364. THE OTHER "PEAK OIL"
We all know the classic image of peak oil. This graph of U.S. production says it all:
The peak oil community is obsessively focused on images like this. Peak graphs are presented for every country, like a slide show, and after viewing the whole series, you're damn lucky if your eyeballs haven't turned white and coagulated from raw anxiety.
But that's just one side of the story. Today I'd like to show you a different series of peak oil graphs -- the ugly stepsisters who don't seem to get any attention. These are the graphs of peak oil consumption. Figures and images come from EIA country profiles. Take a deep breath, and fasten your seatbelt for a rude awakening to the realities of "peak oil".
Figure 2: Japan Oil Consumption Has Been Declining Since 1996
As you can see, "peak oil" occurred in 1996 in Japan -- 12 years ago -- and was an entirely demand-driven phenomenon.
Figure 3: Israel Oil Consumption Has Been Declining Since 2001
Wooh baby, that'll turn your hair white... Israel "went over the cliff" in 2001, and is now down 16% from it's peak level.
Figure 4: Germany Oil Consumption Has Been Declining Since 1998
The decline of Denmark has an interesting dual-peak structure. It's down 34% from its primary peak in 1980, and 20% from its secondary peak in 1996:
Italy peaked in 1995 and is now down 14%:
Savinar says a 10-15% drop will put your economy in the hospital -- shatter the economy and reduce the population to poverty. Apparently Italy didn't get the memo.Sweden hit its final peak in 1996:
It's such a shame because these graphs hold the important clues about peak oil. Yet they get almost none of the airplay. The fact that oil production will peak is just a truism -- a statement of basic logic. The fact that a country can reduce it's oil consumption without duress is like a miracle... something to really think about and learn from.
by JD
posted by JD @ 4:24 AM
111 comments
111 Comments:
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Thank you! JD
Once again JD you have shown that, while the underlying facts of peak oil may have some merit, anything beyond saying "At some undetermined point in our future we will be able to pump less oil due to its finite nature" is fortune telling at it's finest.
Did it ever occur to the doom and gloomers that perhaps a boom in retrofitting infrastructure is just what America needs right now? AND that boom may be enough to carry us through the baby boomer's retirement years without bankrupting the country? Pure speculation on my part, but it's an idea that has merit.
Wow. What a concept. Peak oil could actually save the day!!! Sorry to disappoint the America haters just waiting to watch their loved ones die off but they may be stuck with their mother-in-law for awhile after all. Go figure.
Thanks for the great blog!
Liz
So oil consumption has peaked and declined, and yet, prices go up. Curious. So, you contend that the high prices are caused by what - inflation, speculation, tree huggers guarding ANWR?
If consumption/demand is down, shouldn't prices follow?
Another thing that peak oilers seem to forget is that economic hardship is never the result of a single factor, even one as important as oil. The U.S. recession, for example, is being driven mostly by the housing, subprime mortgage and financial crises. Increasing food and energy costs, of course, only make matters worse, but they are hardly the whole story. And it is a fundamental principle of macroeconomics that economies move in cycles of expansion and contraction. In every previous recession there were probably people gleefully announcing that the world economy was collapsing. But it wasn't, it was only changing, redistributing wealth and resources.
JD, do you think that Dmitry Orlov is right to predict a Soviet Union-scale collapse of the U.S. Economy within the next few years?
http://cluborlov.blogspot.com
My own country, Finland is apparently down something like 15% too (from 1980) What we would need to know in order to derive some useful information of this is what consumption this drop actually has come from. Have all these countries e.g been burning oil for electricity? I doubt any of the countries have had a drop in the number of automobiles nor am i really buying that they are so much more efficient.
Example : automobiles in my country in 1980 approx 1,3 million. In 2005 approx 2,8 million. I don't believe they got that much more efficient.
I believe a rather high percentage of current oil usage is for transportation and i believe automobiles represent a large share of transportation usage (numbers anyone?)
So what kind of consumption have these drops in consumption come from, that would be interesting to know.
My bet is that it's a lot from heating / power generation. That doesn't mean that cuts in transportation would be impossible, but it means it's actually going to take a real effort - unlike the previous drops in consumption that were just replaced by other resources such as coal, nuclear or natural gas easily.
Nevertheless, believing that reducing oil consumption today would be as easy as then would require a comparison of the usages of oil then and now. I believe it won't be nearly as easy today as then - but i'm with you that we waste it a lot though.
A little off subject here. In the state of Connecticut, USA we are already finding mosquitoes with WEST NILE VIRUS, especially along the Long Island coast line. The local News showed a quick video of the Town of Milford sending a city worker out on a scooter with a five gallon pail between his legs dropping a cup full of insecticide in each of the town's 1600 street catch basins. Last year I saw A crew of two doing similar work from a pick up truck. J.C., Sr.
Ah, hell what's the point we're all doomed anyways, even JD knows it, just doesn't want to admit it.
It's okay, I get it JD....you want to hold onto the belief that everything is going to be just fine...
One other thing...Oil hit $140 today. Pretty soon the economy will collapse, no more Mcmansions....boo hoo.
What is remarkable is that so many First World nations have flat or falling crude oil demand since 1980even though crude became cheaper from 1980-2000, and not really expensive until late last year.
The real declines in demand are ahead. The First World will likely reduce its demand by a health slicen -- 10-15 percent or more -- in coming years. Global demand should fall also, perhaps by 10 percent.
That will free up 8 mbd -- we will have 86 mbd production, but no place to put * mbd of it. How many tankers can Iran fill up? The world?
Hge glut coming?
One thing I've noticed about this blog is that many debunkers are of the opinion that government intervention or public leadership is both unnecessary and more likely detrimental to promoting efficiency, conservation, alternative energy, etc.
I'm of the view that peak oil can be dealt with, but it seems to me as if a large amount of public funding and incentivizing will be necessary to invest in the "bigger picture" infrastructure that will be necessary for alternative energy delivery.
To my knowledge, the energy industry is highly subsidized by most governments around the world, the US being no exception. We currently give significantly larger tax breaks to continually profitable oil companies, and yet they are currently asking for even more investment to expand their capabilities.
The renewables industry doesn't hold a candle to Oil when it comes to cash-on-hand, investment, or tax breaks. I have a hard time believing that the invisible hand of the market will allow the alternatives to grow at the necessary pace under the current relationship that the industry has with the US government.
Regardless of whether or not Obama's "Apollo Program" for alternative energy has any legs, (and his ties to corn-ethanol lobbyists do concern me), it seems to me that that kind of language is both appropriate and necessary.
"What is remarkable is that so many First World nations have flat or falling crude oil demand since 1980even though crude became cheaper from 1980-2000"
Could it be because so much of the manufacturing has moved to China and other Asian countries? I don't think it's so remarkable. You just can't look at US consumption and ignore that we're heavily dependent on foreign-made goods.
Oil won't be needed ten years from now. The high oil prices are, however, absolutely necessary to introduce changes which no government policy can ever achieve.
Nothing spurs innovation in other energy sources like $140 oil. If it goes to $200, the change will possibly occur in 7 years rather than 10.
All bull markets ultimately end in hysteria. Oil has some way to run and then it will become a victim of its own success. $150 oil over the next five years would be the best long term tonic that the industrial way of life could get. The current breathtaking advances (largely unknown to most people) in solar power technology (check Nanosolar) and improvements in battery technology promise a different future - one that no longer depends on the Middle East, military intervention and petro dollars. What could be better than that? $150 oil is a small price to pay to get there.
Andy is San Diego,
That doesn't matter, because factories don't use much oil. We use oil mostly in the distribution of goods, and we still do that in the developed nations.
Texastea,
I agree that high priced conventional sources help drive innovation, but innovation and generalization of its use are two different things and, to the extent high prices for conventional energy sources exacerbate overall economic weakness, scale production and use of better technologies can be delayed. As JD Walters noted above, there is a real macro context which can't be ignored and is filled with these types of contradictions.
To this anonymous poster -
"So oil consumption has peaked and declined, and yet, prices go up. Curious. So, you contend that the high prices are caused by what - inflation, speculation, tree huggers guarding ANWR?"
I don't think that's what JD is saying. There is no doubt that we're dealing with a much thinner supply cushion and increased demand from developing nations. What I gather from this graph is it is possible for nations to transition away, or at least significantly reduce, their oil consumption without experiencing massive catastrophe.
It does take large scale societal change - and that doesn't mean we're all eating cats and running around in psychotic hordes. It means Americans can no longer handle $5 gallon gas, and adapt to it. Not collapse from it.
couple of quick links from the MSM that SEEM to jibe with JD's comments/predictions. Sorry, too busy to make proper links, you'll have to cut and paste.
This links pertains directly to the "excess fat" JD speaks of and the continuing effects of demand destruction in the US. Most notably though, it compares Canada--with its general use of smaller cars and much better public transit (that comes from public policy, much higher taxation) with the US (much less public transit, more drive by markets, private innovation). Timely prediction here...
http://ca.news.yahoo.com
/s/capress/080626/national
/gasoline_prices
Also, if you feel like watch some MSM television, demand destruction and the automobile are dealt with here, and also JD's personal favourite (cough cough) James Howard Kunstler. Here, his forecast is much less doomerish--perhaps toned downed for the MSM.
Worth the watch anyway to see how a particular middle class family deals with higher gas prices
and looks to car pooling etc.
http://www.cbc.ca/national
/blog/special_feature
/running_on_empty/
the phrase "Peak Oil" is never mentioned but the spectre of $3.00 /litre of gasoline is dealt with, particularly in regards to demand destruction. It's fairly simple MSM tv (waaaay beyond US MSM tv though) but at least a step in the right direction to get people thinking and show some choices people can make to drive demand down FURTHER.
