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PRICE at which gas will finally cause panic and chaos

Discussions about the economic and financial ramifications of PEAK OIL

Re: PRICE at which gas will finally cause panic and chaos

Unread postby Heineken » Mon 16 Jun 2008, 08:30:00

$this->bbcode_second_pass_quote('BigTex', '')$this->bbcode_second_pass_quote('Heineken', 'I') see inconsistencies in some of your stated positions, Tex. That's OK. I have them too. Adjusting to doom is not a linear process.

Good post. Interesting list.


Hmm, tell me about the inconsistencies. I'm curious.

I try to keep my act coherent, so if I need to tune it, let's do it. :-D


You do not need to keep your Elvis act coherent (by which I assume you mean "consistent").

But, since you asked, I will just say that in some posts you're a doomer and in others you're considerably more hopeful. This goes not just to content but tone.

Some days the hips swivel in one direction; on others, in the other.

I feel the same conflict at times. It's a normal human response to some very bad news, no doubt.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby BigTex » Mon 16 Jun 2008, 08:30:22

$this->bbcode_second_pass_quote('MrBill', 'W')hat Europeans do have is fuel-efficient cars and transportation alternatives. Americans could too if they were not still in denial.


MrBill, I wonder if the U.S. could have the same fuel efficient fleet as Europe, even if we wanted to. Considering the number of diesel passenger vehicles in Europe, if the U.S. tried to make the same percentage of its passenger fleet diesel powered I wonder if it would not cause diesel prices to go up even more than they already have. I can easily see diesel selling for twice the price of gasoline if the ratio of gas to diesel end users got too out of whack.

Plus, the average flabby American simply needs a larger vehicle chassis to move that body mass around. The average European, with his leaner body mass, can get around okay in the smaller vehicles powered by the smaller power plants.

For example, this is a sub-compact that was very popular in Texas in the 1970s. This was about the smallest car that the average Texan could fit in, and it was tight.

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Re: PRICE at which gas will finally cause panic and chaos

Unread postby BigTex » Mon 16 Jun 2008, 08:38:10

$this->bbcode_second_pass_quote('Heineken', '')$this->bbcode_second_pass_quote('BigTex', '')$this->bbcode_second_pass_quote('Heineken', 'I') see inconsistencies in some of your stated positions, Tex. That's OK. I have them too. Adjusting to doom is not a linear process.

Good post. Interesting list.


Hmm, tell me about the inconsistencies. I'm curious.

I try to keep my act coherent, so if I need to tune it, let's do it. :-D


You do not need to keep your Elvis act coherent (by which I assume you mean "consistent").

But, since you asked, I will just say that in some posts you're a doomer and in others you're considerably more hopeful. This goes not just to content but tone.

Some days the hips swivel in one direction; on others, in the other.

I feel the same conflict at times. It's a normal human response to some very bad news, no doubt.


I perceive that disconnect as being a matter of tactics vs. strategy.

There is plenty that can be done tactically to mitigate unpleasant future scenarios. I am hopeful about the possibilities of thinking about these kinds of tactics.

However, I do not believe that there is a strategy that will allow us to avoid the unpleasant future scenarios. I am not hopeful that there is a strategy that will save us from our own poor decisions of the last 100 years.

That's sort of the way the hip swivels, as far as I can tell.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Heineken » Mon 16 Jun 2008, 08:45:56

$this->bbcode_second_pass_quote('mos6507', 'D')ecimation of a single industry has happened before. What happened to the buggy whip makers when cars took over in the first place? How about the makers of typewriters when computers took over? What tends to happen is the jobs lost in one sector pop up in a new or growing sector. There are going to be jobs for mechanics converting cars to electric, jobs for solar panel installers, jobs for people putting up windmills, jobs for people laying down tracks to restore rail lines, construction jobs lost to the housing crunch may be restored with people needing to retrofit their shoddy homes for energy efficiency. People just have to adapt. I went to college studying film production but I wound up making a career in the dot com space. I had to change with the times even without peakoil. That's the way it's been for a while now. It's generally expected that people have to be able to shift careers once or twice in their lifetimes.

