by yesplease » Sun 27 Sep 2009, 17:57:27
$this->bbcode_second_pass_quote('shortonsense', 'I') certainly don't know. I do like "demand creation" though, thats a good one. I wonder if thats even possible for crude when faced by the onslaught of Insights, Prius's, Volts, Smartcars and some of us starting to take a bus to work? In this country anyway, I suppose whatever supply we free up will find its users somewhere else until they get into the same "electric transport is better than ICE powered transport" bent that we are slowly learning, a hybrid at a time.
Elasticity of demand applies to both increases and decreases in consumption, while demand destruction only applies to decreases in consumption. We clearly have both, but I haven't seen anyone post about demand creation. Again, yay for groupthink? ;^)
OECD's price elasticity of demand appears to be quite high, so while Chindia will probably continue to gradually increase oil consumption, if there are greater cuts in consumption they will likely be from OECD due to higher prices, possibly from breakthroughs in alternative vehicle commoditization, although that's probably a couple decades away IMO even though suitable battery tech is here now.
I also don't buy the whole, whatever OCED doesn't use someone else will as a lemma. The real world doesn't work like that since OPEC has enough production to set prices. Normally, if we cut oil consumption, then price drops, and consumption increases a bit because price dropped. IRL, since OPEC as a cartel can stabilize price, if we cut consumption they cut production and price stays where it is. Since there's no decrease in price, there isn't a rebound in consumption typically seen w/ unreguated commodities.
$this->bbcode_second_pass_quote('Professor Membrane', ' ')Not now son, I'm making ... TOAST!