394. CONSERVATION STIMULATES THE ECONOMY
Many newcomers are confused about what we stand for here at Peak Oil Debunked. So today I'd like to describe our basic position, and how we differ from the more pessimistic mainstream of the peak oil community.
The main difference is that the pessimists focus obsessively on the supply side. They are committed to the idea of societal breakdown or collapse, so they constantly fret about supply, like Dave Cohen:
Here's the main point: Can anyone, anywhere, point to a large new secure supply of crude coming online anywhere in the next few (5) years that solves the supply and demand equation in that time frame and beyond? I think not.When the IEA draws some crazy curve which says world demand is going to be 121mbd in 2030, pessimists like Dave really take it to heart. They genuinely think that the world is going to need that much oil. That is why they are pessimistic. The world will need 121mbd, but it's unlikely that amount will be forthcoming, so the system is going to breakdown.
That's the doomer view in a nutshell, and it's nicely captured in a recent graph from the Oil Drum, which Gail Tverberg uses to terrorize the wide-eyed newbies in her presentations on peak oil:
Note that Gail and her fellow pessimists are very careful to never question the unexamined doomer assumption, i.e. to ask: "Is all that oil really necessary?"
I, on the other hand, am an optimist. I believe that most oil is wasted and conservation is actually quite easy. I don't believe we need most of the oil we are using today, so the failure to meet the 121mbd target is not really a big deal. Like I wrote back to Dave:
The error in your ways is that you are thinking only in terms of supply side solutions. You think that the failure to meet demand is a terrible problem. It's not. Most oil demand is for frivolous, wasteful uses (like single person commuting in the U.S.) It's a form of addiction, and demand destruction isn't a bad thing, it's "healing" or "getting better".It is patently obvious that vast amounts of oil are being wasted, particularly in first world countries. The Hirsch Report itself admits (P. 24) that "67 percent of personal automobile travel, and 50 percent of airplane travel are discretionary". This means that 6.3 million barrels per day (roughly equal to the oil production of Iran+Iraq) are used in discretionary auto/air travel in the US alone. That's huge: 30% of US oil consumption, and 50% of US oil imports. And it's being wasted on non-mission-critical, optional travel. Or consider commuting. The average commute in the US is 16 miles Source. Which means that, in a pinch, half the population could easily commute to work by bicycle. Those with longer commutes can conserve, while still maintaining functionality as usual, by car pooling, or driving a hyper-efficient vehicle, like the Veken hybrid scooter, which is available today for less than $3000, and gets 180mpg (you can see a video here. More info here). On top of that, you can count numerous other demand-side measures, like telecommuting, telepresence, or even gasoline rationing with tradeable credits. You could very easily draft a plan to eliminate half of US oil consumption (10mbd, or 1 Saudi Arabia) simply by trimming waste and lifestyle.
To answer your question: The large new supply of secure crude is going to come from conservation, i.e. U.S. commuters riding two-to-a-car instead of one-to-a-car etc.
Of course my point here is true, and it carries a lot of force. In fact, I've never met a doomer who didn't immediately acknowledge the validity of this point. There is no genuine "need" for people to commute to computerized desk jobs 100 miles away in 6000 lb. single-occupant SUVs. You don't even have to think about it; it's patently ridiculous. We waste staggering volumes of oil on frivolous lifestyle bullshit.
So the optimist solution is to gradually (or quickly, if need be) eliminate all this waste, and switch over the remaining essential part to alternate power sources. For example, the classic case would be a commuter who switches from a single-occupant 12mpg SUV to a 180mpg hybrid scooter, and then to an ∞ mpg electric scooter driven by solar or nuclear. Radically reduce oil use to the minimum necessary, and then substitute. That's the optimist solution in a nutshell.
Of course, the doomers are fully committed to horror and mayhem, and have a pre-packaged rebuttal to this solution too. They say that conservation and efficiency are poison to our economy because the economy is based on waste, and eliminating waste will send the economy into a death spiral. It sounds plausible the first time you hear it, but if you think about it carefully, you'll see the fallacy.
Consider the classic example: Jane was driving an SUV that got 12mpg. Then she purchased a hybrid scooter for $3000, which gets 180mpg. Assuming $5/gallon gas (due to post-peak conditions), car travel costs $.42/mile and scooter travel costs $0.03/mile. So when she rides her scooter, she's saving about $0.39/mile. At the scooter's top speed of 40mph, she's saving $15.60/hour. She's making as much money driving her scooter as she would working a well-paying second job. She'll pay off the moped in a few months, and after that it's all gravy. Lots of extra money in her pocket is hardly a negative for the economy. That money will get spent somewhere, and the people providing those goods and services will benefit.
This is the key point: Whenever you conserve oil, you also save money, and that money gets spent or invested, stimulating the economy. Unlike money spent on oil, which generally flows out of the country, money saved by conserving oil is far more likely to be spent in a way which stimulates the domestic economy and employment.
A recent study of efficiency efforts in California bears this out:
• Energy efficiency measures have enabled California households to redirect their expenditure toward other goods and services, creating about 1.5 million FTE (Full Time Equivalent) jobs with a total payroll of over $45 billion, driven by well-documented household energy savings of $56 billion from 1972-2006.So there you have it. Conservation is the easiest and best solution to peak oil, and it's highly beneficial to the economy. Careful examination shows the pessimist argument to be based on a series of fallacies.
• As a result of energy efficiency, California reduced its energy import dependence and directed a greater percentage of its consumption to in-state, employment-intensive goods and services, whose supply chains also largely reside within the state, creating a “multiplier” effect of job generation.
• The same efficiency measures resulted in slower growth in energy supply chains, including oil, gas, and electric power. For every new job foregone in these sectors, however, more than 50 new jobs have been created across the state’s diverse economy.
• Sectoral examination of these results indicates that job creation is in less energy intensive services and other categories, further compounding California’s aggregate efficiency improvements and facilitating the economy’s transition to a low carbon future.
by JD
posted by JD @ 11:28 PM
118 comments
118 Comments:
As always, please use the Name/URL option (you don't have to register, just enter a screen-name) or sign your anonymous post at the bottom. The conversation is better without multiple anons.
Thank you!
JD
"Whenever you conserve oil, you also save money"
Does this hold for all cases? It would seem there are diminishing returns and at some point conserving oil costs money/time.
If conservation has been so good for California's economy why is California facing a 45 Billion dollar tax revenue shortfall?
why is California facing a 45 Billion dollar tax revenue shortfall?
Because we're in the middle of a global economic crisis.
Conservation has been good for California's economy. See the referenced study for details.
Does this hold for all cases? It would seem there are diminishing returns and at some point conserving oil costs money/time.
That's an interesting point. Do you have a specific exception in mind?
Speaking personally, I've completely eliminated my consumption of gasoline and diesel, and there was no point where I ran into diminishing returns.
Excellent blog.
I'm 28 years old, and have NEVER owned a car in my entire life. I've lived in rural Wisconsin, the suburbs of Chicago, rural Japan, Osaka, and New York city. Although it's much easier to be without a vehicle in New York, it's still possible to survive with out one even in the burbs and rural America. (I miss my small town's main street!) Since the US has kept gas taxes practically non-existent over the last 50 years, it's going to take high prices to drive the shift to higher efficiency. This is good.