Sometimes people just have such a negative vibe about peakoil that they can't comprehend the idea that the downward trajectory might not be as steep or as universal as their internal vision. It's not mutually exclusive. We can still experience zombie hordes and die offs but pass through transitional stages along the way.


Overall I disagree with these comments, Mos. They assume that we are infinitely adaptable.

This time it's different, and just switching jobs won't fix it.

This is not about the decimation of a single industry, as you said. We're talking about well-nigh every facet of economic activity, from agriculture to the zoology department at your local university. Oil runs through and connnects them all like a needle and thread.

All those "alternative" industries you list are to various degrees oil-dependent. And if not oil, then coal. What do you think locomotives run on, both in their engines and under their wheels? How will those solar-panel installers get to their job sites? What about their lunchtime---what will they eat and what will it cost? What about the long chain of manufacturing that produces finished solar panels?

Sometimes I wish the name of this website was not Peak Oil but Peak Energy. Because that's what we're really talking about. A decline in net energy availability for the first time in human history.

Wait until we hit Peak Electricity. Coming soon. Then people won't talk so carelessly about electric this and electric that.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Mon 16 Jun 2008, 08:49:02

$this->bbcode_second_pass_quote('BigTex', '
')There is plenty that can be done tactically to mitigate unpleasant future scenarios. I am hopeful about the possibilities of thinking about these kinds of tactics.


Personally, I'm more hopeful about taking action on these kinds of tactics, not just possibly thinking about them. I don't see a whole lot of value in possibly thinking about doing something, beyond a certain point. I believe - and this is just my opinion - we really need to actually do something.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby vision-master » Mon 16 Jun 2008, 08:50:37

$this->bbcode_second_pass_quote('Ludi', '')$this->bbcode_second_pass_quote('BigTex', '
')There is plenty that can be done tactically to mitigate unpleasant future scenarios. I am hopeful about the possibilities of thinking about these kinds of tactics.


Personally, I'm more hopeful about taking action on these kinds of tactics, not just possibly thinking about them. I don't see a whole lot of value in possibly thinking about doing something, beyond a certain point. I believe - and this is just my opinion - we really need to actually do something.


But, what?
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Heineken » Mon 16 Jun 2008, 08:54:11

$this->bbcode_second_pass_quote('MrBill', 'W')hy do so many posters state or assume that Europe is some tiny place where people do not need to drive farther than in the USA? Just because they have invested in public transport does not mean they do not have roads and freeways. People still drive.


Did I say Europe is a tiny place? Who did?

I lived in Austria for five years. We had a car, but it was just for fun.

However, I'd hasten to add that I don't think Europe is immune to the consequences of PO (or GW, for that matter); far from it. Also, despite its sophistication, Europe has a big fat environmental footprint.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby MrBill » Mon 16 Jun 2008, 09:15:58

Dunno BT? I think the Dutch are some of the tallest people in the world? And the Anglo-Saxon disease is not confined to N. Am either. To me an Audi A4 combi has about the same inner room as a full-sized SUV just less clearance, so better mileage and handling. Certainly, the A6 has as much room. Clearance is great off-road, but as we know 90% of the SUVs are on-road about 90% of the time.

Even with a 2.0 liter, 4-cylinder engine with a manual 5-speed transmission I never felt under-powered. Now 6-speeds are coming out. People here tow big boats with very small SUVs like Suzukis. And not everyone needs a vehicle large enough to tow a boat. I think it is just perception? I saw a VW ad the other day. Their whole fleet (incl. the cross-over SUV) gets at least 100-km per 6-liters max with some models under 5-liters per 100-km. That is at least 39/40 miles to the US gallon. That is including gasoline and diesel engines.

But in any case the point is probably mute at this time in any case. The N. Am auto industry is moving so slow that we are not likely to see a dramatically different fleet until it is far too late to conserve our way into the transition period. That needed to have happened over the previous decade already. The same for building railroads. Too little too late to avoid a painful transition.

