324. THE BIG GLITCH
Buzzed over to LATOC today, and found this literature next to the cash register:
More of the huckstering pseudo-science we've come to expect from the peak oil doom cult. No evidence or data -- just faulty analogy, fluffed with fear, larded with opinion, and sold via MasterCardTM over the Internet. Apparently the ongoing credit armageddon hasn't shortcircuited Savinar's retail channels... yet.
So what really does happen when global oil production drops by 15%? Well, it turns out we know the answer to that one because it actually happened once before, in the early 1980's. Production hit a high of 66mbd in 1979, and over the course of 4 years dropped by 14% to 56.6mbd in 1983. In fact, oil production didn't surpass the 1979 high until 1993, 14 years later (Source: BP Statistical Review 2007). Let's call this event "The Big Glitch".
So what did the world look like in 1983, after oil production had collapsed by 15%? I'll tell you what. Go out to your local freeway, and look at it during rush hour, when it's totally crammed with cars. That's exactly what 1983 looked like. I was gassing up as usual, totally oblivious. The "crisis" had such a minor impact on daily life, that I didn't even realize anything out of the ordinary was happening, let alone a liquid fuels armageddon that was wholly shattering the oil dependent economy and reducing the citizenry to poverty. I could be wrong about this, but I'm pretty sure that no one was forced by starvation to eat their Flock of Seagulls albums.
The Big Glitch is also interesting because it shows us how the world economy behaves under the conditions of a long oil production plateau. To see this, connect the years 1979 and 1993 with a horizontal line, like so:
As you can see, from 1979 to 1993 the world actually used far less than the plateau condition indicated by the yellow line. And how did the world economy perform with no net gain in global oil production for 14 years? Here's the graph showing growth in world real GDP, based on figures from the World Bank's World Development Indicators Database:
The world economy didn't miss a beat. Over 14 years from 1979 to 1993, the world economy grew by 60%, despite a 0% increase in oil production.