That being said, I really miss the train system in Japan. My Japanese friend was horrified when he learned that the New York subway never runs on schedule...... :P
I fully agree that the average American has a sizable "waste" amount of oil use. When I first started investigating these issues last year, I noticed that just by driving more efficiently one could save several hundred dollars per year. This was at the same time the gov't was giving everyone a check for a few hundred dollars to save the economy.
While there are some easy and seemingly obvious switches that people can make, I guess my question is: How far can these go?
An example: One of the best ways to conserve gas is to slow down, as drag forces increase with velocity squared. There might be large returns in slowing down from 80mph to 75mph, but the benefits from continuing to slow decrease until the time you are using begins to consume the savings. This all depends on the price of fuel and your time, of course.
Another problem I see, the utility of the SUV and scooter are not equal. I drive a mid-size sedan, and while certainly could drive a smaller car, I can't switch to a scooter. A vehicle that would provide a similar amount of utility - e.g. same # of passengers - yet has enough fuel efficiency to make financial sense, simply does not currently exist. I have looked.
I realize that there sizable number of people who can make better choices that save fuel *and* save money. I would hope these people will quickly do this as financial conditions worsen.
But, JD, what if I don't want to ride a hybrid scooter to work? What if I'm unable to ride a scooter because I'm old, handicapped, live in a densely populated area where it's too cold, or the roads are clogged with automobile traffic and thus too dangerous?
Or what if I'm a modern 'conservative' who subscribes to Dick Cheney's famous dictum "the American way of life if non-negotiable?" What if I just don't want to conserve in the way you want me too? Who are you to tell me that I must give up my right to burn gasoline as I see fit?
I'll grant you that conservation is indeed a virtuous pursuit, despite what Cheney and his fellow "conservatives" say about it.
I wish you had mentioned mass transit, particularly rail systems. Everyone can use mass transit, regardless of the weather or their physical condition.
I don't think the defense of the "American" way of life is only under the of purview of conservatives:
"We will not apologize for our way of life nor will we waver in its defense. - Barack Obama"
Also, I believe the goal was to save gas and money. Mass transit will currently cost me more in both time and money.
Yes. Cheif, but what about those who can't or wonlt ride hybrid scooters?
What about those who simply refuse to conserve because they do not have to or want to?
And why should we conserve if we have this enormous glut of oil an natural gas? Isn't that tantamout to admitting the doomers were right all along?
Anon: I don't know...should we force them?
I think the answer is JD's original point, the economics of the situation will take care of a large portion of it. Perhaps an increase in the gas tax is a solution. I am unsure of the political viability of this suggestion, and am uneasy about the ability of the gov't to use the funds wisely, but I could probably get on board with it.
I'm not sure if the stimulus will help that much in the current economic environment. Economies go through cycles and recession is part of the cycle. I read a good article on the history of cycles at, I think,
http://www.recessioninfocenter.com
Yes. Cheif, but what about those who can't or wonlt ride hybrid scooters?
What about those who simply refuse to conserve because they do not have to or want to?
This is a strange question, because it assumes that certain segments of society will be able to "avoid" paying the assumed high price of oil-based fuels.
The point of the article was to look at what happens in a "post-peak" environment. JD is figuring that the prices will be high, and people will be paying considerably more for energy, so: either you substitute, or you pay more. JD is arguing that substitution will occur.
Personally, I think we're just as likely to see people move toward transit in the medium term. I also think we're going to see a move away from the "work 20 miles from where you live" model. Or at least we'll see more telecommuting.
Fortunately for the world in this siutation the USA and most of the developed world is effectively bankrupted because of the last 20 years of greed and focus on growth growth and more growth. We are now forced into a situation where that will not happen as easily, so we are already saving oil. If things pick up at all, then the price will increase quite quickly. This will put further burden on people already unemployed etc. being able to afford oil and any of these gas sucking machines. We are now going to be conserving forced upon us, whether it is liked or not.
"The point of the article was to look at what happens in a "post-peak" environment."
Post peak? JD's last post was about the enormous glut of oil and natural gas we have now. Why worry about getting arthritic grandma in Toledo to ride a hybrid scooter to work when her Lumina runs just fine and gas is $1.60?
Unless of course you've had a change of heart and you think we're in for another big growth spurt/terrorist attack and $5 gas is imminent.
For the record, do you "debunkers" agree on the proximity of peak, past or future?
Post peak? JD's last post was about the enormous glut of oil and natural gas we have now. Why worry about getting arthritic grandma in Toledo to ride a hybrid scooter to work when her Lumina runs just fine and gas is $1.60?
Long-run.
Unless of course you've had a change of heart and you think we're in for another big growth spurt/terrorist attack and $5 gas is imminent.
I don't think either is terribly likely, but who cares? It's not "all now or nothing." One can remain concerned about the long-run challenges even as the short-run challenges are different.
For the record, do you "debunkers" agree on the proximity of peak, past or future?
Do you... non-debunker-something-or-other-choose-a-silly-appellations agree on everything? Including what toppings you want on your pizza?
Didn't think so.
RIGHT BACK AT YA CHIEF!
I think JD sees a closer peak in production than most of us. I tend to agree with Mills, and think it's at least a few decades off, assuming demand remains there. Others have different opinions. So what?
JD, I'm in complete agreement with you about the impact conservation can make on the entire energy economy. My problem is that I don't know how that conservation is to take place in a timely manner.
If we're talking about an environment in which conservation happens as a response to price signals brought about by post-peak conditions, can that response be broad and fast enough to keep us from feeling some of the more-unpleasant effects of reaching peak? Wouldn't the entire power, manufacturing, transportation, and agricultural sectors have to retool and retrofit to increase efficiency? Where would the capital to do so come from as these sectors are forced to spend increasing amounts of it on procuring energy? Ditto for an automotive industry that at present can't be bothered with relatively painless CAFE standards?
My concern isn't that there's no way to deal with peak oil, and I don't believe in a "doomer" philosophy of inevitable chaos and death. I'm just worried that we won't unleash our huge potential for adjustment and adaptation until we've backed ourselves too far into a demand-corner, so to speak.
If we can deal with peak oil reactively and get away with it, then I certainly think we're capable of doing so. But if proactivity is required, are we as a culture/society capable of making that kind of change? Does the political will exist in our representatives? Does the intellectual will exist in our populace to educate itself about the issues involved? Will the media get the necessary information to the public? Will the public be willing to accept life on a scooter after generations of suburbs, McDonald's, and SUVs?
Perhaps I'm asking the wrong questions, and perhaps my concerns are unfounded. But in America, where "more" is considered a birthright, I think a ramping-up of conservation is an exceedingly complex issue.
Bradley
"The point of the article was to look at what happens in a "post-peak" environment."
Now, now, Ari, no need to get your panties in a wad. You must admit, JD's change of outlook from short-term glut to long-term hybrid scooters is a bit of a stretch.
I think Bradley makes a good point about Americans, with their non-negotiable sense of entitlement, resisting the idea of riding a hybrid scooter to work.
And no, I have no idea when peak might be. My WAG is that we're past it already. The reason I asked it because if we're really decades away from peak, and swimming in oil gluts, why JD finds it necessary to speculate on hybrid scooters, what with their batteries full of toxic heavy metals and all.
If JD had suggested mass transit, rail, I could have been a little more supportive, as I do believe that conservation will be a big part of our future. I can't help but wonder if JD left out rail as a conservation alternative because his nemesis JH Kunstler has already staked out that territory?
b. stone: Wouldn't the entire power, manufacturing, transportation, and agricultural sectors have to retool and retrofit to increase efficiency?