My question for this entry by JD is this:
demand may have peaked in many OECD countries. Fair enough. It can be done. However, to play devil's advocate, what happens when declines from our current production plateau (and yes, I know it's a bumpy one) start? That is to say...how can countries like Japan or Italy (countries WITH mass transit..and urbanized populations) further cut their use to match the natural declines in giant fields and the declines in exports that are concomittant with the growth in demand in the exporting countries ?
As an example, Japan has already announced that it will buttress the oil costs in it's fishing fleet somewhat, so that fish can still come to Japanese markets. How can this occur when declines REALLY start and oil is at $200/bl or more? Less fish and more....um...um......spam?
Anyway, I think the links are decent..
Stuck
A few points:
1. The peak oil graph in the US shows only basic crude. If you combine natural gas liquids and the other stuff, we produce about 9million/day, with expansion plans that should take that up to 10 million/day in the next couple of years.
We are clearly not at peak oil yet globally or in Saudi Arabia. Last weekend, when Saudi Arabia had its summit, they detailed exactly where they had found oil and their expansion plans and how they can take capacity up to 15 million/day if they need to.
2. The US recession has much more to do with bad lending and a weak dollar than anything else. For the average american, having their mortgage go up by $700/month and paying back thousands of dollars in consumer debt is far more devastating than a $150-200/month gas bill increase (avg. car @20 mpg, 15,000 miles/year). The oil price might be the punch that knocks down the US consumer, but he/she was already reeling from the other factors mentioned above.
3. The amount of innovation that has occured in the last decade in the energy and other fields is nothing short of remarkable. Nobody is laughing at the new battery technology, solar technology, wind (which is now already the cheapest form of energy when environmental costs are taken into account), etc.
-- If you combine natural gas liquids and the other stuff, we produce about 9million/day, with expansion plans that should take that up to 10 million/day in the next couple of years --
EIA says 2007 total liquids production in the US (crude, NG liquids, other liquids) was 7.5 million barrels/day not 9.
I haven't seen any credible expansion plan to raise that to 10 million barrels/day.
I'm not convinced. All right, sure. Demand is declining in some developed countries. As another poster pointed out, a large part of that decline is due to moving away from oil for power generation.
I'm not buying the worldwide demand for oil is peaking, or will be peaking anytime soon. Unless Americans are going to wake up one morning and decide not to buy any more cheap Chinese plastic crap. Until then, we'll continue to the remainder of our manufacturing jobs and expendable income over to China, which they will then use to put X million more cars on the road, driving up the demand for oil. In the meantime, the rest of the oil exporting countries continue to consume more of their own products, resulting in less exports.
With rising worldwide demand for decreasing exports, I see no reason why oil should ever go down in price, barring a worldwide bird flu pandemic or an economic collapse. In which case, we'd have bigger problems to worry about.
Stuck,
Japan is an interesting example in how much "fat" can be trimmed. As you probably already know, the largest segment of electricity generation in Japan is still oil. By moving toward renewables and more nuclear power, Japan can reduce its dependence on oil a fair bit just right there.
Cars are not a necessity for many Japanese, and even those who have them could easily be moved to scooters or PHEVs.
Japan's big concern is probably food. That's where you have to look for interesting solutions-- I imagine that more efficient ships are in order.
Ships really have quite negligable fuel requirements and can and do run on very heavy oils such as the orimulsion-type stuff that comes out of Venezuela, of which there is plenty.
The bigger problem is higher performance ships such as passenger ferries which do use diesel and are really being hit quite badly by skyrocketing prices.
Oil now $141. Where's that peak demand you speak of again? It looks as though a peak did occur, peak oil. lol. Yeah, Goldman is right oil is going to be $200 a barrel by August...and it ain't ever going to go back down again. If it does it'll be about $180 with prices such as these can only mean one thing. Can you guess what that one thing is JD?
I'll tell the collapse of civilization.
Enjoy!
I bet that some of you are now wishing that you would have listened to the warnings and prepared for a post peak oil life..
Scratching your heads won't solve anything. This is out of everyone's control. We are on the track for a fast crash now. It appears that things will be worse than I had thought.
I predict that within 6 months we'll be balls deep in a global depression.
-Peak07
Not quite on topic here (I don't know what more can be said, the graphs and figures are talking for themselves).
Just some good news I found out recently, regarding efficiency and energy conservation.
Starting 2009, all public institutions in my country, Romania , will be legally forced to change all their light bulbs to economical ones.
I also heard (unfortunately no sources or 100% sure facts yet) that the state will subsidize this change through a nation-wide program and will soon force other private institutions to switch to economical light bulbs.
I'm just glad to see that good things are possible !
Cosmin
I havn't got the URL to hand as I am in work but it's interesting to note that a few news outlets have reported that peak oil 'Saint' Arjun Murti from Goldman Sachs is not actually a believer in peak oil, pointing more to infrastructure limits and uncontrolled Chinese expansion. This (infrastructure) is a part of the problem Peak Oilers never seem to address. Having many family members working in the oil industry I can attest to the facts:
1. There just isn't enough *skilled* workers. And many of them aren't very keen on Nigeria or Angola, much prefering the comforts of the North Sea market.
Where they tend not to get kidnapped. Ergo there is little skilled labour to optimise production.
2. There just are aren't enough survey ships and rigs
haha..light bulbs? hahaha. That is funny. ROFLMAO! WOW! Well boys there you have it the solution to peak oil..light bulbs....lol.
I notice JD that you don't have a graph for the USA showing that. The simple truth is that there has been a move away from petroleum in industrial and domestic applications for energy and heat generation for many countries. The switch has gone to Gas and electricity. So as usual you are just trying to cloud the issue.
The simple fact is that oil demand and supply has benn steadily increasing until 2004 where we have hit a plateau and demand has now passed supply and we are on our merry little way to $170 oil.
I agree that it doesn't have to be all doom and gloom but honestly it doesn't help to have people cloud the issue and make it appear that there is no problem so "business as usual" people "nothing to see here".
JT said.
"The simple fact is that oil demand and supply has benn steadily increasing until 2004 where we have hit a plateau and demand has now passed supply and we are on our merry little way to $170 oil."
How is this a simple fact?
Production has increased this year. I've yet to see anything saying that demand has passed supply. And how is it that you know we're on our way to $170 barrel of oil? Excuse me, but for a sceond there it seems as though you are stating a prediction as fact, no?
...This is my unsurprised face...
Learn how to spell. ;)
Dear anon troll,
Nevermind the fact that I pointed out I wasn't really talking on topic; but is it really THAT difficult to understand that I was just giving an example that supports the idea that conservation can be done very easily and with absolutely NO sacrifice?
Of course, this effort can be extrapolated to some degree to the whole oil issue and I'm sure is in line with the message of this blog.
PS: again, congrats, JD! Please be free to delete this post along with his blurb. Although I'm 100% convinced that all these trolls are not really PO-ers, but only kids with too much time on their hands.
I'm far more worried about $25 oil than I am about $300.
Mr. JD...
the price of oil today has surpassed USD141...
Do you have any idea how we can reduce the price of oil?
"Do you have any idea how we can reduce the price of oil?"
According to JD, oil prices are high because enviros have blocked drilling offshore and in ANWR. He even finds it funny!
So, if you believe JD, you'll write your legislator and have him/her insist that we start drilling everywhere we can put a rig.
Screw the environment! What's more important; the environment or the economy?
Not according to his previous comments on the issue of ANWR, actually (see #97).
As I understand it (and please correct me if I'm wrong, JD), while JD's not averse to drilling in ANWR in the abstract, he sees it as something that should be done in concert with conservation and electrification, not to maintain the current status quo.
I will echo jt's reply here that I too believe this post seemed like clouding the issue as "business as usual". It does indeed make me a bit angry when somebody tries to present the transition as something effortless. It doesn't perhaps need to be as grave as Winston Churchill's famous "blood, sweat and tears" but that sure is closer to the truth than this cheerful presentation.
Sean, that's old news. JD's had his finger to the wind since then: Try # 363:
"Yup, NIMBYs and global warming activists are jacking up the price of oil. "Not enough oil" is just the cover story. LOL."
Thank you, Sean, you are correct. That is my position. In fact, I've strongly opposed drilling of ANWR a couple of times in this very blog.
Anon (aka Artie) is just a half-assed liar.
According to JD, oil prices are high because enviros have blocked drilling offshore and in ANWR. He even finds it funny!
Never said any such thing.
One more thing. If those slightly declining demand curves were supply curves, i'll bet a lot of people would be eager to call them "bumpy plateaus" instead of hubbert curves on the decline. It's all in how you look at it.
The major problem occuring right now is the decline in the USD which unfortunately oil is priced in and every other commodity. The producers do not really like the fact that the USD is declining, I believe they would be more inclined to have it in Euros. However, priced in USD, if a move were ever made to price oil in Euros then collapse of USD would occur. Look at what happened on Nov 10th of 2007. On that date a Chinese minister said "They might have to diversify their holdings of US T-Bills". US T-bills effectively have been financing US debt and propping up the value of USD. On that date most world currencies spiked vs USD, in Canada our dollar soared to $1.10 USD = $1 CDN. But the Chinese gov quickly took that notion back and the dollar has since retreated below par. My only point is, OPEC is not happy the USD is declining and they are forced to sell oil in this currency. With inflation going sky high, you have the ECB saying next meeting rates are going up, and the US FED just held the rate at 2%. So fallout is weaker USD, angry OPEC and other producers = higher oil relative to weaker USD.
