[miraculix]

let me start with the facts we can all agree on and than extrapolate from there.

peak oil is real and only a matter of when

urr are unknown and USGS may be right and may be not

oil supply is tight and will remain so, at least mid-term range

refining and infrastructure are the constraining bottlenecks and even with overly optimistic growth in crude production there will be a supply shortage in the coming years

the general public is becoming increasingly aware of these constraints

energy is moving to the center of political discourse the world over

NATO is expanding its mandate to include the security of oil supply


And here follows how I feel things will play out:

Tight, jittery markets will (and already have) lead to demand destruction - the cake is divided among fewer players
First, poorer countries are being priced out of the oil they would like to purchase
Secondly, less well off parts of first world populations will be priced out of at least some of their accustomed consumption level
Prices for everything will creep up, slowing world economy with further reduction in demand
Feedback loop will lead to recession
At prevelant high prices alternative energy sources become competetive
A race to conservation on all fronts will ensue

Here comes the tricky part - timing of PO

a) PO now-2 years out
possible that demand destruction and alt. fuels will act as a sufficient buffer for a couple of years
nobody expects that alt. fuels will ever replace oil at current consumption levels, but may sustain a functioning society at some lower level without total disintegration
I am thinking along the lines of Tainter's Collapse theory, that we will move from a highly complex world economy to a less complex one that may look like a world of 50-70 years go, which in the case of the US is still looking a bit brighter than present day Cuba.

b) PO 10-20 years out
sufficient lead time to implement smooth transition, since the high crude prices that will remain by most accounts will force these changes into existence

c) PO 20+ years out
we will return to our usual ways within 5-6 years from today, after undergoing a mild recession and than we will be less likely to implement any changes until a hard crash will come, because PO will hit with a vengance when it does
You will hear things, like "remember those guys 20 years back that said we would run out of oil --- duh"

My main problem with the prevelant (this forum) prospet of all out Hobbesian warring of everbody against everybody else is, that I believe that we can manage to hang on to much of present day order of things for quite some time, even if we are at PO at this point in time
Some powerful and/or rich countries will absorb all the oil the others can not buy any longer. For the richer nations, their share will thus increase over time, at least for a while and throw alt. fuels in the mix and life as we know will still exist some time into the future.
If America's poor will take to the streets, the autocratic governmet into which the USA has morphed will deal with this nuisance coercively - think Time Square = Tinnamen Square
Some countries will actually see their standard of living increase over the next decade.
At one point though there must be a breaking point, that is when we get down the slope too far that all these developments can not make up the physical lack of the black gold, but who knows what world we live in by that time

I know much of the above is redundant to the seasoned PO member, but I still hope that I will get some intelligent and logical rebuttal to my presented assumptions

thx

[Aaron]

Greed

Mankind has never produced more food than we do today...

... & more starve than ever before.

Medicine has never been more advanced than today...

...& more die from treatable disease than ever before.

Education has touched more lives than ever before...

...& more are illiterate than ever before.

Here at the height of our hydrocarbon fortune...

...genocide & warfare around the globe.

While I share your desire for a troubled, but manageable transition to the post carbon era, I fear the rule of strength makes such a future unlikely.

You see, some will view PO as an opportunity...

And the sad fact is that they will be right, as far as that goes.

And we will fight.

[ubercynicmeister]

Hi Aaron.

$this->bbcode_second_pass_quote('Aaron', 'G')reed

[XOVERX]

While I could quibble with some of the syntax used in stating your basic assumptions, I think overall your basic assumptions are reasonably sound as things stand today. But there is a significant wild-card you are not considering: global warming / global dimming. If GW/GD is the problem many climatologists claim it is, throw out the assumptions and start over. For the purposes of this response, however, I will assume GW/GD does not figure into the equation in a meaningful way.

First, I have an issue with your "play out" scenario that precedes your scenario "a". While I concede your comment that demand destruction will be helpful (absolutely necessary, IMO), I am not so sure that demand destruction leads only to "recession."

I watch these young adults filling up their 1993 gas guzzlers as they head to work, and I wonder how they are going to get across town to their waitress job when gas hits $4, or $5, or $6, or more, per gallon. Take the bus? Maybe. What will the restaurant do? Hire more local waitresses? Maybe. How will the waitress be able to buy McDonald's for her kids even if she finds a "close by" job, or if she takes the bus? She won't.