No. The economy as a whole will assert an ordering to the job. The easy stuff first, the harder stuff later. Things like agriculture, manufacturing, power are such a trivial part of oil, they can probably be left for last, if they even need special attention in the first place (ie, initial solutions first deployed will be used there as well). Far bigger bangs for the buck will come from the ~40% load due to passenger vehicles.
fifi: The reason I asked it because if we're really decades away from peak, and swimming in oil gluts, why JD finds it necessary to speculate on hybrid scooters, what with their batteries full of toxic heavy metals and all.
JD's argument is essentially that when the peak occurs, because we have numerous options available to mitigate it, more than likely we probably won't even notice it.
Do recall that it's the nutbars like you, Kunstler, Ruppert and the rest who insist the peak is upon us today, and that society is going to be flushed down the toilet because of it.
Recall that a significant portion of transportation is DISCRETIONARY. This means that 30%+ of consumption DOESN'T NEED TO HAPPEN.
That 1/3rd of optional/discretionary consumption (approximation for my argument), applied to the growth curve will buy around 50% growth in demand at the SAME PRICE.
Online shopping is a form of substitution, as is car pool as is a smaller car, as is working from home 1/5 day (20% demand destruction right there!), as is a 4 day work week (4x10 verus 5x8).
Look at how easy it is! Use your imagination. Geeez.
Now, now, Ari, no need to get your panties in a wad. You must admit, JD's change of outlook from short-term glut to long-term hybrid scooters is a bit of a stretch.
I think Bradley makes a good point about Americans, with their non-negotiable sense of entitlement, resisting the idea of riding a hybrid scooter to work.
And no, I have no idea when peak might be. My WAG is that we're past it already. The reason I asked it because if we're really decades away from peak, and swimming in oil gluts, why JD finds it necessary to speculate on hybrid scooters, what with their batteries full of toxic heavy metals and all.
If JD had suggested mass transit, rail, I could have been a little more supportive, as I do believe that conservation will be a big part of our future. I can't help but wonder if JD left out rail as a conservation alternative because his nemesis JH Kunstler has already staked out that territory?
Oy vey.
How is it a "stretch?" He's just talking about what he's always talked about: peak oil as an overall phenomenon and the responses to it. JD is a big fan of technology, and likes to explore its applications to a "post-peak society." No shock there.
And WHAT "toxic heavy metals?" Name a "toxic heavy metal" in either a nickel-metal hydride battery or a lithium-ion battery?
OH RIGHT. YOU CANNOT. Honestly, you (or one of the other anons, whoever you are) have the audacity to accuse me of being a liar, yet you cannot even keep your facts straight? Bugger off if you can't even be bothered to verify your facts.
Because JD doesn't mention mass transit in this particular post, you won't be "supportive?" JD has plenty of posts that are about rail, buses, and the virtues of transit.
How are those windmills today? Particularly fierce?
Bradley,
Your comments are in bold for clarity's sake. Tell me if that works for you, or if you'd prefer italics.
If we're talking about an environment in which conservation happens as a response to price signals brought about by post-peak conditions, can that response be broad and fast enough to keep us from feeling some of the more-unpleasant effects of reaching peak? Wouldn't the entire power, manufacturing, transportation, and agricultural sectors have to retool and retrofit to increase efficiency? Where would the capital to do so come from as these sectors are forced to spend increasing amounts of it on procuring energy? Ditto for an automotive industry that at present can't be bothered with relatively painless CAFE standards?
Yes, but there are varying degrees of elasticity of demand. For example, my demand for gas is probably more elastic than a fire department's (for obvious reasons.)
The power sector is affected by a change in oil prices, but let's be honest here: the bread and butter fuels for electricity in the US are coal, NG, and uranium. Oil is used for certain activities, but is not used for generation.
There is incredible opportunity for moving transit to electricity or natural gas, as well. Hybrid buses were put on the road in the past decade, and won't be replaced with less efficient vehicles any time soon. Natural gas transit is picking up a lot of steam. As Robin Mills points out in Myth of the Oil Crisis, it's institutional users like transit authorities that are the best poised to adopt "new technologies" like hydrogen cells and natural gas fuels anyway.
My concern isn't that there's no way to deal with peak oil, and I don't believe in a "doomer" philosophy of inevitable chaos and death. I'm just worried that we won't unleash our huge potential for adjustment and adaptation until we've backed ourselves too far into a demand-corner, so to speak.
There is also the opposite problem: adopting a "solution" before the problem even exists. Mills likens it to giving a child adult clothing because he'll outgrow his current wardrobe. Putting things like better transit on the road is not a problem, but do we have an accord that mandates the use of x technology (or else?)
Whether people like it or not, we saw markets reacting VERY quickly during the run-up in oil prices last year. There is the potential for hiccups, but having Carter-esque rationing could be worse than the alternative of "mitigating early."
Not that I think that Carter made the wrong move, by the way, so I hope that the anons don't start accusing me of being anti-Carter or some such rubbish.
If we can deal with peak oil reactively and get away with it, then I certainly think we're capable of doing so. But if proactivity is required, are we as a culture/society capable of making that kind of change? Does the political will exist in our representatives? Does the intellectual will exist in our populace to educate itself about the issues involved? Will the media get the necessary information to the public? Will the public be willing to accept life on a scooter after generations of suburbs, McDonald's, and SUVs?
Well, let's look at how the public reacted to $4+/gallon gas: they stopped buying SUVs! SUVs/light trucks were the first to get nixed in 2008. This data comes courtesy of Econbrowser and Prof. James Hamilton (nice guy, by the way!)
People aren't nearly as stupid as the "doomers" make them out to be. Sure, they aren't prescient (in a sci-fi way), but they generally muddle their way through things. I also don't share your fear of poor legislators. History has taught us that the US, despite its sometimes rotten legislature, is certainly capable of sweeping change in short periods.
Kind of like some story on NPR I heard about how the Euros reacted to Obama's being elected. One guy in France said, "Sure, we talk about how progressive we are here, but it's always the Americans you have to worry about surprising you!" I like to think that that's a fairly accurate portrayal of us. We're stodgy, but when we change, we do it fast and we do it well.
Perhaps I'm asking the wrong questions, and perhaps my concerns are unfounded. But in America, where "more" is considered a birthright, I think a ramping-up of conservation is an exceedingly complex issue.
I think your questions are more than reasonable, but I disagree with your premises. I believe that you see Americans as more, I dunno, rotten (?) than people elsewhere. People in all of the OECD are spoiled rotten. Hell, the town I lived in in rural Japan was considered "poor" because some people still had septic tanks! I mean, I had people APOLOGIZE to me for this injustice!
Personally, I think everyone thinks the grass is greener elsewhere, but then they go abroad and realize that everyone wants the same damn thing: a good meal, a good abode, and a 70" 1080p HDTV and 7.1 Dolby surround with a PS3 and Iron Man on Blu-Ray.
Maybe the last one is just me. I can't say for certain. ;-)
Ari, bad example.
"Yes, but there are varying degrees of elasticity of demand. For example, my demand for gas is probably more elastic than a fire department's (for obvious reasons.)"
My wife is a firefighter, and they make all kinds of trips that are not necessary. There demand is very eslastic. During tough times, police in our province were told to sit by the road rather than drive around to conserve fuel.