Now onto these analysts out there pumping out higher higher higher. In this country we have a one Jeff Rubin, of CIBC world Markets. Now this gentleman is part of a bank in Canada (of which there are 5 large ones RBC, Bank NS, TD Bank, Bank of Montreal, and CIBC). Off all these banks CIBC was exposed the most to sub-prime fiasco and has written off billions of dollars. Also this bank is heavily invested into commodities now to make up for this short fall, and as it turns out Rubin is a major player off course to get the bank their money back. So you have him out there throwing out all these figures $150 oil by this date, $200 oil by 2012, the TSX (canada's stock market, currently down to 14000, to be 16000 by end of 2008). Now he and his fellow analysts have put out a report that gas is going to $7 gallon and that 10 million US cars are coming off the road by 2012. Now, you have to take alot of things with a grain of salt, but if you ask me, people like this have too much conflict of interest involved. Off course they will pump up the price of oil, it is beneficial to them and to their company. Same with OPEC and ministers, they will want the price to go higher to offset the weak USD and to get much higher profits. Since economies seem to be addicted to oil these players have us ball the cahjones! I say it is time to break from the shackles off these people and go forward with alternative energies, with innovation, with enhanced efficiencies. These people are using oil as a weapon to hold us all hostage to further their own profits and it is time to stop.
Sean, that's old news. JD's had his finger to the wind since then: Try # 363:
"Yup, NIMBYs and global warming activists are jacking up the price of oil. "Not enough oil" is just the cover story. LOL."
Nice dodge Artie. You remain a lying scumbag because you haven't backed up your claim that I said: "oil prices are high because enviros have blocked drilling offshore and in ANWR".
Which is all the more reason why all of these attempts to "call" the peak, be it on the supply or demand side, are worthless, kapnkrinkly. We will know the true peak only with considerable hindsight. More importantly, it's a distraction.
The charts posted here suggest that oil demand can be reduced, even if you don't buy that it's a true "peak." This argument amounts to heresy in certain doomer circles. While it is no doubt true that much of the decreased demand is due to the switch away from oil for electricity generation, that doesn't mean that similar shifts can't be made for other currently oil-dependent activities. I've been following JD's blog for some time, now, and he's written at great length about alternative technologies (many of which already exist and have for decades) that can reduce our dependency on oil in various significant sectors (most notably transportation, which uses the most oil of them all).
He's never argued that the transition is going to be "business-as-usual," and the number of people who would rather argue against that strawman rather than address his actual points is telling. He's talked at length about "lifestyle armageddon," which, while undoubtedly traumatic to some, isn't the end of the world. The point he's quite effectively made for several years now is that there will be change, but that the false dichotomy between "business as usual" and "complete societal collapse" that underpins the doomer creed is nothing but hot air.
He's never argued that the transition is going to be "business-as-usual," and the number of people who would rather argue against that strawman rather than address his actual points is telling. He's talked at length about "lifestyle armageddon," which, while undoubtedly traumatic to some, isn't the end of the world. The point he's quite effectively made for several years now is that there will be change, but that the false dichotomy between "business as usual" and "complete societal collapse" that underpins the doomer creed is nothing but hot air.
Well not in those words of course. I don't see it as a straw man argument since I actually did address his points as well. This post is rather one sided and I consider it a fully valid argument to take note of that.
You on the other hand are (in my opinion) making a straw man argument against this well argued point. I guess the reaction may have been strong but if a post is strongly biased it should get counter-arguments which are rather blunt. That doesn't make them straw man arguments though.
...you haven't backed up your claim that I said: "oil prices are high because enviros have blocked drilling offshore and in ANWR".
Really? Then what exactly did you mean when you wrote "NIMBYs and global warming activists are jacking up the price of oil. 'Not enough oil' is just the cover story. LOL."
Babun, I wasn't responding to you in particular. I admit that I see you as a bit of downer :-), but you've always been a thoughtful and reasoned commentator.
I disagree, however, that JD's post implies what you and jt claim it does. It seems like just about every other post JD needs to take time to leave a comment about the nature and purpose of his blog. He's trying to counter the hardcore doomers like Savinar, Kunstler, et al. In doing so, it is perfectly reasonable to look to positive facts and figures and to highlight them.
He points out that it is possible for a country to reduce its dependency on oil. And that's all I read from this post. It's absolutely right and valid to point out that much of the decline depicted in this graphs relates to the transition away from oil-fired electricity, and that you clearly reach diminishing returns on that front (when you're not producing any electricity from oil, you obviously can't reduce your oil usage on that front any further).
But there's a larger point there, as well, particularly when you take it in the context of what JD's written on his blog in the past several years. There are alternatives and conservation methods that already exist and can be (and in some cases already are being) phased in, and they've been covered at length, both in this blog and in the other blogs that are linked to from here.
The point that "a country can reduce it's oil consumption without duress" is not a guarantee that a shift to less petroleum usage will be effortless. As JD says, however, it is something that we should be aware of and learn from. Given his previous writings on the subject, I have trouble any sort of "business as usual" agenda into JD's words.
Of course, I'm not JD, and I can only speak to my interpretation of his writing. Your mileage may (and probably will) vary.
Going back to the post's topic, what the countries in the graphs have in common is a stable, aging, and in some cases, declining population (Israel being the exception). This is not representative of the world.
What drives demand higher is the growth of middle classes in Asia, Latim America, and other places, and also people immigrating from the 3rd world to North America/Australia, who instantly acquire a first-world standard of living. Unless these trends stop, global demand will keep growing.
Of course, the bottom may fall out of the global economy.
It seems nobody knows which way things are headed.
Berniemac, your point is well taken. However, I don't think the decline in birth rates/population really corresponds all that closely to the decline in oil demand from the countries listed here. I doubt, for instance, that Denmark's population has decreased 38% since 1980.
The industrialization of a number of countries has certainly increased demand for petroleum globally. And, globally, demand is clearly increasing. I don't think these graphs do anything to refute that. But I think there's still the potential to learn from the countries shown here, much of which might be applied elsewhere to take the edge off of the demand for oil. At the very least, they might hold clues to dealing with peak oil in such a way that won't "shatter the economy and reduce the population to poverty" as argued by a particularly vocal segment of the doomer crowd.
Truth is...
Just because a country has a birthrate below 2.1 today doesn't mean that the population will decline immediately. In fact, we find that a lot of the European states have population stability or growth thanks to immigration.
Also, Israel does have a birthrate above 2.1, meaning that it's not true that population growth means "MOAR OIL!!!"
How in the market mitigating the effects of oil depletion can a system be put into place which ensures the profits being taken are re-invested into future sources of competitive, alternative and sustainable sources of energy, rather than being turned into Mega-Mansions and more ridiculous "bling" for the wealthy?
This is in my opinion a real threat to the energy transition investment and development gap.
any thoughts?
freak,
The "bling" and McMansions are a small part of the US, and world, economy. Even if the billionaires spend a lot, plenty of companies will sell solutions to middle class Americans.
Look at how quickly auto makers are all moving toward hybrids and electrics-- and this time it's a bit more believable. Do you honestly believe that Toyota and Honda are trying to sell their hybrids and PHEVs to upper-crust buyers? Nah. They're selling them to average people through economies of scale.
The Tesla-style electric will also eventually trickle down as well as economies of scale are achieved.
I think that if you look at the spending companies are doing on "greening" supply chains and such, it's clear that most companies are interested in mass markets, not niche rich markets.
I also believe that there's a good opportunity here for NEW businesses to spring up and get in on the "green game." As solar and wind becomes economical relative to oil and coal, more people will move into it.
Remember: it's not how much you make on a sale, but the net present value (or IRR) of an investment that really matters. Wind and solar are reaching that point.
Really? Then what exactly did you mean when you wrote "NIMBYs and global warming activists are jacking up the price of oil."
I meant that NIMBYs and global warming activists are preventing refinery upgrades to enable processing of heavy oil, which is being heavily discounted at the moment. That is perfectly clear from the context where I wrote it in #362.
Now, you claimed that I said: "oil prices are high because enviros have blocked drilling offshore and in ANWR". And you still haven't backed that claim up with a genuine quote. In fact, I never said any such thing. You simply fabricated that statement, and attempted to pin it on me. Ergo, you're a L-I-A-R Artie.
Now, you claimed that I said: "oil prices are high because enviros have blocked drilling offshore and in ANWR". And you still haven't backed that claim up with a genuine quote. In fact, I never said any such thing. You simply fabricated that statement, and attempted to pin it on me. Ergo, you're a L-I-A-R Artie.
Wow, your ego has really has swollen to Savinaresque proportions. I never claimed you said those 'oil prices are high because enviros have blocked drilling offshore and in ANWR' That's simply paraphrasing your direct quote: "NIMBYs and global warming activists are jacking up the price of oil." Surely even a blowhard like you can parse that.
If you want to split hairs over who's a 'global warming activist' or "jacking up prices" go right ahead.It's your your playpen, nutcase.
That's simply paraphrasing
Yet another pathetic squirm.
I don't have any problem with paraphrasing. But when you start adding new material into the paraphrase, which I never said, then you cross the line into a different practice called L-Y-I-N-G.
You've shown your character Artie. You're the type of person who will fabricate phony quotes, and then pretend you didn't do it, even though the evidence is there for everyone to see.
Speaking of NIMBYs and environmental extremists, this one is really ridiculous:
"It seems like an idea any environmentalist would embrace: Build one of the world's largest solar power operations in the Southern California desert and surround it with plants that run on wind and underground heat.
Yet San Diego Gas & Electric Co. and its potential partners face fierce opposition because the plan also calls for a 150-mile, high-voltage transmission line that would cut through pristine parkland to reach the nation's eighth-largest city."
