[Pops]

$this->bbcode_second_pass_quote('', 'I')f oil were selling for $50/bbl today I don’t think there would be enough supply to satisfy demand: so who would buy and how would that decision be made?

[Newfie]

Yes, but it is missing something.

When you sell the Caddy, and give up Evian, then a lot of folks are going to be out of work.

Oil is not just about its utility, it is about consumption. What you are describing is the death of consumerism. But our entire global economy is built on consumerism. Think of it this way, waste is a way to spread wealth. If we stop wasting then we stop spreading the wealth, and then a lot of folks will start to starve. That may well ignite social rebellion (ala Arab Spring) and bring about global fiscal collapse.

I'm being pretty sparse with the words here, hope I convey the idea.

[Dybbuk]

$this->bbcode_second_pass_quote('Newfie', 'W')hen you sell the Caddy, and give up Evian, then a lot of folks are going to be out of work.

Oil is not just about its utility, it is about consumption. What you are describing is the death of consumerism. But our entire global economy is built on consumerism. Think of it this way, waste is a way to spread wealth. If we stop wasting then we stop spreading the wealth, and then a lot of folks will start to starve. That may well ignite social rebellion (ala Arab Spring) and bring about global fiscal collapse.

[Pops]

Newf you're arguing like I'm taking some uni-corny position and I can't for the life of me figure out why, maybe my posts are too rambling or I maybe I just don't say "death", "starve" and "rebellion" enough. lol

Here is my one line thesis statement (posted above):
$this->bbcode_second_pass_quote('', 'B')ut quick increases to the very high prices levels peakers like Simmons warned of can't be maintained for any length of time so can't "Collapse" the economy down to some stone-age bug-eating level

[ROCKMAN]

Pops – Perfect sense IMHO. But remember the basis of my premise: price won’t determine the ability of supply to meet demand…the demand of those who can pay the price. And, as I think you say, price can’t shoot up too fast beyond the ability of an economy to make efficient utility of it. Say that price is $X per bbl. I won’t tag it with a number because that can distract the discussion by arguing the details. The future I have difficulty imagining is when the world can afford to purchase 90 million bbls per day but there’s only 70 million bbls available at that price…$X per bbl. Can the folks with the 20 million bbl deficit pay twice X per bbl? As I think you imply no economy can squeeze enough utility of $2X per bbl in order to pay that price. ..at least not over a relatively short term. So price caps demand but there’s not enough supply to satisfy that demand.

Again, if that dynamic ever develops IMHO it won’t be in 5 years…maybe not even 10 or 15 years. That brings back the importance of access regardless of the ability to pay for oil. At one time I thought the prime motivation behind Chinese oil acquisition was getting the oil cheap. I can’t quantify it but what I’ve seen the last few years is that China is paying a premium for those in ground oil reserves. I’m sure I won’t be around if/when this day comes. But if China and other economies are recognizing this aspect and are beginning to prepare for it in an increasing significant manner it could add another significant driver to the POD. Little bits and pieces coming together: the Falklands back in the news, China increasing in-your-face attitude with Japan over territorial waters, Russian/Chinese pipeline deals, China’s first and little noticed air craft carrier, some terse discussions about offshore mineral rights of Greenland. Saudi Arabia thinking about going big on solar and selling e- to the EU. Might make them prefer shipping more oil their direction to keep their economy cooking and using more e-. Remember the Saudis can’t keep expanding their internal use of oil and continue to sell enough oil to support their mono-revenue business model. China planning their own Strategic Petroleum Reserve, etc. No one big red flag but a lot of little pieces.

Might not happen to the extreme but seems we’re moving in that direction.

[Newfie]

$this->bbcode_second_pass_quote('Pops', 'N')ewf you're arguing like I'm taking some uni-corny position and I can't for the life of me figure out why, maybe my posts are too rambling or I maybe I just don't say "death", "starve" and "rebellion" enough. lol

Here is my one line thesis statement (posted above):
$this->bbcode_second_pass_quote('', 'B')ut quick increases to the very high prices levels peakers like Simmons warned of can't be maintained for any length of time so can't "Collapse" the economy down to some stone-age bug-eating level

[Loki]

It's been nearly 10 years that PO.com has been online, 10 of the most “interesting” years in generations. There's no way in my mind that peak oil, expressed by sustained high prices, doesn't have something to do with that. But I think society is too complex to say oil at x dollars will cause y effect. The rising cost of gasoline in the US has resulted in a lessening of some of our more unproductive uses, but it also occurred when the housing bubble popped. It's easy enough to ignore the effects the rising price of oil had on the economy, has most economists do, when the prevailing factor in our economic trouble is clearly the popping of a debt-induced asset bubble.

It's like throwing a pebble in a pond. Throw one pebble in a pond and it's easy to trace the ripples. Throw a handful of pebbles and it's harder to discern which ripples are caused by which pebbles.

Moreover, the difference between a tightening of slack and economic crisis is somewhat subjective. As long as it's only your neighbor getting laid off, who cares, it's just a recession. But when you get laid off it's a frickin' crisis!

