[RIPSmithianEconomics]

As you are probably aware, oil could be peaking now (and at 80 million barrels a day, it looks like it) but we wouldn't/aren't feeling the affects, at least, not in the "SHTF" scenarios. However, continuing the Peak analogy that has become almost a cliche, what happens mentally on the downside?

There seems to be two different schools on this. One is the optimistic school, which see a wide-scale organized attempt by the goverments of the world to lower oil consumption whilst simalteneously endorsing oil in alternatives. This mindset could be compared to the mindset of a person at a place in the UK where people are giving blood. There is no prizes for attendance other than a fuzzy warm feeling inside. However, the situation is different. These British blood-donors are being asked to give enough blood to leave them in a critical condition, and will have to wait to be given blood themselves. All week, they have been instructed to lower their consumption of proteins. And yet, they have utter faith in this system. I think you can see why I regard this as the optimist school.

The other is the pessemist school, which is synonimous with the panic school. This school envisions a wide variety of scenarios varying from stagflation and economic depression to war and possible nuclear holocaust. In all scenarios however, one psychological condition is present: panic, self-centeredness and a distrust of the goverment.

This is a theory, and it must be disproved.

Discuss.

[Itch]

I don't think it's very accurate to group a bunch of people only in two groups. There are optimists on one side, and pessimists on the other, but in between that are many different thoughts, feelings, and strategies that people are experiencing.

I'm very pessimistic on how industrial societies and the general peasantry will react to expensive energy, but I'm optimistic of the future of surviving humans once the planet's load of humans is lightened up.

They may reach complacency at some point in the future, but they will have many visible remiinders of what complacency or greed leads to, so maybe they'll be a bit smarter. Who knows.

[Mower]

Human nature says we will collectively panic and even then when it is too late.

[gnm]

I would add that history would also indicate that we will do too little too late...

-G

[RIPSmithianEconomics]

I didn't say there were only two groups, I said there were two schools. Within these schools, particularly within the pessimistic one, there are a lot of different views on just how the dieoff will manifest itself. I suppose you could say that the optmistic school tends to have less variety of opinions of what will happen because a happy outcome relies on pooling just about every option. The psychological condition such a pooling requires has occured in history- it seems that, provided they see something to gain, people will be willing to make huge sacrifices. Just look at the sacrifices of the British in World War II or ze Germans in World War I.

[syncrude]

Initially, I was in the pessimistic school, but now I am in the optimistic school. I guess it is my belief in humankind and ingenuity. Or maybe just naïve?

The reasons why I am no longer a pessimist is because I don’t believe the peak will drop off as fast as, say, the drop off a peak that happens in a country setting. Peak will occur but it will be drawn out a lot longer than people here are suggesting.

It all comes back to price. When the US or the UK peaked, the world price of oil stayed constant so there was no incentive for producers to spend more money going after the “hard stuff”. It just does not make financial sense. Therefore you get these nice bell shaped curves.

As a producer, it would have been financial suicide to produce “expensive” oil in the US or the UK after the cheap stuff was gone given that the Middle Eastern suppliers could potentially flood the market with cheap oil. So investors stayed clear.

Now, even though the price of oil is high, nobody really knows why it is so high. There is much speculation. It could be due to security fears. It could be due to supply constraints. If you are an oil company, you have to ask yourself, can I expect $40 oil for the next five years? That is a huge incentive to go after the “expensive” stuff.

On the other hand, are the markets out of whack? Is the price high due to security fears? If it is, and if the situation in Iraq and Saudi Arabia is stabilized in a few years, the security premium will be gone and accordingly the price of oil will collapse. This may be wishful thinking, but if you are betting on multibillion dollar projects, you better be certain.

However, if prices stay at this level for a significant period of time, I think you will see a flood of new investment around the world like you have never seen before. Oil exploration start-ups will pop up everywhere. And the funding will be there too once the price certainty is established.

Still, this does not take away from the fact that oil will peak. But once the markets and governments realize that the high price is not due to a security premium, they will act appropriately. Rations, massive investment in R&D, conservation efforts etc…

Will it rattle the economy? Of course, but it will not be the same kind of oil shock as the world saw in the 70s. This is not a complete stoppage of the flow of oil by a group of countries. This is a slow depletion with the price reacting accordingly. I think that is what people are forgetting here. We are not going from 80 million barrels a day to 65 million barrels a day overnight. It will take time.