Ironically, GM (Opel), Ford and Chrysler are building good, fuel-efficient cars in Europe, while European manufacturers stick gas thirsty 4.0 liter engines in their N. Am models. Just plain dumb! Successful marketing is shaping public opinion NOT giving the customer what they THINK they want! And in any case customer tastes can change a whole lot quicker than the car companies can react with new models. Hummer today, Honda tomorrow!
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby mmasters » Mon 16 Jun 2008, 10:01:39

$this->bbcode_second_pass_quote('Cashmere', 'T')BU - you're making the HUGE assumption that your demand destruction curve will be linear. It will not be.

Agree on that one, there's thresholds that will be reached. There will also be swings in the price with wars, natural disasters and as we are currently experiencing with market manipulation. I think the thing that will be more eye opening is the price swings upon major world events. Those are what will lead up to shake ups, generalized chaos, martial law and fuel shortages. Anyhow, if the destruction is somewhat managed over time we could see a medium to large scale conversion of the populace over to hybrid vehicles. Of course they're kind of weak and wimpy cars but hey the sooner to see this country looking more like the third world! I think this whole affair will be drawn out longer and more perversely than most here want to see happen.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Mon 16 Jun 2008, 10:18:37

$this->bbcode_second_pass_quote('vision-master', '
')But, what?


See the Planning Forum for suggestions and examples.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby offgridbrandon » Mon 16 Jun 2008, 10:38:53

I don't think you can put a number on this since it is a moving target. If gas hit $10 today, we would very quickly enter a depression. If gas steadily climbs to $10 5 years from now, there would certainly be a recession, but the longer we are subjected to high gas prices, the more time technology has to advance and for our economy to adjust. Funding for more efficient gas engines or alternative fuels will continue to grow the longer we are subjected to higher gas prices. At some point the paradigm will shift as a new fuel technology becomes more affordable than gas. This won't cause the price of gas to suddenly drop since developing nations will continue to be gas guzzlers long after we have beaten our dependence. Kind of sounds like a drug problem right...

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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Mon 16 Jun 2008, 10:47:05

$this->bbcode_second_pass_quote('offgridbrandon', ' ')At some point the paradigm will shift as a new fuel technology becomes more affordable than gas.


What "new fuel technology"?
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Revi » Mon 16 Jun 2008, 10:58:37

I think this will be the new fuel technology: www.sunnev.com

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Re: PRICE at which gas will finally cause panic and chaos

Unread postby BigTex » Mon 16 Jun 2008, 12:05:16

Ludi, I meant both think about AND do tactical things. I am personally both thinking and doing these things.

MrBill, I am befuddled, bewildered and confused as to why there are very few fuel efficient vehicles for sale in the U.S. It's incredible that the automakers are suffering the way they are, and they are not even offering what the people NEED right now.

There is a big shiny Hummer dealership I pass on the way to work every day, and it's a very bizarre thing to observe. It almost seems like things like that should have large black curtains drawn around them.

I wonder if the SUV is not going to turn into something akin to the housing boom. So many of these SUVs were purchased with 60 and 72 month financing. What will happen when the owner is both VERY upside down on the loan AND can't afford to fuel it? They will default and the vehicle will be repossessed, but the collateral will be worth dramatically less than the outstanding loan balance.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby Ludi » Mon 16 Jun 2008, 12:10:26

$this->bbcode_second_pass_quote('BigTex', 'L')udi, I meant both think about AND do tactical things. I am personally both thinking and doing these things.


I fear there is a large contingent (not necessarily here at po.com), who believe if we just think and talk enough about "solutions" one will magically spring into being....
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby vision-master » Mon 16 Jun 2008, 12:15:14

$this->bbcode_second_pass_quote('Revi', 'I') think this will be the new fuel technology: www.sunnev.com

If you have to go out of town, take the bus.