And what happens the World Gym owners? To the movie theatre owners? To a large segment of the service industries in the face of high dollar gasoline? Industries that employ a lot of people?

I'm just not at all rosy that PO today will mean some little old gentle recession. It could well lead to a full-scale depression, which could spread across the globe. And which would presumably seriously impede the ability for market capitalism to respond effectively to the development and implementation of alternative energy sources.

And we haven't even factored in the incredible national debt the nation faces, the emergence of non-dollar oil bourses, or war. A miscalculation in an attack on Iran, for example, could spiral down world-wide economies in unimaginable ways.

And even if we assume higher priced oil and gas will spur development of alternative energy sources, maybe the great middle classes will not be able to afford the super high efficiency solar panels and wind turbines? Maybe the great middle classes get their home mortagages foreclosed? And if the middle classes are stressed, the wealthy will feel the heat from below, just like they did in the 1930s.

If PO is now, I think government will have to play a significant role in the economy easing through the transition. But America is not geared up for any such a governmental role. The neocons rule supreme, and I predict they may get through another election cycle, maybe two, and then there may be a reevaluation at that point. But a new political direction now? I doubt it.

And if PO has already happened, then these wasted "do nothing" years could mean your scenario "a" is far too optimistic. There should be federal incentives now for fuel efficient vehicles, not incentives for purchases of vehicles over 6000 pounds. There should be federal incentives now for home owner installation of solar and wind technologies, but those are left to state and local governments. There should be federal incentives to use less gasoline now by gasoline and vehicle taxation, with the taxes plowed back into alternative energies, but in today's neocon political climate, one would be labelled a communist for such a suggestion, or worse, a liberal.

Furthermore, if PO is now, then the Tainter "soft landing" theory may just not fit the fact pattern, for the reasons cited above and for other reasons as well. The Hobbesian "fear factor" may infect the minds of the middle classes if they can't get to work, if they can't pay their rent and mortgages, if they can't buy the consumer goods to fuel America's corporate capitalism. People can get pessimistic pretty quickly if the price of gasoline skyrockets without a commensurate increase in real wages. Which means inflation. Economic devolution. And conceivably, deep economic depression.

Economic depression which could begin to unravel society in far more profound ways than suggested in your scenario "a." I will, however, concede that I tend to agree with your scenarios "b" and "c". Perhaps with scenario "b" I'd like to see a few more years out than your 10-year number, but, all-in-all, if scenario "b" or "c" occurs, then I like our chances.

Problem is, scenario "a" is much much more likely. Since MQ first directed me to this site, I think this 2004 report, more than anything else I have read, is the smoking gun for PO happening today:

http://www.energybulletin.net/2544.html

[KrellEnergySource]

I think most people are underestimating the effects that the SUDDEN and possibly permanent higher energy prices will have on economies.

In 1935, a radio cost about as much as a piano. What was the major part of the cost? Materials. Labor was cheap. Between then and the 1990's, things had reversed to the point that things were being built with cheaper materials and labor was the serious expense that everybody was interested in reducing.

But in the past single year, we have seen a huge increase in the price of energy. Heating and air conditioning bills are taking significantly more of everyone's paycheck. Every good or service with an energy component may become more expensive if the labor costs stay the same. Again, more money out of pocket for almost everything. So where consumption can be cut, it will be cut. And the ripple grows larger and larger, becoming a wave.

These changes wouldn't be nearly as bad if they were trends that were developing over time. But if the changes over the next year are anything like the changes over the past year, I don't see any way for capitalism to adjust to the new conditions without severe impact on the wage earner and the markets. Think words like "turmoil" and "powder keg".

Brian

[MonteQuest]

XOVERX, a most excellent post!

Folks, this is the Big Picture he paints.

Much like my Peak Oil Perfect Storm thread you will find in the Best of Montequest.

[Kylon]

You will know the end is near when a law in congress gets passed to make debt "inflationarily adjusted". Once you see that law passed, you know that the end is near.

Until then the corporate lobbyist for the credit card companies, and the banks will do everything they can(and they have alot of money/power) to keep the economy from completely imploding. When it becomes clear the economy is completely imploding, and it's the right time(for them), that law will be passed, and then when money inflates, to 1/10th it's value, but the debt also increases, people will be forced into corporate slavery. Combined with the bankruptcy laws currently in place, and you've got complete debt slaves.