$this->bbcode_second_pass_quote('MonteQuest', '
')Makes my point either way; demand from some source will keep prices high.

[nobodypanic]

$this->bbcode_second_pass_quote('mos6507', '')$this->bbcode_second_pass_quote('nobodypanic', '
')in my opinion that was caused because we tried to extract more wealth from our economy than she could deliver due to, in some large part, energy constraints.