You survive by substituting and curtailing expenditures when one of the dual incomes of a family lose their job, why should your energy consumption not follow this same trend. Live rich when oil (ENERGY really) is cheap and plentiful, and learn to do without (ENERGY) when it's expensive.
Anon,
I dunno that it's terrible. I mean, we're talking about a spectrum here. I can do without a car altogether, which means that my demand for gasoline goes to zero. On the other hand, a fire department is going to need to use SOME diesel no matter how much they try to conserve.
I don't mean to say that they can't be more efficient. That's not what elasticity is about, per se, but that they have some point where their demand becomes absolutely inelastic. My demand is elastic at any price, simply because of my needs as a consumer.
"why is California facing a 45 Billion dollar tax revenue shortfall"?
because the politicians, in their efforts to obtain their massive political support, have paid off government union employees in unrealistic wage and benefits increases.
backscratching to the tune of about 80% of the 45 billion.
anon- Bob Dobb
"JD's argument is essentially that when the peak occurs, because we have numerous options available to mitigate it, more than likely we probably won't even notice it."
I think we established some time ago that peak will be noticed only in hindsight, so I'm not sure that remark deserves further comment. I do think the effects of post-peak will be noticeable, for all the reasons I've tried to explicate in the last three topics here.
That said, since JD has moved his focus from the glut of oil and natural gas we're experiencing now to some POST-peak scenario where gas is $5, let's look at how to deal with all that discretionary oil use.
Please recall (don't you love that expression?) that I said that conservation should be a big part of our energy strategy, regardless of what the (insert prefix here) ________ conservatives say about the virtues of conserving energy. The problem with discretionary energy use is determining whose discretionary oil use will be curtailed. Americans have God-given rights (or so they believe) to spend their money however they see fit. So if they want to use their $5 gas to drive to McDonalds, or fight wars on multiple fronts, who's to say they can't? Who shall be the new "deciders" of what's essential and what's discretionary? We've just witnessed how the well government and the "free market" handled the banking and finance industries. Should we allow them to decide what's discretionary and what's essential?
And while hybrid scooters may well be the perfect solution for some, it obviously isn't perfect for all.
And for Ari the Petulant, let me say that it's not just the materials inside those nickel-based batteries that pose toxic risks, it's the mining and smelting processes that produce the greater share of toxins. But despite all that, I'm perfectly willing to accept hybrid scooters, batteries and all, in the arsenal of tools to deal with whatever scenarios post-peak has in store for us.
Yikes:
First, I'll grant you that conservation is indeed a virtuous pursuit, despite what Cheney and his fellow "conservatives" say about it.
Cheney actually said that conservation is a virtue, just not a basis for a national energy policy. He's a prick, but let's not put words in his mouth.
Second, The problem with discretionary energy use is determining whose discretionary oil use will be curtailed. Americans have God-given rights (or so they believe) to spend their money however they see fit. .... Should we allow them to decide what's discretionary and what's essential?
Yes! If someone wants to spend their 10$/hr wage driving to McDonald's in an H2 at 15$/gal, they can. If they decide to substitute away from that choice, great, and it gas needs to go to 20$/gal before they do, fine. At either price, I'll spend my income taking a scooter to the strip club. My choice!
And for Ari the Petulant, let me say that it's not just the materials inside those nickel-based batteries that pose toxic risks, it's the mining and smelting processes that produce the greater share of toxins. But despite all that, I'm perfectly willing to accept hybrid scooters, batteries and all, in the arsenal of tools to deal with
No no. You just changed your argument. You went from saying:
"what with their batteries full of toxic heavy metals and all."
to:
"let me say that it's not just the materials inside those nickel-based batteries that pose toxic risks, it's the mining and smelting processes that produce the greater share of toxins."
Different premises, different arguments. Yes, mining is bad. That's pretty well-known and documented. But the batteries themselves are not "full of toxic heavy metals."
And petulant? Hah. I think most people get a bit upset when their integrity and honesty are questioned so capriciously.
The problem with discretionary energy use is determining whose discretionary oil use will be curtailed. Americans have God-given rights (or so they believe) to spend their money however they see fit.
So... are you saying that we shouldn't be allowed to have the right to make decisions about purchases? I think if you were to go to any other free, market-driven economy and ask people if they should have the right to make their own decisions regarding their purchases, they would say the same. It's not unusual that Americans think that they should be given the choice to spend their money as they see fit. Let's face it: VMT would probably go up in the rest of the OECD if gas taxes weren't high. $3/liter is a great way to keep people off the road.
Who shall be the new "deciders" of what's essential and what's discretionary? We've just witnessed how the well government and the "free market" handled the banking and finance industries. Should we allow them to decide what's discretionary and what's essential?
You're not differentiating between the consumer, the producer, and the regulator. The question ought to be "who should be the least regulated?" What we tend to find throughout history is that regulating consumer behavior directly is a less effective means of producing a socially optimal outcome. Careful regulation of producer behavior, however, can work just fine. For example, Glass-Steagall.
There's nothing wrong with regulating economic behavior per se, but it's rarely a good idea to remove free will itself. The best solution is usually the price signal. Direct limitation of supply or demand usually amounts to backdoor solutions (black markets, etc.) I would have actually favored a price floor on oil in the US via a tax. While there is an associated deadweight loss, it also could have been funneled into non-oil energy, mitigating that deadweight loss in the long run.
Excellent post, but maybe a little off-target. The price mechanism will both stimulate new supplies and conservation.
I am sure somewhere there is a sophisticated model, but my back of the envelope guess is that at any price of more than $70 to $90 a barrel, world crude oil demand flatlines. It take a few years, but it happens. At more than $100 a barrel, it happens pretty rapidly, and starts to go into reverse. The longer oil stays above those price points, the more embedded in the economy become conservation and substitution efforts.
We have seen crude oil demand declines for decades in Europe and Japan, due to government policies. Japan in 2009 will probably use less oil than at any time since the 1960s, and they have yet to adopt PHEVs (though I think they will).
Is conservation worth it? Let the price mechanism tell you.
As a nation (USA), we should conserve, as all that money we export to oil thug states could instead be spent here. Wh should tax gasoline heavily, and keep the money home. USA Firster I am!
BTW, people are raving about the Ford Fusion. It can get more than 50 mpg if you try at all.
In the brief window of higher oil prices (2004-2008) Ford came out with an OPEC killer. GM came up with the Volt.
US fleet average could migrate to 50 mpg in next 20 years. In short, our oil demand would fall every year, for decades in a row, while our living standards rose.
What if China and India mandate PHEVs? Sort of kills the "China will use all the oil and we are doomed" argument. A simple change in a run-by-fiat state, and the global oil picture is radically altered.
Doomsters are suffering from a mental illness, not a rational concern about the future.
Anyway, we will see $10 oil soon. Japan's GDP shrank by double digits in fourth q. of 2009. This is scary.
Oceans of oil everywhere all the time by 2010. You won't be able to give the stuff away.
A far cry from Peak Oil. A runaway, honking glut to the moon of oil. We will drowning in the stuff.
"And petulant? Hah. I think most people get a bit upset when their integrity and honesty are questioned so capriciously."
You wrecked your own integrity and honesty with your participation in the "EROEI of Gardening" and "Growth/Jobs" posts. You and JD both shot yourselves in the foot big-time with those howlers.