[Merlin]

$this->bbcode_second_pass_quote('syncrude', 'W')e are not going from 80 million barrels a day to 65 million barrels a day overnight. It will take time.

[RIPSmithianEconomics]

The problem is, Syncrude, there is no up. If Peak Oil was just a matter of coping for 10 years, and then things get "normal", then everything would be fine. The problem about the Peak is that once you've peaked, by definition you cannot get any higher.

[ish]

I'm on the fence. The outcome could vary widely from country to country, even state to state, depending on local conditions, access to excess alternative energy, public transportation capacity, locally grown food, local vs. corporate business mix, and OF COURSE rational political responsiveness.... some countries could be even now secretly planning to address PO (technically possible!!)

then it could get much worse if one country, say US, starts another oil war....

so the optimists and the pessimists could both be right, at least for a while. As others have stated, high population density countries and highly oil reliant countries such as US, India, China, could be much harder hit.

Anyone methodically looked at these factors (see above) country by country or state by US state?

[zed]

My personal response to peak oil has been something akin to acceptance. Like the mariner who is mortified by the approaching storm but keeps on sailing anyway. I was terrified when I first uncovered this subplot to world events and the likely ramifications of energy depletion. My terror has morphed to acceptance.

What this means is that my perspective has shifted to enjoying life in the 'rich society' and gaining a sense of perspective that everything I enjoy today may not be around in 20 (or even 5?) years. Certainly I now have an appreciation for what energy means to any civilization - something very few people in society posess. It still amazes me how so many smart people (including myself until recently) don't understand how closely energy is tied to prosperity and economic growth. People believe energy is just another technological problem to be solved. "Hey we put a man on the moon!"

With that said, I don't think the realization of the true meaning of energy shortage will sweep the land until some kind of undeniable event forces it - meaning a disaster of some kind. Most likely a disaster that never seems to stop getting worse. By this time, all bets are off. Panic is a very likely reaction as people realize their hopes, ambitions, and dreams are being shattered with each passing day. Realizing their young children will likely not see the wealth they have known. Realizing their own survival may be jeopardized by privation or world war. In situations like this, it is impossible to predict what will happen.

This perspective is why I have not gotten very excited about planning for peak oil - no matter what you do, it will be hard to escape the hammer of the energy shortage. Is it more daunting to face the prospect of (a) bread lines and riots in a big city, (b) scavenging for sustenance in a small town, (c) toiling constantly for survival on a isolated farm, or (d) fighting WW3 on an oil patch somewhere? The only option I really like is (e) none of the above!

With that said my current approach is to go to the store and enjoy the fact that I can find whatever I need. Maybe watch a DVD and crack open a cold one! Knowing one day these things may not be possible. I will certainly make some lifestyle changes over the next few years but I believe the panic and chaos ahead will marginalize the value of most elaborate planning.

[Aaron]

$this->bbcode_second_pass_quote('', 'T')his is not a complete stoppage of the flow of oil by a group of countries.

[Yamaha_R6]

I firmly believe we will have a recession, but that will be the extent of it in first would countires. How bad of a recession? I dont know, but there will always be food to eat, It just might not be the food you LIKE to eat.

[mrexcessive]

Perhaps we can separate any expectations of how things will divide between Optimistim and Pessimism once Peak Oil bites into three subcategories of things which can be expected to react:

1. How will individuals react and feel ?
2. What about various special interest groups ?
3. What about Countries ?

In Summary:
Optimistic for People, Pessimistic for existing power structures

In a bit more detail (aka minor rant) :
1. Individuals
I suspect it will depend on each person's specific circumstances, whether they can still feed themselves, avoid worsening debt (and consequent loss of freedom), maintain their friendships... These are things which Epicurus tells us are ultimately important, or should be, to individuals.
Except where densely packed or unable to farm, oh dear for Cities and Suburbs , individuals and communities should be OK or at least able to adapt.

2. Special Interest Groups
They will probably try to maintain cohesion, e.g Corporate entities to continue trading, political entities to maintain influence.
The SIGs will cause hassle for individuals. E.g. Banks attempting to foreclose on loans... but SIGs should just be ignored if they compromise your happiness ! Bullies

3. Countries
Here is a big problem. The Government and related politicians will want to maintain their system of control . They won't really be able to... after all, if money can't buy you food but helping out with a community harvest can get you and yours fed then why bother with money any more.
If individuals stop caring about money then top-down Govt. is in big trouble.

I suspect that many Individuals and Communities can cope with a great deal and remain optimistic. Pessimistic individuals will be those whose world-view is shattered, so EDUCATE people, people!