Link
Despite the fact that large-scale desert solar is one of the best (perhaps the best) scalable sources of future growth and electricity, the NIMBYs and environuts want to shut that down too, because of the *aesthetics*. It might interfere with birdwatchers doncha know.
Smaller motor vehicles are required in countries like Italy and Japan because they have somewhat narrower roads and parking spaces than America. Hummers don't always exactly fit comfortably. (Snark)
Not everyone in America drives a hummer. I don't. but I do drive as it
is a requirement of my job. and even if it weren't it would be pretty hard to get around the hilly terrain in the 90+ degree heat without driving where i live. I do however curse SUV driving soccer moms and Ford F-350 driving Billy Badass constantly.
It seems like there is no average American anymore. Just those scraping by paycheck to paycheck cutting out coupons for canned peas, and those who drive around back and forth between their pretentious structurally controlled gated communities and the golf course or church in their bloated Porsche Cayenne S, occasionally stopping at Starbucks to berate the minimum wage struggling college student behind the counter for forgetting to put a splenda in their Half-Caff
soy latte.
Oh do I dread I paradigm shift were
people have to quit being gluttonous irresponsible abusive assholes.
I don't think we all have to be reduced to eating bugs, or plagues for things to change, but personal responsibility, and information, and people with principles who refuse to support the unethical ultimately to their own detriment.
Ideals change societies.
I am not making an argument for morality rather one for wisdom.
for a while now we have had a garbage in garbage out consumer system in my country and it is short-sighted and foolish. People need to learn to make wise rational decisions and to understand the impact those decisions have on the future on others and the world around them. There is more to life than selfish accumulation and consumption.
Furthermore the idea gathering a privileged few into a compound of hoarded food and supplies waiting for the rest of the world to just go away and die rather engaging productive cooperation to solve a common problem is the ultimate (final?) act of this brand of selfishness which created these problems to begin with.
I'm not sure what you're trying to show here, JD. You showed a graph of one country's oil production then proceeded to show graphs from some other countries of oil consumption. If you'd shown the graphs of both oil consumption and production in each country then that might have been more informative. But you seem to be suggesting that oil consumption is declining across the world, when I guess you know that to be untrue. Consumption has lagged production for most of the last couple of years.
Also, you show a near classic graph of production followed by graphs of consumption, for a handful of countries, that mostly show a very shallow decline in consumption, with some countries almost flat in recent years and at least one showing rising consumption recently. You also show no countries where consumption is probably nowhere near a peak, including some very populous countries.
You also have no discussion about possible reasons for the peaks in any country. Are the reasons always the same, and what are they?
You asked readers to take a deep breath and fasten their seat belts before viewing your few graphs of consumption. Why?
tw,
JD is showing that consumption can be decreased in countries with robust economies, even in large percentages, while standards of living remain high and populations remain fairly wealthy.
The point is to show that doomers parade around silly arbitrary amounts that will spell DOOOOOM without actually testing those numbers in real life cases to see what happens to those economies.
The fact that a country can reduce it's oil consumption without duress is like a miracle... something to really think about and learn from.
One reason those countries reduced their oil consumption is that they didn't have the US military by itself sucking more oil per year than most European countries. Those countries didn't have at the helm the most incompetent leader they'd ever had thwarting every responsible effort to reduce consumption and be environmental stewards.
Those countries you list don't have the US's toxic combination of staggering debt, rampant financial fraud, shrinking dollar and neocon war hawks.
Cutting oil consumption in the US will have major economic results. Instead of cutting consumption, the most popular US policies today are offshore drilling and begging OPEC to produce more to drive prices down. Americans as a whole don't want to cut consumption - they want to bomb Iran and watch NASCAR, and that's what most politicians want to give them.
More drilling and refining capacity will increase consumption. If reducing consumption is your goal, why not just reduce consumption, and forego all the messy, expensive drilling?
The US is going to have duress one way or the other, and more refining capacity means more consumption, more CO2, more environmental damage. Some say duress is here now.
Of course consumption has downturned in the select countries you have chosen...and let's hope the trend continues to other contries...but as of now global consumption is up..that is what matters.
anon1,
They don't have the debt?!
Italy and Japan both have government debt in excess of GDP! While they lack the rampant military spending the US has, and Italy has gotten theirs under some control, don't pretend for a second that other OECD countries don't have debt.
Japan's gross government debt stood at around 180% of GDP in 2006. The US's stood at around 62%. You do the numbers as to which state had more debt.
They don't have financial fraud?
Umm... Italy? Japan?
Really now?
I don't mean to be an ass, but are we living in the same world here? Italy alone knocks your argument to the moon.
Also, Japan doesn't have hawks? You should read up on the more conservative end of the LDP (ruling party) and their plans. Last I checked, Japan was a top 5 military spender. Not that they spend as much as a percent of GDP as the US does, but it's not like Japan is an itty bitty non-military power.
anon2,
It's only up because of the developing world.
"But they're only going to GROW GROW GROW!" you might say.
Depends. What happens if the OECD stops buying their stuff? I swear, if I had a nickel for every ceteris parabis argument I saw by people in the peak oil "community..."
I don't mean to be an ass, but are we living in the same world here? Italy alone knocks your argument to the moon.
Anyway you slice, the US is still the world's largest debtor, the US uses more energy per capita than any country on earth, spends more on military than the rest of the world combined. The rest of the world has it hawks, but they pale in comparison to ours in terms of commitment. And it precisely the combination of those problems that I mentioned as enormous obstacles to the US "cutting consumption without duress."
Sure, the US could conceivably cut consumption, and it will eventually, if involuntarily cut consumption. Rest assured there will most certainly be duress.
anon1,
You're missing the point.
Japan's debt is a whopping 180% of GDP.
180%
Let that sink in.
180% of the 2nd largest GDP in the world.
According to a recent article by Bloomberg, Japan's public debt is the largest in the world.
Seriously, I think the biggest problem with most peakniks is that they don't bother looking outside their own borders at the various problems and solutions the rest of the world has.
And let's see how the UK is doing:
"British households are now more indebted than those of any other major country in recorded history, it has emerged.
Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago. "
OK.
How about France?
"The French government is aiming to keep its public debt stable at 63.9 percent of GDP this year, finance minister Christine Lagarde and budget minister Eric Woerth said in a joint statement.
'Achieving this objective will be linked to the potential size of sales of non-strategic public assets,' the ministers said.
Lagarde and Woerth were reacting to figures published on Friday by national statistics office Insee, estimating that France's public debt rose by 41.1 billion euros in the first quarter to reach 65.3 percent of GDP, up from the 63.9 percent recorded at the end of 2007.
France has promised its EU partners that it will to bring down its debt below the 60 pct target set under Maastricht rules by 2012, while also balancing its public deficit by the same deadline."
OK OK. I know. Germany! Yes. They have tons of discipline. They must be debt free, right?
Oh, wait... Germany's public debt in 2006 was around 70%.
Shoot.
By the way, don't get me wrong. I think the US can cut a lot of fat. But I also don't believe that the US is about to go down some flaming hole of insolvency because of its supposedly EPIC debts. The problem that most people have is that they can't think in GDP terms, which is the most meaningful number for these issues.
Seriously, I think the biggest problem with most peakniks is that they don't bother looking outside their own borders at the various problems and solutions the rest of the world has.
Funny. Looking outside US borders only reinforces what colossal mistakes - omission and commission - the US made over the last couple of decades.
Google the "$53 trillion dollar asteroid" I would be ecstatic if the US would implement some of the solutions the rest of the world has implemented.
But thanks for trying to assure us that there will be no duress. I feel better already.
anonymous,
Why don't you respond directly to my arguments instead of throwing up straw men?
I'm showing you, with figures, how the US is not out of line with the rest of the world in terms of indebtedness, and you throw out an obscure factoid?
Tell me why, in your own words, it's less bad for the Japanese and Italians to have debt in excess of GDP. Why is the US some sort of pariah, when its indebtedness is well within the average range for the OECD in general?
And tell me when I said that there would be no duress. I have said no such thing. All I've said is that the US is not some outlier amongst the data we have for the OECD. If anything, it's at or below trend.
Also, list some of those solutions that "the rest of the world" has implemented.
Sure, the US could conceivably cut consumption, and it will eventually, if involuntarily cut consumption.
You're behind the trends.
As noted in#363 U.S. vehicle miles traveled (VMT) peaked 3 months ago in March, when crude was about $30-40 (and gasoline about $1) cheaper than it is now. Numerous data points are indicating that U.S. gasoline demand will decline in 2008.
Demand is collapsing all around. Here's some stats from the IEA's May 13, 2008 Oil Market Report:
Gasoline demand for March 2008 was down (year-on-year) by -8% in Germany, -4% in the UK, -14% in France, -10% in Italy, -9% in Spain and -14% in Japan. (OMR P. 6)
Diesel demand in March 2008 was down (year-on-year) by -4% in Germany, -6% in France, -5% in Italy, -10% in Spain, -10% in Japan, -4% in Korea, -3% in OECD Europe and -6% in OECD Pacific. (OMR P. 6)
Oil product demand as a whole was down -3.1% in OECD America, -2.3% in OECD Europe, -2.8% in OECD Pacific, and -2.8% in the OECD as a whole. (OMR, P. 6)
Those are very large drops, and those figures too are for March, when the crude price was $30-40 cheaper than it is now.
Furthermore, oil demand in the OECD peaked in 2005 and has been dropping ever since (See OMR, P. 51).
The idea that demand can continue to rise with prices is nonsense. It arises from the economic ignorance of peak oil theorists.