And the way you've framed this discretionary oil use debate makes it appear as if it's a no-brainer; 30 some-odd% of oil use is discretionary, ergo peak oil/post-peak oil is as simple as duh! stop driving to the mall.
One commenter suggested we force people to conserve, you apparently think the "free-market" will handle it. And my suggestion, my guess is that the "free-market," absent some kind of yet-to-be-identified regulatory intelligence, will handle post-peak oil issues in the same graceful way it handled our latest economic meltdown, which is to say very poorly or not at all.
I pose this question because I want to know, and because I believe that merely observing that we're wasting oil does not guarantee that the "waste" can be quickly and accurately identified with some kind of consensus, and eliminated without making a lot of tough, controversial decisions. And a population that's being told we're awash in a glut of oil is probably not going to take to the idea that their discretionary trip to the NASCAR track is wasteful, if you get my drift.
Again, I don't have all the answers, but it's not as simple as declaring that eliminating waste is some kind of self-evident panacea.
"Oceans of oil everywhere all the time by 2010. You won't be able to give the stuff away.
A far cry from Peak Oil. A runaway, honking glut to the moon of oil. We will drowning in the stuff."
Exactly. Where's the impetus to conserve when the genius debunkers are telling us we're drowning in the stuff? Why, it would seem almost noble to go out and burn as much of the stuff as one could!
Anon:
The glut is the result of conservation, and new supplies, brought about by the window of higher oil prices, 2004-2008, and a recession.
My guess is that this gut will take 10 years to clear off, getting us into position for the next round of spikes.
Conservation efforts make sense now, as they will extend the glut for years and years. If the USA added a $4 tax on gasoline ($1 a a year for four years), this glut might last for 20 years, just like the glut that followed the 1979 price spike.
Thee are other positives that might happen. Iran, Iraq, Nigeria, Mexico, Venezuela might reform their governments, and begin producing oil seriously again, ala Libya. Hey, if it happened in Libya, if culd happen anywhere.
The pressure is on. Thug states can only make more money now by pumping more oil. Which will lengthen the glut. But the previous option, of letting fields decline and getting richer anyway, is over (due to the glut).
Maybe some day there will be Peak Oil. But do you really want to spent a couple decades of your life warning, and warning, warning, and warning of doom, that never comes? The TOD crowd is already looking like a pathetic rump group of sorts, as founders leave or die, or move on to financial doomer circles. They are wasting their live away--unless they are getting paid.
What technological advances will be made in those 20 years? Already, there is talk of a PHEV with an 80 mile range on the charge.
Oil is going the way of the mimeograph.
You wrecked your own integrity and honesty with your participation in the "EROEI of Gardening" and "Growth/Jobs" posts. You and JD both shot yourselves in the foot big-time with those howlers.
Riiiight. Either put up examples of where I lied or you're pulling the same tricks that you did a few posts back: putting words in people's mouths then not having the, oh I dunno, integrity to issue a mea culpa.
At least I have the strength of character to use a name and have issued retractions when I have been shown to err. Integrity isn't always getting it right. It's being honest about your mistakes. You, sir, avoid your errors with the expert weaving of a politician. I think you know what tone I take when I say that, as well.
And the way you've framed this discretionary oil use debate makes it appear as if it's a no-brainer; 30 some-odd% of oil use is discretionary, ergo peak oil/post-peak oil is as simple as duh! stop driving to the mall.
No, I have "framed this" as being an issue of elasticity of demand. But if you want to put words in my mouth, hey, knock yourself out.
One commenter suggested we force people to conserve, you apparently think the "free-market" will handle it. And my suggestion, my guess is that the "free-market," absent some kind of yet-to-be-identified regulatory intelligence, will handle post-peak oil issues in the same graceful way it handled our latest economic meltdown, which is to say very poorly or not at all.
OK, you're so full of shit it's not even funny anymore. I FLAT OUT CALLED FOR REGULATION.
I quote myself:
" Careful regulation of producer behavior, however, can work just fine. For example, Glass-Steagall...
I would have actually favored a price floor on oil in the US via a tax. While there is an associated deadweight loss, it also could have been funneled into non-oil energy, mitigating that deadweight loss in the long run."
I have also in the past said that I favor increased regulation of banking, especially CDOs and special purpose vehicles (accounting-side issues).
You have tried your damnedest to make me into a Friedman-esque free market nut. I AM NOT. You want to talk about honesty and integrity? Try being honest when you're referencing what I've said.
I pose this question because I want to know, and because I believe that merely observing that we're wasting oil does not guarantee that the "waste" can be quickly and accurately identified with some kind of consensus, and eliminated without making a lot of tough, controversial decisions. And a population that's being told we're awash in a glut of oil is probably not going to take to the idea that their discretionary trip to the NASCAR track is wasteful, if you get my drift.
Finally, an honest question from you.
You're right. It's not always easy. However, a lot of times it's actually easier than people make it out to be. Look at RMI and its collaboration with Wal*Mart to see an example of supply chains being made more efficient to the tune of SAVING money (estimated $500 million.)
JD's point, if you read his posts going back to the beginning, is that efficiency a la RMI/Lovins is an oft ignored solution to supply-side issues. The problem that he's addressed is that many in the "armchair oil community" read the Hirsch report and say, "OMG without electric cars now we can't do anything!" However, we can promote efficiency even in the midst of a glut and demonstrate, using discounting, that it makes sense to be efficient even when the variable costs (gas) are low.
In other words: yes, the fixed cost of upgrading Wal*Mart's fleet of trucks from 6 MPG to 15 MPG is high, but the long run return on investment is much, much higher, even when oil prices are low. Promotion of this kind of thinking, which JD has done for a long time now, is a good thing.
It's BAUBNR (Business as usual but not really).
Again, I don't have all the answers, but it's not as simple as declaring that eliminating waste is some kind of self-evident panacea.
It's not, but it's also economically intelligent and a good first step in the whole "oil endgame." The people saying we're all soooooo effed aren't doing half as much for the health of the economy as guys like Lovins, who show the big bad corporations how they can be smarter, leaner, and better at what they do by using less per dollar earned.
Call me crazy, but I'll throw myself into Lovins' ring over the pessimists any day. Lovins knows how to get the big bad corporations to make chances. That's smart economics, and smart "greening."
Exactly. Where's the impetus to conserve when the genius debunkers are telling us we're drowning in the stuff? Why, it would seem almost noble to go out and burn as much of the stuff as one could!
This is flat out bullshit.
It makes ZERO sense to waste if you're worried about the bottom line. NONE. All it means is more money available to make your supply chain more efficient, if you ask me.
Again: those windmills must be really something, seeing how you're tilting at them. HARD.
"It makes ZERO sense to waste if you're worried about the bottom line. NONE. All it means is more money available to make your supply chain more efficient, if you ask me."
The waste I was talking about was the personal, individual waste that JD went on about at some length. Discretionary travel. Individuals, at least the ones I know, don't talk or think about their daily activities in terms like supply chain, bottom line, efficiency. They might say they had a hard time at the office, or their wife wants a divorce, and they decided to take in happy hour across town to get 2-for-drinks and free noshes, but they don't kvetch about their supply chain. And I would venture to guess that if I started some self-righteous harangue about their wasteful, discretionary use of oil in the midst of this glut, that they might just tell me where to stick it.