SIGs will be pessimistic, and rightly so... If the pyramids of power are thrown up and land in a different arrangement they're all history.

Countries, well the people who run them, are probably not so much pessimistic as paranoid about losing power. Still that's why they like telling us all what to do and think so often and loudly ! We can safely ignore them, it's better than reacting to them... Think of it as ignoring a fractious child and only rewarding it with attention when it talks slowly, calmly and without trying to annoy everyone.

[Pops]

I think the optimism is related to ones belief in technology. Some believe “others” will save them – better cars, better nukes, better gov., etc. and tend to have a more optimistic view of the power of technology, while some believe they have to save themselves and tend to be pessimistic regarding technology fixing the problem.

While I’m fairly pessimistic regarding an effective combination of solutions to prevent huge economic problems, the cannibalism, MZB, etc. topics seem to be more than a little bit absurd and sophomoric. But as to my own personal outcome, I feel pretty optimistic.

I am however, right out in front of those “panicking” – if by panicking you mean actually taking responsibility for my families welfare and attempting to devise ways to be more independent. Not really a bad thing it seems to me, whether the future holds MZB’s or the Energy Fairy.

[tkn317071]

When I first studied this issue the optimists were the ones saying don't worry, there's plenty of oil, oil production won't peak for another 100 years! and the pessimists were the ones saying uh, no we only have a few years left to the peak.

Now, among the supposed "peakniks" we are again dividing into optimists (the peak will be soon but we'll have a slow ride down) and the pessimists (I need more guns!)

If peak oil "scares" people into trying new, innovative lifestyles, such as trying more cooperative, harmonious, ecologically sound, less materially consumptive lifestyles, then I see that as a blessing. So I guess that puts me into the optimist camp, but I will be glad to see the present way of life/social organization (haves and have nots, every person for him/herself, consumption of junk, watch t.v. till your brain is completely numb, etc.) fade into history.

[Itch]

$this->bbcode_second_pass_quote('', 'I') didn't say there were only two groups, I said there were two schools.

[Ben]

I don't think most people will EVER get it. Seriously. I think a lot of people here think it's just a matter of time before everybody wakes up and understands peak oil and then the stock market crashes and people start hoarding stuff. But articles have been in major media (National Geographic, Barrons, Wall Street Journal, BBC, etc. etc.) for months if not years now. Is anybody getting it yet? No. No one is.

People's brains just aren't designed like that. They seek SOCIAL solutions to everything, and thus view everything as a social problem. Instead of blaming depletion (themselves, really), they'll find someone else to blame, and REALLY BELIEVE that they are the cause of the problem. I think organized religion will become incredibly powerful again and many will view this as Armaggedon.

Seriously, if you asked people today what's the more important issue, robots taking over the world or oil depletion, most would say the robots. Because that's a SOCIAL problem -- robots taking my shit. Oil depletion there's no one to blame but yourself.

So I don't think you'll see either organization or panic. I think what you'll see is *sheer insanity*.

That said, I don't necessarily agree with the view of people who think that peak is necessarily the end of civilization -- this assumes fusion power will never be discovered. Which it very well may not. But it would have the potential to reverse peak and solve many of the problems on the planet. Over-population is still an issue and why I think a dieoff will almost certainly occur, but I don't see this as necessarily "the end".

[EnviroEngr]

A few housekeeping notes here quick and the show can continue:

There are two crossovers: 1) Self Assessment Poll, 2) Psychology.

The Self Assessment Poll is here ---> http://peakoil.com/fortopic375.html

The other Psych Thread is here ---> http://peakoil.com/fortopic311.html#9184

This Psych thread is more practical whereas the other one (9184) is more theoretical, containing speculative metaphysics. There is also an Anthropology thread ( http://www.peakoil.com/post6352.html+jeet+kune#6352 ) and a Sociology thread ( http://peakoil.com/fortopic353.html ) that get into these issues.

[satjeet]

So here is a different take on the matter - there will be within each group - pessimists and optimists - an alterate way of looking at things. This is the arising of yin within the yang, and yang within in the yin.

These uprisings within each camp will subvert the intent of the majority and seek connections surreptiously with the other.

[mrexcessive]

tkn317071 said $this->bbcode_second_pass_quote('', 'W')hen I first studied this issue the optimists were the ones saying don't worry, there's plenty of oil, oil production won't peak for another 100 years! and the pessimists were the ones saying uh, no we only have a few years left to the peak