Rest assured there will most certainly be duress.
Yes, I'm sure that from the perspective of the average American, the switch from an SUV to an EV scooter, telecommuting, car pool or bus is going *seem* like extreme duress -- traveling through the "valley of death" as it were. Objectively speaking though, these changes are totally minor lifestyle adjustments. It's not business as usual, but it is functionality as usual. You're still getting from point A to B.
It's a lot like quitting smoking. The tendency is to work yourself up into a state of terror at the very thought of quitting, but after your get through the process, you realize that the "duress" was almost entirely mental -- a product of brainwashing.
The bottom line reality is that you don't need a car to live. I know this for a fact because I live a completely comfortable first world lifestyle without a car. I don't burn any gasoline/diesel at all, and I'm not experiencing any duress.
P.S. Could you please sign your comments with a screenname in the future? It makes the conversation easier to follow. Thanks.
I'm showing you, with figures, how the US is not out of line with the rest of the world in terms of indebtedness, and you throw out an obscure factoid?
The US is still the world's biggest debtor, and the US GDP - depending on whose "figures" you want to use - includes a lot of funny-money derivative shenanigans and energy-wasting crap.
Tell me why, in your own words, it's less bad for the Japanese and Italians to have debt in excess of GDP.
Extreme debt not a healthy condition, regardless of who the debtor is. The Japanese and Italians have debt problems. The US has a combination of problems in addition to huge debts; a way over-extended military facing a perpetual occupation of the Middle East and a dollar that shrinks by the day. And high fuel prices are hammering the Dow. This is no strawman, its a nasty combination of serious problems that will be exacerbated by high energy prices, causing duress by anyone's measure.
And tell me when I said that there would be no duress.
Read JDs post, he said: "The fact that a country can reduce it's oil consumption without duress is like a miracle... something to really think about and learn from."
Also, list some of those solutions that "the rest of the world" has implemented.
It was you who wrote:"I think the biggest problem with most peakniks is that they don't bother looking outside their own borders at the various problems and solutions the rest of the world has."
So I guess you're familiar with these solutions since you bring them up. One solution is nuclear which France uses to its advantage. I suppose you could call wind and solar solutions.
I don't deny there are solutions. The US will still experience duress from high energy prices. It's not as simple as giving everyone an electric scooter and a stimulus check.
anon,
The US is still the world's biggest debtor, and the US GDP - depending on whose "figures" you want to use - includes a lot of funny-money derivative shenanigans and energy-wasting crap.
In other words, you just don't want to frame this properly from an economic perspective.
Let me use a good classic microecon example.
Let's say you have two people: one person makes $10,000 a year, but has $20,000 in debt. Another person makes $100,000 a year, but has $60,000 in debt. Assume both have similar margins on spending.
Who's worse off, all else being equal?
Extreme debt not a healthy condition, regardless of who the debtor is. The Japanese and Italians have debt problems. The US has a combination of problems in addition to huge debts; a way over-extended military facing a perpetual occupation of the Middle East and a dollar that shrinks by the day. And high fuel prices are hammering the Dow. This is no strawman, its a nasty combination of serious problems that will be exacerbated by high energy prices, causing duress by anyone's measure.
I don't necessarily disagree. However, you're making many different arguments at once.
On the one hand is the occupation of the ME. I agree that that should end, especially if you agree with a lot of the political scientists who think that it exacerbates ill will and terrorism aimed at the West. No arguments here.
As for the dollar shrinking, it's not entirely sure WHY that's happening. However, don't assume that a strong Euro is necessarily ideal for everyone in the EU, either. Remember, the more your currency is worth, the less you can export. It's great for import-oriented economies, but you'll notice that a lot of exporters are really hurting from the strong Euro.
There's no secret as to why the Japanese and Chinese have fought tooth and nail to keep the Yuen and Yen relatively cheap to the dollar. It's good for export economies to have cheap currency.
Cheap dollars will be a boon for exporters and domestic industry to an extent. That's just simple macroecon.
It was you who wrote:"I think the biggest problem with most peakniks is that they don't bother looking outside their own borders at the various problems and solutions the rest of the world has."
So I guess you're familiar with these solutions since you bring them up. One solution is nuclear which France uses to its advantage. I suppose you could call wind and solar solutions.
You're changing your arguments to an extent. First you're talking about financial woes, now you're talking about substitute products.
Why should the US, other than perhaps a little prescience, have switched to all nuclear like France when the public was against it and the costs were relatively prohibitive? Do you think that France went nuclear out of sheer love for the environment and hatred for oil?
France and other countries went anti-carbon because of their treaty commitments, because they couldn't afford not to, and because they had different policy environments.
I doubt, however, that the US will be a holdout for much longer. For one, the US policymaking apparatus can't afford to rely on petroleum, and if there's one thing that gets American politicians moving, it's the threat of removal from office.
But I don't think that the US and the EU will be completely pain-free for the coming decades, if anything mostly because they all have a number of issues facing them.
Still, you point at the US debt as some sort of example of poor policymaking, but you don't put it into a reasonable CONTEXT. The problem I have with your argument is that it's not framed properly, relative to how debts work in most OECD countries.
It also doesn't look at the national histories of debts in any number of nations, including the US.
Ari said
anon2,
It's only up because of the developing world.
"But they're only going to GROW GROW GROW!" you might say.
Depends. What happens if the OECD stops buying their stuff? I swear, if I had a nickel for every ceteris parabis argument I saw by people in the peak oil "community..."
the problem with this is that so much of the OECD employment revolves around selling and using these products. A decline in purchasing means loss of jobs, therefore less people spending leading to even less purchases of products and services. It wouldn't be an issue if the OECD manufactured most of the stuff it buys.
jt,
Markets are pretty quick to adapt.
http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-jobsreturn_29emp.ART.State.Edition1.4d8fef9.html
Sure, not all jobs will move back to the US, but some will.
Plus, purchasing WILL necessarily decrease during a credit crunch. It's almost guaranteed at this point. Less money flowing to China will mean less money over there spent on oil.
And again: China cannot hope to subsidize oil forever and ever. Even the Chinese have admitted this. Why are peakniks the ones that don't believe it?
Several people now have pointed to JD's parting shot ("the fact that a country can reduce it's oil consumption without duress is like a miracle...") as if it were some kind of prediction. This is the straw man I referred to earlier: it's easier to argue for the premise that there might be duress than to argue against the premise that duress is not a foregone conclusion.
The fact that several nations have, in fact, reduced their reliance on oil while maintaining overall social and economic health is the point of this post, and the charts provided are the evidence. As JD says immediately following the above-quoted excerpt, this fact is something to "think about and learn from." It's not an iron-clad guarantee that peak oil will be a non-event, or "business-as-usual," merely an argument that it can be done. If it were a promise that nothing need be done, what would we learn from studying it?
To strain a metaphor, I would be perfectly correct in pointing out that not everyone who drives a car will get involved in a fatal crash. This is in no way a promise that no driver will ever get involved in an deadly accident. It is also not an excuse to avoid taking steps to reduce the likelihood of a crash occurring (such as safe, conscientious driving, proper automotive maintenance, etc).
I agree that many countries can reduce their reliance on oil, such as Japan and many european countries. However the US and Australia are two countries that will find this much more difficult due to the lay out of their population's living arrangement - suburbia. This is far more energy reliant than the medium to high density living in Japan and Europe. i think it will hurt there a lot more. It will be difficult to redirect investment into rail and buses if we are falling into a deep recession. Especially when the issue is purposely confused by other interests such as oil companies (eg GW). At the same time steel prices are going through the roof so the costs are escalating by the month to build new infrastructure.
A good comparison of the situation is
http://bp2.blogger.com/_kdcZbozWthI/SFRB8P4cEpI/AAAAAAAAAcw/UmQ2BAQNOEo/s1600-h/ConsDelta.gif
While it may be harder to the U.S. to cut it's demand from Oil, doesn't mean it can not be done. Sure Americans are wasteful. But you would be surprised at how quickly things can change...
Yes it'll be a bumpy road and I personally think that the worst that could happen to the U.S. is a depression.
I've read a few articles, btw, about U.S. families moving closer to work because they can't afford the 40+ mile commutes every day.
Also the U.S. carfleet will switch out 3 times in seventeen years. The best way for the U.S. to take advantage of these particular problems is to buy transportaion that gets much better milage.
There will be duress, how much, no one is certain.
Though I don't know if the U.S. will be in duress for decades to come. I see a deacde at the most, but I could be wrong.
It's not an iron-clad guarantee that peak oil will be a non-event, or "business-as-usual," merely an argument that it can be done.
Merely on the basis of the information given - arguing that it can be done is false (I'm not saying it can't be done - I'm only disputing the relevance of the information given). In fact the information only tells us what could be done. I realize I probably sound like a smartass here and I don't want to since I thought this was positive and useful information regarding the issue.
Nonetheless the conclusions were too hastily drawn. What we need here is to attribute the decreases in oil demand in order to make sure that
a) we haven't cut most of that excess fat already
b) the consumption hasn't moved abroad (heavy industry - a large consumer in my own country at least)
My views are based on the premise that we probably need to cut oil usage in the transportation sector - which we haven't really done in the past (at least to a great extent I think, looks more like the opposite to me)- and that there is little to be gained elsewhere.
Look at China - they're quoted as the top dog of rising oil demand. JD quoted World Bank figures in an earlier post "oil-fired power generation" that China was one of the top generators. Measured in barrels i believe it was something in the order of 400-500kb/d. I believe they have steadily been decreasing this already (replacing it with coal and natural gas) and still demand has been going up. Most of the demand rise has afaik been quoted to come from transportation.