And that's the major problem with eliminating personal, discretionary waste - one man's waste is another's hard-earned happy hour.
"And that's the major problem with eliminating personal, discretionary waste - one man's waste is another's hard-earned happy hour."
Right. And this is exactly kind of "waste" that the price signal will wring out of the system. Prices may not be perfect in all respects, but this is not the type of cutback that is going to trigger chaos in the streets.
"And WHAT "toxic heavy metals?" Name a "toxic heavy metal" in either a nickel-metal hydride battery or a lithium-ion battery? "
Ahh, lithium and nickel are both toxic. Look up their MSDS sheets.
That said, most things can be toxic if you are willing to overdo it. And in small enough doses, your body can excrete or neutralize most poisons, even mercury or plutonium. There's a whole industry devoted to pumping botulin toxin into overly vain women.
Mike,
I'm going to be a bit pedantic here and argue with you. Bear with me.
Although the term "toxic heavy metal" is pretty much meaningless to begin with, it's hard to argue that lithium, with an atomic weight of 3, is a "heavy metal." Its toxicity, compared to any other kind of battery, is incredibly low. Hell, people take lithium as a medicine. Dosage matters considerably.
I'll gladly concede that I wouldn't want to come into contact with NiMH directly, but compared to NiCd, NiMH is a damned good thing.
I daresay, however, that LiIon and NiMH batteries' toxicity is probably lower than some things people keep under their cabinets.
In any case, my point was that the batteries powering PHEVs and EVs are not usually the ones that have mercury, cadmium, and all that other junk in them. LiIon, especially, is pretty benign.
I agree with the point that everything, in certain doses, is toxic. Hell, eat enough Brazil nuts and you can get selenium poisoning (yes, it's true even though it was on House!)
Excellent post JD.
This captures exactly the position of the optimists.
I'll go further: ad additional difference is that the optimists are generally doing something to reduce their consumption, while the pessimists think we're all fucked so they instead waste their time figuring bullshit models with fallacious assumptions to figure out exactly how fucked we are to ten decimal places.
Me? I'm having a ball.
I can't wait to order pizza from dominoes delivered by electric scooter while the doomers scratch about in their pumpkin gardens and get all constipated from eating too many MREs.
DB
A fire truck is an excellent example of something that could be substituted easily.
A 13.5 ton smith electric vehicle with a 150 mile range and a big windmill would make an excellent sustainable system.
I'm personally more worried about war and inflation than I am about peak oil.
DB
I fully agree with this post, JD. I'm sure history is rich with examples of alternatives to oil that have been abandoned because they weren't economical at the time. That's not to say they were useless ideas - just that when they were conceived, oil cost far less than the cost of developing and producing something that uses an alternative.
I liken rising oil prices to the opposite of storage requirements in computing. Once apon a time, we would force people to delete files, enforce disk quotas, restrict what type of files people could save, compress files etc all to reduce disk usage. Now, we've reached a break point where it's generally cheaper to spend money on storage and fix the problem than it is to implement measures such as these.
When the price of oil goes up, it has the same effect as it would if the cost of storage went up. People reduce their storage needs via one or several of the means listed above, because it's the cost of labour to implement them.
"I can't wait to order pizza from dominoes delivered by electric scooter while the doomers scratch about in their pumpkin gardens..."
Conservation in action, eh? That's getting rid of personal, discretionary waste, now isn't it? Yes, that will really show those doomers!
Just when I thought Andy Ryan was the low-water mark for puerile pablum, someone else comes along and lowers the bar ever further.
Let's see how long it takes for Ari to spin that little gem of wisdom.
I must say, until I really began to read these comments I had no idea how rabid many peak oil fanatics can be.
Conservation in action, eh? That's getting rid of personal, discretionary waste, now isn't it? Yes, that will really show those doomers!
Jeeeesh what a fucking nutcase this is! Why don't you listen to yourself before putting up this intellectual garbage? Lonely much? Bad job? Did your mommy prevented you to eat more cookies?
Get a life man. And while you're at it, stop wasting discretionary carbon energy and don't post any more crap in the internet, will ya?
At least a pizza will feed you.
"Why don't you listen to yourself before putting up this intellectual garbage? ...Did your mommy prevented you to eat more cookies?"
Whoops, sorry DJ and Andy. Looks like we have a new winner, or loser, as the case may be.
Maybe Barbie can provide some charts and graphs comparing discretionary energy use of pizza delivery via hybrid scooter to that of pizza delivery via free-range burro and grain-fed burro, or better yet, to making your own pizza at home with a variety of savory toppings.
"At least a pizza will feed you."
Yes, and if everyone would only get two pizzas per week delivered by hybrid scooter, just think of all the discretionary energy we could save!
Yes, and if everyone would only get two pizzas per week delivered by hybrid scooter, just think of all the discretionary energy we could save!
Believe me, we would save off way more if every moron stopped posting idiotic comments on the internet.
Looks like we have a new winner, or loser, as the case may be.
Haha, you dumbwit. You see this as a game. Or a football fan discussion. My, you still have a lot to learn, don't you?
I'm confused.
What is the point of the argument, because I see none.
Ostensibly, we could argue that perhaps buying a pizza from Dominoes uses "discretionary" amounts of energy... but since nearly all of the energy that goes into baking is going to be grid-based, I'm not sure why it's a problem.
On the other hand, Dominoes sucks (sorry, has to be said!), and the energy that goes into Dominoes might be better spent on one of the local pizza places by me.
So... I'm still not sure where this is supposed to be going.
"Believe me, we would save off way more if every moron stopped posting idiotic comments on the internet."
I'd like to believe you, but it would appear that baking and delivering a pizza by any conceivable means of conveyance would consume far more energy than posting an idiotic comment to the internet. Do you have any statistics to corroborate your claim?
"Haha, you dumbwit. You see this as a game. Or a football fan discussion. My, you still have a lot to learn, don't you?"
Yes! It would appear that the full depth and breadth of your stupidity has yet to be revealed! Please, carry on.
"So... I'm still not sure where this is supposed to be going."
Which uses more discretionary energy: getting a pizza delivered or NOT getting a pizza delivered?
A,
Well, let's assume someone wants to eat a pizza that night. Let's also assume that we live in a world where that's a morally acceptable choice.
If I choose to bake it myself, then I will need to go to the market and buy the ingredients. I usually bicycle to the market unless it's below freezing (literally), so that just uses some ATP.
However, I get it home and now I need to bake it. I have a NG range, and couldn't tell you how much energy it uses. I can assume, however, that Dominoes is probably more efficient on the margin because they make pizzas in bulk. The delivery costs energy, but if it's on an electric scooter, then it's fairly negligible per delivery.
I actually don't know, to be honest, which costs more energy. I mean, it's true that having Dominoes exist costs more energy than if everyone were simply self-sufficient in their pizza making, but that's a moot point for now, as Dominoes is in business.
Do you have any statistics to corroborate your claim?
Yes. It's simple. Stupiddity makes people lose time, patience, and energy over nothing other than convincing an half-wit that he would make better use of his keyboard or mouth if used in combination with his brain.
The EROEI of your idiotic ramblings is even worse than corn ethanol.
At least, as I said, Pizza gets to be eaten. That's energy. And it even employs people.
And it's transported by means of electric power, which, hahum, means that you're not wasting any gasoline whatsoever.
So, if you want maths, just divide the small EROEI of one to the inexistant EROEI of the other. Yeah, it's infinity.