The US has certainly proven more resilient than many peak oilers thought, including myself. My thinking back when I joined this site was that peak oil would spark a decades-long global depression on the scale of the 1930s, if not worse. I thought it was likely (likely, not certain) that we'd be in a deeper depression than we are now. But all we got was this lousy Great Recession

Still, here we find ourselves in an economic malaise with no end in sight, after a massive financial crisis that even TPTB thought could ruin us (“this sucker could go down” --President George W. Bush). Due I think more to financial shenanigans than to peak oil. But the end of cheap oil ain't helping!

Scratch all that, $213.50/bbl = Mad Max.

[Pops]

ROCK:
I agree, re: NOCs controlling allocation. I've said that capitalist markets are the cheapest way to distribute resources on the uphill side of the curve because they are most efficient and the best at laying off external costs but on the downhill side they will lead to the problems caused by the have-nots getting po'd because they have naught (just realised that the abbreviation for peak oil is the same as for "Pissed Off", lol)

I've thought for a while that "trickle Up" will be the big crisis of capitalism but the failure of the energy export market will be right up there. I know you said somewhere you don't like charts but I'm a left brainer and love em, anyway here's one from de Sousa at TOD that fits right in:



--
Anyway back to the topic of runaway oil price collapsing the economy overnight, you asked:
$this->bbcode_second_pass_quote('', 'T')he future I have difficulty imagining is when the world can afford to purchase 90 million bbls per day but there’s only 70 million bbls available at that price…$X per bbl. Can the folks with the 20 million bbl deficit pay twice X per bbl?

[Pops]

$this->bbcode_second_pass_quote('Newfie', 'D')isagree.

[Pops]

$this->bbcode_second_pass_quote('Loki', 'T')he US has certainly proven more resilient than many peak oilers thought, including myself.
..
Scratch all that, $213.50/bbl = Mad Max.

[basil_hayden]

Seems to come down to Monte's "waste" rants, if waste is the opposite of utility.

Most of the petroleum used in 2008 was waste. Most of the economy, keeping each other busy, is waste.

This certainly has changed incrementally in the past 5 years, but we have a long way to go.

"Collapse" certainly has a "fungilbilty" rubber band attached, but surely it too can snap.

30 years of fracking, 30 years of tertiary recovery. Snap.

[Pops]

I met a guy in a bar once who pumped septic tanks, his business card read:
"It may be shit to you but it's my bread and butter."
LOL

[ROCKMAN]

Pops – Actually I do like charts…just finished a bunch for a show & tell. But I like charts that show proven stats…not as much for projections into the future. And even with factual data the hills and valleys on such a chart require an explanation which is typically and interpretation of the dynamic affecting the data. And that’s where debates can start. I.E. the consumption drop: more because of rising oil prices or the recession? And maybe a linkage between the two.

And I’ll doggedly hang on to my philosophy that demand will always match supply. Saying demand at $60/ bbl maybe 100 million bopd is fine but a meaningless stat until the day oil hits $60/bbl and we’ll see first, are there buyers for that 100 million bopd and, more important, can the producers deliver that 100 million bopd.

[Pops]

$this->bbcode_second_pass_quote('ROCKMAN', 'I').E. the consumption drop: more because of rising oil prices or the recession?

[ralfy]

Oil consumption is dropping for the U.S., EU, and Japan, but rising for the rest of the world:

http://ourfiniteworld.com/2013/04/11/pe ... e-problem/

With that, demand destruction leads to economic crisis for several countries while the oil is consumed elsewhere. After that, energy consumption starts dropping overall.

[Newfie]

$this->bbcode_second_pass_quote('Pops', '')$this->bbcode_second_pass_quote('Newfie', 'D')isagree.

[Newfie]

$this->bbcode_second_pass_quote('basil_hayden', 'S')eems to come down to Monte's "waste" rants, if waste is the opposite of utility.

Most of the petroleum used in 2008 was waste. Most of the economy, keeping each other busy, is waste.

This certainly has changed incrementally in the past 5 years, but we have a long way to go.

"Collapse" certainly has a "fungilbilty" rubber band attached, but surely it too can snap.

30 years of fracking, 30 years of tertiary recovery. Snap.

[Ibon]

$this->bbcode_second_pass_quote('Pops', '
')
My premise is more about utility and not just ability to pay - maybe even how utility actually trumps wealth. Imagine that a barrel might power a pump to provide a whole village with clean drinking water and even though they are a fraction as wealthy as I am individually, they might still outbid me for the barrel because driving my 4x to the store for Evian just ain't worth as much as preventing cholera is for them.

[Ibon]

$this->bbcode_second_pass_quote('Newfie', ' ')But briefly I feel we Westerns live in a very hollow society that is mostly constructed to pass wealth around while propping up our self image by letting us think we are doing something important. That is the underlying cultural need for consumerism, to create work. Why? Because we "need" to feel we are doing something valuable.

Keeping this subterfuge going is a neat trick. It only works if the audience agrees to buy into the illusion. And buy in we do.

[Ibon]

$this->bbcode_second_pass_quote('ROCKMAN', ' ')I’m sure I won’t be around if/when this day comes. But if China and other economies are recognizing this aspect and are beginning to prepare for it in an increasing significant manner it could add another significant driver to the POD. Little bits and pieces coming together: the Falklands back in the news, China increasing in-your-face attitude with Japan over territorial waters, Russian/Chinese pipeline deals, China’s first and little noticed air craft carrier, some terse discussions about offshore mineral rights of Greenland.. China planning their own Strategic Petroleum Reserve, etc. No one big red flag but a lot of little pieces.