Only if there are other easier sources than transportation from which we can cut demand can it be as easy as in the past. Otherwise I believe the difference is going to be something in the order of foreplay and double penetration :) So please don't lure a virgin into believing double penetration is as nice as foreplay :)
Australia really has quite low oil useage - I see your point about their American style problem but it would probably be relatively easy for them to use Syncrude from Coal liquification. *Not* that I encourage this sort of thing.
Who's worse off, all else being equal?
This is the problem; you seem to think that this hypothetical situation of yours is "framing the issue properly," when "All else" is never equal and never will be.
If you want to insist on proper context, you're not going to get context by waving your hands and proclaiming "all else is equal."
If you think the US debt and deficit are acceptable and/or inconsequential given the GDP, then we simply disagree.
And again, it's not just the debt that will cause extreme duress in the US, it's the COMBINATION of debt, expensive energy, unfunded mandates, and bone-headed policy making that will cripple the US.
say JD, when is that price correction due?
The bottom line reality is that you don't need a car to live. I know this for a fact because I live a completely comfortable first world lifestyle without a car. I don't burn any gasoline/diesel at all, and I'm not experiencing any duress.
Do you suppose you consume as much as the average japanese person? What do you suppose would happen if all of Japan would consume like you do? If consumption becomes less convenient it's likely that less will be consumed. Only equal convenience and consumption with decreased use means business as usual.
I may be wrong but I believe that it won't be just a good thing we start using less oil even though I believe it is inevitable.
Most certainly I believe it will involve some economic hardship.
The bottom line reality is that you don't need a car to live. I know this for a fact because I live a completely comfortable first world lifestyle without a car. I don't burn any gasoline/diesel at all, and I'm not experiencing any duress.
Do you realize how arrogant you sound? You assume that because you are not experiencing duress, that no one else should either. You sound like a modern day Marie Antoinette. Instead of "let them eat cake," it's "let them ride an electric scooter."
This is the problem; you seem to think that this hypothetical situation of yours is "framing the issue properly," when "All else" is never equal and never will be.
You're right. It's not a perfect way to develop a model. But it's also a way to muddle through all the noise in the variables and understand, at least in part, how things work.
If you want to insist on proper context, you're not going to get context by waving your hands and proclaiming "all else is equal."
It's called an assumption, for better or for worse.
The ceteris parabus assumption: "Such assumptions are also relevant to the descriptive purpose of modeling a theory. In such circumstances, analysts such as physicists, economists, and behavioral psychologists apply simplifying assumptions in order to devise or explain an analytical framework that does not necessarily prove cause and effect but is still useful for describing fundamental concepts within a realm of inquiry."
I'm trying to get you to work around the notion of relative size.
If you think the US debt and deficit are acceptable and/or inconsequential given the GDP, then we simply disagree.
I've never said that it's acceptable or inconsequential. I just don't think that it's exceptional relative to other states.
And again, it's not just the debt that will cause extreme duress in the US, it's the COMBINATION of debt, expensive energy, unfunded mandates, and bone-headed policy making that will cripple the US.
If the debt is going to cripple the US, then what about the rest of the OECD, who are spending MORE ON DEBT?
This is what you don't seem to get. It's not how big your debt is, it's how much of your income you spend on debt that matters!
This is what you don't seem to get. It's not how big your debt is, it's how much of your income you spend on debt that matters!
I'll try once more, I wrote:"...it's not just the debt that will cause extreme duress in the US, it's the COMBINATION of debt, expensive energy, unfunded mandates, and bone-headed policy making that will cripple the US.
You do understand the word "combination" don't you? The US debt and perennial budget deficits are bad enough taken on their own. We spend enormous, increasing amounts servicing that debt, and the fact that some other countries spend relative amounts servicing their own huge debts does not vindicate anyone's foolhardy economic policy.
It's the COMBINED effect of the crushing debt and the prospect of ever increasing energy prices, perpetual war, staggering unfunded mandates in the areas of social security, health care, etc. that guarantees duress for future generations of Americans.
anon,
Then the entire OECD is going down with the US, aflame in a blaze of inglorious decline.
You really ought to look into the problems facing other countries' fiscal status before harping on the US as an exemplar of poor policy making. Everyone in the OECD has some fiscal bumps to smooth out-- especially Japan.
Wow if I didn't know any better I would say that Anon is just another Doomer...
It's ad really, apparently Anon is anti american...Of course anon the evil american empire will burn while everyone else is A-OK!
Smaller motor vehicles are required in countries like Italy and Japan because they have somewhat narrower roads and parking spaces than America. Hummers don't always exactly fit comfortably. (Snark)
Heh, ever had to share the road with one? There's not a lot of places here in America where they fit comfortably either :->
I know several people who're in the market for used cars. Nice to hear. It's also nice to see how quickly people here (an economically depressed part of the U.S.) are adapting. Shoot, if we get the big trucks and SUVs off the road as commuter vehicles, demand will drop further. It's not so much that we need vastly better mileage as much as it is that we need less usage. The elimination of oil as a power source can happen at a slightly more sedate pace. Heck, if food prices stay higher, then maybe companies like Toyota and Nissan can start using one seat size worldwide (heh.)
ari, it's amazing that other people can't figure out debt as % of GDP. Even with racking up a boatload of debt we're just right on par with European nations right now. Just like you, I won't go on to say everything's peachy, but I do tend to agree that these calls that we're DOOMED seem to be a bit premature.
"Then the entire OECD is going down with the US, aflame in a blaze of inglorious decline. "
Hate to break it to you slick, but who exactly is going to take the OECD's place?
The vast majority of China and India's population have the income level of sub-saharan Africa. Same with Brazil.
They have had alot of growth, but all three of these countries have some major major flaws in the economic planning and policies.
China and India are more oil dependent on OPEC than the United States is. The Middle east outside of Dubai and Saudi Arabia is so ass-backwards with the Islamic terrorist bullcrap that they can barely keep their economic house afloat.
I understand your contempt for the OECD, but to call for its death is absurdly premature. Even now, it still accounts for about 75% of the economic activity in the world and is responsible for the vast majority of the technological innovation.
http://news.yahoo.com/s/ap/20080630/ap_on_re_us/college_transformation;_ylt=AkpDm37pDir00QT0l07Z9LJH2ocA
Since this peak oil stuff is always so gloom and doom, I figured I'd post something that shows the urban renewal created in part b/c of high gas prices. It's great stuff!
I have a serious question to offer to anyone who can "shoot me straight"
IF the U.S. wasn't in a recession and say we were not at war with Iraq, no tension with Iran...and the dollar was qutie strong how much would Oil cost?
And I've just heard of peak oil. What are we facing, I've heard that we can't do anything about it and that we're all fucked basically, is this true?
-Justin
econogeek,
Read all of my posts. You'll notice that I was NOT calling for the end of the OECD at all. That last statement was facetious in light of an anon's inability to understand how the debt-to-GDP ratio is a more telling figure than the gross national debt.
I'll assume you didn't go through all of my and the previous posts-- after all, who wants to read through 70+ responses? Really, I've been arguing FOR the OECD despite the sizable debts simply because I know that debt, in and of itself, isn't a bad thing-- anyone with a class on basic finance can tell you that much.
Justin,
And I've just heard of peak oil. What are we facing, I've heard that we can't do anything about it and that we're all fucked basically, is this true?
Don't bother falling into the "peak oil is the end of the world" claptrap. It may be a big deal, it may not be a big deal. It's impossible to say. I suggest that you read from someone who's actually trained in economics, like James Hamilton at UCSD.
http://www.econbrowser.com/archives/2005/07/how_to_talk_to.html
Don't bother with the idiots at the doomer sites like LATOC or dieoff. They're just selling a brand of calamity juice that goes down easy if you're into Malthusian population culls and end of the world scenarios.
If you want to worry about the end of the world, I'd worry more about something like, I dunno, a supervolcano or something. At least that's unpredictable.
Justin
If all that you ask were true, probably there would not be a much of a difference in price because it is all about the fundamentals - demand has out-stripped supply.
I would recommend reading theoildrum.com as it has the most experts writing on it.
I would be wary of what most economists think simply because they believe that infinite growth can occur in a finite system. It can't - period! That doesn't mean doom doom doom it means retraction and a downsizing in our lifestyle. You see it isn't really about peak oil it is about peak population. The sooner we realise that resources and our environment are collapsing then we will have a real chance to save ourselves.
I would also google albert bartlett population energy and watch his lectures.
JT
What do you mean by downsizing our life style. If you're speaking of getting rid of the mini tanks out on the roads and having folks move out of those ridiculus mansions, moving closer to work. I would be all for it.
But really what do you mean?
Ari, Thanks for the insight. Doom and Gloom has never gotton to me and it never will. To me where there is a will there is a way, a way forward. I understand that this won't be a walk in the park...as long as my children are able to grow and get an education I'm fine. As long as I can heat/cool my home I'm fine. I'll chase that link later when I've more free time.
Oh...and being able to watch my 50" flat screen I'll really be fine! lol.
Well guys thanks.
BTW Anon I did a bit of resaerch and it seems as though supply is still in excess of 2mbd and demand hasn't outstripped it as of yet, though I am sure this will most certainly happen by 2010...maybe...
-Justin
Justin
Demand has outstripped supply, the 2mbd oil you are referring to is heavy sour that there is very little refining capacity in the world to deal with it. Pretty much no one wants it at the price being asked because they would lose money trying to refine it.