Yes! It would appear that the full depth and breadth of your stupidity has yet to be revealed! Please, carry on.
Bro, the level of your hubris and righteousness on your religious beliefs has reached meltdown levels. Chill.
Jeeeeez what a lack of a sense of humor.
So guy, what happens if the value of my time costs more than it costs to buy the pizza delivered from Dominoes?
Answer: I don't make the pizza.
Here's a clue: cost/benefit calculations won't go away because of peak oil and everything *won't* be measured in terms of EROEI as in "whooooops can't drive to work because the EROEI is too low. I can't take a bicycle either because of all the embedded oil, so I'm screwed because I can't get to work in less than a day by walking and whooops there is no internet because the EROEI of porn is too low."
It's a joke the whole thing. Trade is not going to grind to a halt because of peak oil.
And neither is pizza delivery.
HTH
DB
I'm just wondering if anyone outside JD's little echo chamber here finds the idea of getting your MeatLover's with extra cheese delivered on a hybrid scooter as a conscientious act of conservation.
As opposed to the... other sites that aren't echo chambers? OK, sure, this site tends to attract a certain class of person, and most people here agree on the broader spectrum of issues. That doesn't, however, make it any different from most other blogs or sites-- or do you think it's somehow special in that regard? We get it, you don't like this site. You've made that patently clear. Now, start putting up some arguments or let us "debunker dittohead dumbasses" have at it. If you really want a non-"echo chamber" site, you can start your own site or head over to any of the other dozens of sites. Just don't be surprised when you run into the same problems elsewhere, chief.
Anyway, I don't think that ordering a pizza is an "act of conservation" in the way that rationing is. I don't think anyone argued that, per se (again, those windmills REALLY bother you!) Merely that a lot of BAU is, to so degree, possible along the same lines as now with fairly minor changes (junker car to little electric scooter) with minimal economic pain.
At least that's my take on the whole thing.
By the way, I thought you might enjoy this passage:
" Just then they came in sight of thirty or forty windmills that rise from that plain. And no sooner did Don Quixote see them that he said to his squire, "Fortune is guiding our affairs better than we ourselves could have wished. Do you see over yonder, friend Sancho, thirty or forty hulking giants? I intend to do battle with them and slay them. With their spoils we shall begin to be rich for this is a righteous war and the removal of so foul a brood from off the face of the earth is a service God will bless."
"What giants?" asked Sancho Panza.
"Those you see over there," replied his master, "with their long arms. Some of them have arms well nigh two leagues in length."
"Take care, sir," cried Sancho. "Those over there are not giants but windmills. Those things that seem to be their arms are sails which, when they are whirled around by the wind, turn the millstone.""
anon, your asinine trolling is degrading the quality of the site, and will be deleted.
New rule: sign a name, or your comment gets nuked.
Anon,
It's more than that, and I think the allusion says so. It's that I feel that you're creating enemies where there are none.
You've managed to make me into a Reagan Republican when I've a lifelong Democrat who strongly supported Obama. I think it says something that someone who is accused of being a socialist on most sites gets called a nasty "free market acolyte GOoPer" by you. Perhaps in your quest to call us all names, you've become blinded by your zeal?
Seriously, though, if you dislike what's said on this site so much, then go elsewhere. You'll be happier, and what difference does it make when you and us rarely argue substantive points anyway? Honestly, the Internet is great because it lets us all enjoy sites of our choosing. I'm not chasing you away, but suggesting that perhaps you'd be better off as a gadfly (in the Socratic sense) on a different site.
Oh, come on Ari, stop the nice guy theme. The guy has a need, and POD is his anger management fix. I would say great, if he wasn't such a coward lame-ass that doesn't even sign a nickname!
What I don't get is why the guy was attacking the pizza rather than noting the obvious: pizza delivery is all of the following:
a) more efficient than picking it up yourself even if you don't use electric scooters
b) specialization: dominoes is more efficient at producing pizzas than I am
c) electric scooters use a shitload less oil than a car.
But if your point is you don't like BAU then you missed the point.
BAU will continue in some form long after all is gone because it is basically TRADE.
And I apologize to any of those who think I was a little too sarcastic, I was trying to be humorous (remember that? I noticed JD does it pretty well).
DB
With $700 B, thats alot of money to help us from crisis
I'm new to the site. Great post and comments. I disagree that conservation will stimulate the economy in the short term. I agree that conservation is the main way our world will buy time to develop and perfect new energy sources and storage methods.
I believe conservation will not happen until oil prices are back to $150/barrel level. $5/gallon seems to be the current pain threshold the drives change in habits.
The next time oil gets to 150 5x as much money will be flowing out of US (to the middle east) and hence the US people will have less money to spend on US products/services. Yes this will cause change which is good and doable, etc, but the high prices and economic pain must come first.
Only after the US people change their habits and new local energy sources (which prevent this massive transfer of wealth to the ME)are built will long term economic recovery take hold.
I disagree that conservation will stimulate the economy in the short term.
If you mean short term as in the next 6 months, no, I don't think conservation will stimulate the economy. In that scenario, you are just talking about people driving less, spending less, buying less, etc, just to get through a tough spot.
If you are talking about short term as in the next few years, then I think any type of conservation will help tremendously. I take my personal experience as an example. In the last 6 months I have made some significant changes.
I now work 2.7 miles from my home as opposed to 19 last year. I bought a car that gets twice the mileage I used to get (that purchase stimulated the economy). I bought a bigger house (that stimulated the economy) and it's more energy efficient than my old house even though it's almost 3X as big. I also just added 4 more inches of insulation to the attic (because it needed at least that much to have the recommended depth for my area). That insulation purchase stimulated the economy. Together, those changes, over the next few years, will save me, literally, thousands of dollars that I otherwise would have wasted on oil or other energy. If you know my wife, you know that the money saved from the above changes will be well spent in stimulating the economy. Ha!!
Seriously though, I'm not the only guy who is doing things like this. The latest run-up in oil prices, although those price signals are now basically gone, has created a mentality among consumers that won't go away quickly.
DoctorJJ
Hey guys, I started a blog at thewhaleoildrum.blogspot.com if you guys are interested. I'm going to try to post a "blubberbeat" of news when i have time. Come on over and comment. Cheers.
theantidoomer
JD
To answer the question:
"why is California facing a 45 Billion dollar tax revenue shortfall?"
You said:
"Because we're in the middle of a global economic crisis."
What linkage do you see between the precipitous climb in oil prices and the global economic crisis PRIOR to the financial crisis?
podnaught
What linkage do you see between the precipitous climb in oil prices and the global economic crisis PRIOR to the financial crisis?
What do you consider the beginning of the "precipitous" climb in oil prices (my answer would would be 2008, when they really began to spike)?
The financial crisis began in 2007 when the subprime mortgages began to blow up. All the dollars that the Fed and the federal government began pumping into the economy in response resulted in a run-up in most commodities, not just oil.
Patrick,
The percentage run up in oil prices far outstripped other commodities with the exception of stuff like corn, rice and gold.
Like peak oil, we can see now that the financial crisis started in ~2007, in hindsight. In 2007 pretty much all we were talking about was the extreme spike in oil and gas prices.
It is quite possible that the rise in oil and oil related product prices is what tipped the sub-prime market over the cliff and added the financial crisis to the economic and energy crises.