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Re: PRICE at which gas will finally cause panic and chaos

Unread postby olekriri » Mon 16 Jun 2008, 13:39:00

At around $8/gallon we will see major problems in the US. Major strikes, rioting etc.

Ironically that price seems like a bargain in most European countries right now.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby mos6507 » Mon 16 Jun 2008, 13:43:46

$this->bbcode_second_pass_quote('vision-master', '')$this->bbcode_second_pass_quote('Revi', 'I') think this will be the new fuel technology: www.sunnev.com

If you have to go out of town, take the bus.


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Fat chance.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby mos6507 » Mon 16 Jun 2008, 13:59:31

$this->bbcode_second_pass_quote('Heineken', '
')Overall I disagree with these comments, Mos. They assume that we are infinitely adaptable.


I never said we are infinitely adaptable.

$this->bbcode_second_pass_quote('Heineken', '
')This time it's different, and just switching jobs won't fix it.


It might work for a while, though. It's a little better than just giving up.

$this->bbcode_second_pass_quote('Heineken', '
')All those "alternative" industries you list are to various degrees oil-dependent. And if not oil, then coal.


So what? We are wasting so much oil that if we redirect it where it could do the most good, we'd be much better off.

$this->bbcode_second_pass_quote('Heineken', '
') What do you think locomotives run on, both in their engines and under their wheels? How will those solar-panel installers get to their job sites? What about their lunchtime---what will they eat and what will it cost? What about the long chain of manufacturing that produces finished solar panels?


Again, you are looking too far off into the future. Once you start cutting the fat out of oil consumption, there will be enough oil/coal left to bootstrap renewables. Will it always be there? No! But let's look at the world as it is now, not 20 years after the peak when we're down to the last drop. Let's not just mentally equate peak oil with oil "running out" as the media does. The world can not just go cold turkey on fossil fuels. We need to just use those BTUs more wisely.

$this->bbcode_second_pass_quote('Heineken', '
')Sometimes I wish the name of this website was not Peak Oil but Peak Energy. Because that's what we're really talking about. A decline in net energy availability for the first time in human history.


I'm not even sure that's true. I'm still a big fan of thorium breeder reactors. Of course, we're quite late in the game to get started on those. So much of peak oil is about what could be done to mitigate or transition and watching those windows of opportunity recede into the horizon. It's hard to really know for sure when it's become too little too late until everything really does collapse.

I'm as worried as you are, but I think doing nothing out of sheer fatalism is just plain unacceptable. If you are going to go down, go down with a fight, damn it.

$this->bbcode_second_pass_quote('Heineken', '
')Wait until we hit Peak Electricity. Coming soon. Then people won't talk so carelessly about electric this and electric that.


If you're worried about that, then get your solar panels now. Then you won't have to worry about coal or natural gas powered electricity shortages.
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Re: PRICE at which gas will finally cause panic and chaos

Unread postby jlw61 » Mon 16 Jun 2008, 14:24:22

$this->bbcode_second_pass_quote('wisconsin_cur', 'T')o take a Twin Cities example. Gasoline will still be available in Minnetonka (a rich Western Suburb) long after it is no longer available on Cedar Ave near Riverside. The people on Cedar Ave will be... agitated to say the least and the people of Minnetonka will be rightly concerned about groups of individuals who look like they don't belong in Minnetonka.

I won't be watching for a certain price, I will be waiting for reports of people in the inner city robbing the gas station to fill up their tank, not rob the register. I will be waiting for the gas station on Riverside and I-94 to close. I will be waiting to hear of the people of Minnetonka setting up their own minutemen group.

For the record, Minnetonka would be nearly impossible to defend against a minimally organized force... and extremely difficult to defend from even the most unorganized of mobs.


Good points. I worked for a company based out of Minnetonka, visited several times and fullly agree with your assesment of your situation. I expect there to be a couple of gas stations closing in my area before the end of the summer and would not be surprised to see up to 30% gone before next spring unless something happens. I believe many of the independents have margins so thing that the slightest unexpected major expense would kill them.
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