As far as downsizing goes for the majority (not the very rich), I think that the massive increase in the price of fuel, food and other items will collapse our finicial system which is based on growth. As people's belts tighten less will be spent on luxuries first and then necessities. This will flow through the system causing job losses.
All of the inefficent living systems that make up most of the US and OZ (where I live) will start to come unstuck. It is not really an easy thing to replace highways and shopping malls with more energy efficient mechanisms simply because of where those things lie in the landscape. Essentially we are too spread out.
Now I would argue that food not being as abundant in the US and OZ is a good thing considering how fat we are. Maybe people will turn to bicycles, that would be great. the issue is that people will resist change as long as possible which will just make the situation more difficult.
The biggest personal problem is your debt. Things can turn bad financially very quickly and it really looks as though the perfect storm is brewing right now. If you are in debt then what you have can be taken away from you the moment you can't meet your repayments and that is a scarey place that many are now facing. Didn't they also change your bankruptcy laws in the US a year or two ago making it harder to declare bankruptcy (chapter 7?) and just walk away?
Personally I see the writing on the wall which says the day of the consumer is fast coming to an end.
JT
wishful thinking JT.
you just want to be a wise king among idiots.
If there were an issue here regarding
the "American Condition" (as if there were something intrinsically genetically different about Americans) is that there has been a lack of education and responsibility.
If you need a 3 story house 30 miles from where you work an SUV a Corvette and a Boat then yes.......Your ridiculously cheesey
pretentious lifestyle is probably in for a jolt.
So you might end up in a Townhouse 2 miles from where you work driving a 4 cylinder compact car. and you and the kids might walk down to the neighborhood pool to go swimming or
to the park to go fishing rather than burning up 150 gallons of gas going to the lake every Saturday.
You might meet some of the people who live around you and they might actually not be so paranoid and pretentious as to have a genuine conversation instead of obsessing about lawn care.
This is not doom but rather a return to a rational lifestyle.
JT,
Economists do understand that the world is finite. You just don't seem to understand economists.
The first word you learn in economics is scarcity. Learn it. Love it. Understand it. Scarcity implies that any resource is FINITE. That's what economics is, essentially: the study of how humans deal with scarcity.
It's idiot peakniks and doomers who don't understand that, and think that GDP growth = UNLIMITED RESOURCES. It's just not the case. GDP can grow even within a finite system. It's also the case that economists can offer insight into scarcity scenarios that geologists cannot.
Besides, the peak oil community literally eats out of Matt Simmon's hand, and he's an MBA from Harvard. But I suppose someone like James Hamilton, who gives those MBAs the tools they need, is not a good fellow to listen to. After all, we should always just listen to one side of the story!
Scarcity implies that any resource is FINITE...It's idiot peakniks and doomers who don't understand that, and think that GDP growth = UNLIMITED RESOURCES. ..GDP can grow even within a finite system.
And it's junior college intellectuals, (and GOP operatives) who seem to think there are - or should not be - limits to economic growth, even in your FINITE world.
Besides, the peak oil community literally eats out of Matt Simmon's hand
Ask your mom to look up 'literally' for you in the Funk and Wagnalls.
anon,
You're right. I made a gaffe. I should have said, "the peak oil community can be imagined as eating out of Simmons' hand, gobbling up everything he offers." I apologize for that, and will make sure to avoid any misuse of the language in the future. You're completely correct in criticizing that error from a usage perspective.
The point that you didn't deal with, however, is whether or not there is a double standard in the peak oil community. On the one hand, you have guys like Simmons, who are MBAs with classical econ and finance training. They get a lot of support and airtime from the peak oil community because they say what the peak oil community wants to hear.
On the other hand, you get guys like James Hamilton, who say that things are a bit more complicated than many, including Hirsch and Simmons, seem to believe. They get slammed as "cornucopians" or whatnot. To say that economists are all necessarily of the belief that growth can continue forever is, at best, painting the field with a very wide brush. I doubt that Amartya Sen and Milton Friedman would agree on much, if anything. Yet they're both well-known and respected names in economics.
And it's junior college intellectuals, (and GOP operatives) who seem to think there are - or should not be - limits to economic growth, even in your FINITE world.
I've never actually touched on this, one way or another. I'm actually not sure what the limit to growth should be, if anything. I do know that I find the belief that we should keep GDP at the current level to be somewhat absurd, since it implies that the dirt farmers in Africa don't get a shot at some decent living.
But should everyone consume billions of dollars a year? I don't know. I can't say whether or not we can, or should, do that. I just don't believe in looking at one side of the story to fit your beliefs. It's important to see everything through as many lenses as possible.
Also, please, if you are a previous anon, give yourself a name. It helps the flow of conversation.
I've never actually touched on this, one way or another. I'm actually not sure what the limit to growth should be, if anything.
And that's one major reason that you and JD get so little traction with your debunking schtick. If you really understood the implications of finite resources, you'd know there are limits to growth, and the really astute observers understand that we need substantial reserves of the essential resources to remain a viable culture. Consuming all we produce as we do now, where supply and demand are always tightly coupled and inelastic, is not a healthy way to live.
And FYI, ridiculing environmentalists who understand the limits to growth as morons and idiots reduces your credibility to zero.
anon,
I don't get how you got from going after a usage gaffe to this, but I'll roll with it.
You'll notice that I've never said that growth SHOULDN'T end. You'll also notice that I've said that I don't know that we should all consume massive amounts. I've only said that I'm not sure what the limits are/should be. The problem is that it's incredibly hard to figure out how/when we limit growth.
Do we cap it at the minimum GDP to live a first-world lifestyle? Or maybe enough to live at just above subsistence?
I'm trying to deal with the normative aspects of this, more than anything. On the one hand, I do believe that some American-style consumption reduction is in order, and have believed this for a long, long time.
On the other hand, I believe that the average person in Africa deserves a roof over her head, some food for herself and her child, and a chance at a decent standard of living.
Now, how do these various issues get reconciled? I don't know. I don't claim to know how much we should consume.
And FYI, ridiculing environmentalists who understand the limits to growth as morons and idiots reduces your credibility to zero.
I've never done this. Where on Earth do you get this from? JD has, perhaps, but I have not. Don't put words in my mouth, please.
I do admit, however, after a year's worth of environmental science coursework at the university level (University of California) (or my "junior university", if you want to continue to be insulting), that it's hard to pin down exactly how to deal with the data we have. I believe that as much as Diamond (whose class I took was phenomenal) is correct to caution societies, Lomborg has interesting points as well (much maligned as he is.)
I do, however, believe that a lot of the peak oil community tends toward the extreme soothsaying of men like Savinar and whoever the chicken little that started dieoff is. After all, it's very easy to be pessimistic. Wars, famine, global warming, nuclear proliferation, terrorism, and a litany of horrific problems face us during our lifetimes.
I'm merely cautioning against listening to that side of the story alone. Getting a multi-discipline view of the situation gives clarity where possible. What Hamilton offers that Staniford doesn't is an understanding of how markets tend to work in good times and bad times. What Staniford offers is an understanding of the future of oil production.
You can't understand how the market will react to declining oil production, however, by listening to Staniford alone. That's where Hamilton comes in.
It is very easy to be pessimistic when the first world elects morons like Bush, Blair and Howard to run their countries. Really how can we truely hope for good outcomes that are fair to humanity and the environment when it is major corporations with their puppets who run this world. Lets use the free market to sort everything out, out of most of our hands into the very rich few.
Ari if you have really listened to Diamond then you would understand that the civilisation we know could easily collapse. Then you won't need to watch zombie films you love you can just watch the horrors unfold around you.
I also love the line that people like Freak suggest - Move out of the suburbs from your big house and such back into the city. This implies that firstly you can sell your big old house in a collapsing market (already 15% down average in US suburbs hardest hit) without getting into more debt. Then there is an expectation that stacks of inner city housing will be available. No, what will happen is all of these people in massive debt will regret their naive choice in believing that growth will continue for the next 30 years and they can continue to service their debt. The middle class is only able to survive with cheap energy and plentiful resources so that it can consume, consume, consume. In order to keep consuming it will eat itself.
One thing I know for sure is that if you expect your government and the free market to help you out when the mess gets bigger - you're dreaming, just remember Katrina.
jt,
Diamond himself said at the end of Collapse that scaling the various scenarios is not a perfect science. It's one thing to talk about a relatively closed system like Easter Island, and another thing altogether to talk about interconnected economies like we have today. It adds a lot of noise to the model.
He even said something to that effect during an interview on PBS. Even Diamond, who is held up as a patron saint of doomitude, said that he is "cautiously optimistic" in Collapse
I agree that society CAN collapse. But predicting its collapse is, at best, difficult.
JT and the other doomers:
If you want to rattle off doomer soundbites, head over to peakoil.com or drumbeat. This blog isn't the latest beachhead for doomer swill. If you have something substantive to say about the topic at hand (demand destruction, conservation etc.), by all means do so. If not, shut the fuck up.
Interesting new data point -- giant drop in U.S. oil demand. And the figures are for April -- when WTI was still about $110-$120.
*****
EIA revises down U.S. April oil demand by 4.2 pct
Monday June 30 2008
WASHINGTON, June 30 (Reuters) - U.S. oil demand in April was 863,000 barrels per day less than previously estimated and down 811,000 bpd from a year earlier, putting petroleum consumption at the lowest level for any April month in six years, the Energy Information Administration said on Monday.
The lower oil demand was due to rising fuel prices and a faltering U.S. economy that has cut into petroleum use.
*****
Link
For comparison, 800,000bpd is equivalent to the total increase in Chinese oil consumption from 2005 to 2007.
Graphic
I think in all of this we need to separate the fundamentals from the bullshit.
Oil is rising because:
1. "Perceived" tight supply and demand: Traders/the market think that supplies are not ample.
Matt Simmons/Boone Pickens/Jeff Rubin/Arjun Murti/Jim Rogers/and the other very biased talking heads have convinced the world that we are running out of oil to the point where everyone on tv just repeats the mantra without digging into the data.
2. Commodity Securitization:
http://news.yahoo.com/s/ft/20080630/bs_ft/fto063020081122367597
Points:
" For the investment banks that need underlying exposure so that they can package commodities into structured products to sell on to their customers, it [speculative investments in commodities] can perhaps be seen as investment just as investment in subprime mortgages was needed to create CDOs and asset backed securities."
In English, Wall Street is securitizing commodities just like they did mortgages and credit instruments.
What is securitization you ask?
Well, basically Wall Street purchases long dated contracts of lots of commodities, slices up the bundle into different tranches of risk like high yielding debt and then sells it off to hedge funds.
In the case of mortgages from 2005-7, this created artificial demand that manifested itself in markets all over the world, thereby creating a perceived shortage of housing in the market. At the retail level, it manifested itself as real demand and the CEOs of all of the builders did not question the source of the demand. (BTW...just to establish my credibility on housing, I've been a land acquisition manager and market consultant for several Fortune 500 development companies in the US for the past 7 years.)
Oil is having a similar dynamic. Oil sits in tankers off of the coasts of several producing countries, the price goes up, people stop buying, more oil sits in tankers, etc. At some point, there is an inflection point and the incremental supply will be recognized by the market.
3. The Weak Dollar/Confidence Crisis in the US. The Fed/Treasury, etc. is more concerned about saving Goldman Sachs from itself than keeping a lid on inflation.
Don't even get me started on the reckless Term Lending Auctions and the negative real interest rates.
3. Geopolitical friction. Russia/Mexico/Nigeria/Venezuela's ass backwards policies have limited production by upwards of 4-5 million barrels/day (from a combination of better oil field maintenance, project management, more investment, etc). If we had those barrels now, I don't think we'd have $140 oil.
Now for the bullshit that has become ingrained in the market:
1. Peak oil is not happening right now. Supply stagnated in 2005 because there was an oversupply and stagnated in 2006 because OPEC cut oil production over 1 million barrels/day. We are 1.5-2% higher this year than last year and are set to go significantly higher.
Construction delays due to above ground issues (lack of skilled workers, equipment shortages) not below ground issues have created much of the stagnation. Some of these will be resolved over time as more offshore rigs get built and younger people are trained to manage oil projects.
Now...do I think peak oil will happen sometime in the medium term? It looks increasingly likely that the peak point will be somewhere around 2012-2014ish, based upon much of the data I've seen (even that stuff is somewhat hazy though too). But that's a 4-6 year horizon and is definitely not today.
2. Runaway demand is not occuring. See JDs posts on demand destruction.
3. Iran will cripple itself if it starts an international row over its nuclear ambitions. The US Navy could basically with its proverbial eyes closed knock out all of Iran's naval facilities. Most of Iran's naval technology is from the 1960-70s. The US technology is current and far more deadly.
They can't really afford to cut off the Strait of Hormuz. Iran imports nearly all of its gasoline and would suffer from shortages of refined products (which would occur b/c worldwide shortages would force the rest of the world to curb exports to Iran) that would cripple its military and civilian population.
Iran has nothing to gain nuking Israel. If they get the bomb and nuke Jerusalem, they're dead b/c every other nuclear power can easily obliterate their entire country. Even that whack job of a president they have knows this.
What they really want is leverage to negotiate their way into power in the Middle East a la North Korea and Pakistan.
Sorry for the manifesto...I know its a bit long
http://news.yahoo.com/s/ft/20080630
/bs_ft/fto063020081122367597
Sorry for the bad link
JT,
OK!
Forgive the somewhat juvenile metaphor but,
Collapses in structural terms only happen to structures which only have great strength when the are perfectly rigid, likewise brittle. the HABITS regarding lifestyle and consumption are malleable and flexable and occur over long periods of time. (think about what you can do in 1 hour with determination) Change can happen but it requires patience and resolve. Don't mistake stubbornness or laziness, or pessimism for impossibility.
I cannot understand why there is a tendency to split this issue so starkly black and white.
Is it an innate personal disempowerment?
We have more options than we have barrels of oil in the ground; do something; encourage local production through your purchases, find employment close to home, cut your energy consumption, garden, compost your trash, set up a swap meet instead of throwing things away, educate yourself, connect with people in your community, encourage them to do the same, don't just crawl in a hole with a bunch of canned beans and a shotgun.
Why didn't the OP show charts for China, The US and England? Just because a few small countries have hit a temporary peak and subsequent decline doesn't mean the world has. The poor economy and high prices is what is lowering demand temporarily in the US, but can this last forever? Do we want to be in a recession forever? I hope and pray that the US can switch over seamlessly to another energy source. Cheap energy is what makes our lifestyle possible and without it, there will be major problems. Some people overstate the problem, but far too many understate it.
1978 Oil Crisis
President Jimmy Carter appeared on national television in 1977 to declare America’s dependency on foreign oil to be “the moral equivalent of war”. Few listened. Certainly not Congress.
That left America Vulnerable – again – when the Shah of Iran was deposed in 1979. Iranian oil production came to a standstill. Oil production was further reduced when war erupted between Iraq and Iran. Shortages pushed oil prices up 162 percent by 1980, and the price of gasoline doubled by 1981. Inflation exceeded 10 percent per year for three years in a row. By 1983, unemployment had reached 9.6 percent.
Tens of thousands of Americans waited – sometimes vainly – in long lines at the filling station. There were shootings, riots and strikes. Congress reinstated controls on gasoline consumption. Some areas imposed an odd/even plan on gasoline purchases.
Now, that is what I call adapting to peak oil. Certainly it is possible to adapt to peak oil future scenarios, but are we ready and willing?
~Idiocracy~
Now, a graph says less than a thousand words and in this case is a straw-man argument.
It is nonsense to look at a single country. The reason that most industrial countries has seen some drop in domestic oil consumption is due to having exported that consumption along with the manufacturing jobs. These are now located in for example China, meaning that oil used for manufacturing cheap plastic stuff isn't included in domestic consumption - we import the plastics finished products, not the oil.
And look at my home country, Sweden.
Sweden did a massive conversion due to the 70:s oil shock, and built nuclear power plants and scrapped the oil use in industry, heating and electricity generation. Once that was done, the consumption of oil has been flat for almost 30 years. There hasn't been any room for any more decreased production.
This is in spite of tens of thousands houses still converting away from oil heating every year. This is a prime example of not being able to reduce consumption more.
And the other countries graphed , not Sweden, has gone over to natural gas instead of oil for heating and electricity generation. Now natural gas will peak about five years after the oil, around 2015.
Now, the connection between oil use and the economy isn't in heating houses, it's in transporting goods, and now in a just-in-time economy requiring transports.
So oil consumption other than transports has been almost eliminated domestically, and the manufacturing of plastics has been moved abroad.
That's the reality, not a graph. Global consumption is increasing.
And btw, many of the graphs show increasing consumption the last few years, in spite of several 100% increased oil price. Think about that.
Liz,
The point is, the transition isn't going to be very easy. Puttting down peak oil theory merely delays the inevitable changes we should be making right now, but aren't.
Why are folks here so hell bent against peak oil theory? It's true. Hubbert predicted production would peak in 2010, and here it is, right on schedule. Global oil production plateaued in 2005. The decline may begin this year...
Lou
This is incredibly misleading - these graphs are showing fluxuations in consumption by "Thousands of barrels per Day" while thier consumption as a collective nation (varying by nation of course) would run in the Millions of barrels per day.
Analogy: if it takes you 30 gallons of gas to get to work per month, but then you add tire pressure that helps your fuel economy by 5 gallons per month- so now you need 25 gallons each month - that little tire pressure assistance doesn't mean crap if all of a sudden the local gas station only has available 15 gallons per month.
This arguament is a farse! When worldwide oil does peak, supply will NOT be measured in the "Thousands of Barrels" category. With a reduction of millions of barrels being available, economies will be drastically altered!!
For example - Japan's Oil Consumption in oil for 2005 - was 5.578 million barrels per day!! So who cares if that drops by a few thousand barrels! Its insignificant!!!!!! Think people!
Anon, in the period 1979-1983, world oil production dropped by 14% or 10mbd. The results were hardly catastrophic. See 324. THE BIG GLITCH.
Analogy: if it takes you 30 gallons of gas to get to work per month, but then you add tire pressure that helps your fuel economy by 5 gallons per month- so now you need 25 gallons each month - that little tire pressure assistance doesn't mean crap if all of a sudden the local gas station only has available 15 gallons per month.
Yah, that's the point where you buy a scooter, ride a bike, carpool etc. Pull your head out of your ass.
Unless I am misunderstanding it, these graphs are oil consumption per capita which has gone down because of efficiency, but with larger populations, what was the actual oil consumption? I am no doomer, but make no mistake, peak oil is going to be hard, especially in the US where our entire society is set up to work with plentiful, cheap energy.
Whilst i understand that some of the less oil-ravenous countries in the world have wisely been able to reduce their demands in the last decade or two, i would like to see a similar graph for, say America or China.
the needs of a small country like Denmark or Israel are but a drop in the ocean compared with the US and China, and seeing those graphs on a downward curve would certainly allay many more fears. Somehow, i don't think demand and usage has peaked, or at least is tailing off in the largest consumer nations.
if you can find these graphs and prove me wrong, please send them to up_all_night_writing@yahoo.co.uk
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