Despite the glut, there is still an energy crisis which will become much more pronounced when Mexico ceases exporting around 2015. Or sooner if the government collapses under the current spat of narco terrorism which has suddenly made Phoenix, Arizona the kidnap capital of the world.
The odds that the economic and financial crises were not to some degree precipitated by the energy crises are close to zero.
If we were to accept the possibility that if energy prices had not spiked, the economic and subsequent financial crises may not have happened.
Only a freakish doomer would argue that the current spate of crises are a good thing.
So one could conclude that there is a very real possibility that Peak Oil is in fact a very bad thing with unforeseen negative consequences such the mass starvation and pandemics Africa is experiencing.
Yes - the Africans have little need for energy products to survive. But they are dependent upon 1st world countries for health care, pharmaceuticals and food. With the first world chasing its tail around energy, economics and finances, the Africans are being left to starve or succumb to the ravages of cholera.
This is not doomish, this is reality.
podnaught
Anon,
Fair enough. I was really just trying to get a handle on what you marked as the beginning of the precipitous rise. For myself, I considered that to be in 2008-- where the greatest increases occurred after the Fed started cutting interest rates and the U.S. federal government sent $300-600 checks to almost every household. It's not surprising that a lot of that money ended up in a commodity that many experts/talking heads (choose your slant) were saying was guaranteed to continue going up.
I agree, though, that high oil prices have not helped-- and may have partly caused-- the financial crisis.
Podnaught,
For clarity's sake, I'll take each of your points one by one.
The percentage run up in oil prices far outstripped other commodities with the exception of stuff like corn, rice and gold.
Well, this depends on when you define your start date, but looking at a 20 year chart, I see that most commodities are flat until around 2004, and then most start creeping up. For your records, copper also had a similar price rise, as did silver.
Actually, if we use 2004 as the start date, most commodities doubled or tripled, with a few exceptions.
But this begs the question: so what?
Like peak oil, we can see now that the financial crisis started in ~2007, in hindsight. In 2007 pretty much all we were talking about was the extreme spike in oil and gas prices.
How did peak oil start in 2007 if production increased in 2008? That's just weird.
It is quite possible that the rise in oil and oil related product prices is what tipped the sub-prime market over the cliff and added the financial crisis to the economic and energy crises.
Ugh, such loose terminology.
OK, well, first off... yes. It is certainly possible that oil prices acted as a catalyst. However, it's a dangerously messy explanatory model, because of speculation and its effect on prices. Seeing as we still aren't completely sure how much of an effect speculation had on prices year-on-year, it's hard to say how much of the price rise was actually due to speculators hedging against risk.
Despite the glut, there is still an energy crisis which will become much more pronounced when Mexico ceases exporting around 2015. Or sooner if the government collapses under the current spat of narco terrorism which has suddenly made Phoenix, Arizona the kidnap capital of the world.
Wow, 2015? FOR SURE?
Like how the last 20 years were going to be peak oil, according to Campbell?
Anyway, define "collapse." Do you mean that Mexico will become a completely lawless anarchy, or that the Calderon government will be ousted and replaced?
And what makes you think the Mexican government will collapse when it's been through far more tumultuous times?
Finally, I sincerely doubt that Phoenix, Arizona is the kidnap capital of THE WORLD. Unless, of course, you think the United States is the world. By the way, it's important to note that most of the kidnapping victims in Phoenix are apparently illegals, for better or for worse. But seriously, the world? Gimme a break.
The odds that the economic and financial crises were not to some degree precipitated by the energy crises are close to zero.
Binary language. The question isn't whether oil had an effect (it did), but how much of an effect it had. In a multivariate world, we should be careful to avoid single variable explanations. Yes, oil had an effect. The question is: how much of an effect did it have? We can't say with certainty.
If we were to accept the possibility that if energy prices had not spiked, the economic and subsequent financial crises may not have happened.
Only a freakish doomer would argue that the current spate of crises are a good thing.
Of course they're not good. But so what? That doesn't mean that oil is the cause of everything.
So one could conclude that there is a very real possibility that Peak Oil is in fact a very bad thing with unforeseen negative consequences such the mass starvation and pandemics Africa is experiencing.
Links? I'd like to see how the current "mass starvation and pandemics" are different from previously.
Yes - the Africans have little need for energy products to survive. But they are dependent upon 1st world countries for health care, pharmaceuticals and food. With the first world chasing its tail around energy, economics and finances, the Africans are being left to starve or succumb to the ravages of cholera.
I'd like to see data that suggests that the rate has increased in any exceptional way. Otherwise, it's hard to say one way or another what's going on. Hell, even with a rate increase it's hard to say what's going on.
This is not doomish, this is reality.
Funny how this works. If you're pessimistic and say nasty things about the present and future, you're "realistic."
podnaught - Typical doomer ranting. Complaining about the present and future situation, yet offering 0 solutions or discussion. Just saying "yep, we're fucked, sorry". That's a doomer for you.
Despite the glut, there is still an energy crisis which will become much more pronounced when Mexico ceases exporting around 2015
So there's a crisis with a glut and there's a crisis with a shortage? Good to know where you stand. You can't win with you guys.
The odds that the economic and financial crises were not to some degree precipitated by the energy crises are close to zero.
That's a great opinion. However, odds are statistically calculated. I'm not quite sure how housing bubble economics, fannie/freddie, greedy banks and wall street traders, subprime mortgage lenders and the Fed have anything to do with high oil prices. The funniest thing over the last 6 months is watching the PO doomers try desperately to link a housing bubble to peak oil. Compare LATOC's daily cherrypicked doomer headlines today to those back in July 2007 when oil was at its highest.
But they are dependent upon 1st world countries for health care, pharmaceuticals and food.
All of which don't require a lot of oil. Certain African countries have been in the shitter for decades, with or without high oil prices.
I agree with JD. Conservation would negate the greater part of the threat. However, I am doubtful that folks will wise up without getting hit on the head with the "High Price" stick and I worry what irrevocable damage (climate and resources like fresh water and clean air) might occur in the interim. I'd be interested to hear what role you feel increased regionalsim, in governance and food and energy, might play in conservation.
Juliet,
Not to pick nits, but wouldn't you agree that air is actually significantly cleaner in the OECD than it's been in... well... a long time?
I'm not so worried about air as I am about water. Water's a much more overlooked resource than it should be, in my opinion. Not only is it actually physically scarce in places, it's often badly managed even where it's not. I don't think pollution is a problem in most of the OECD, but it will become a serious issue in India and China in the coming century, I believe.
It's funny living in the Northeast and seeing rivers and streams everywhere and realizing that this is something that we should never take for granted... but we do.
If only the Hudson could be "shipped" to Los Angeles. Then again, they might use it to water triple story lawns out there. :-)
JD/ Ari,
I don't see air quality in China and India improving as the use of coal increases and the water situation there is just awful, too. My concern is for these developing countries that have huge populations that may go the same route we are going: too big/fast/much to the point of failure. You can't refreeze the ice caps, you know? Even with climate change the US will be ok, we're rich, we’re relatively few and we’ll move, whatever. However, it might be irresponsible to not predict that some populations will experience die-off due to imminent resource shortages that go beyond fossil fuel. My query in the first post was how, going beyond the doomsday peak oil argument, you guys feel an anti-globalization/pro-regionalism solution WORLDWIDE might ameliorate this. Also, would a bit of economic contraction be a bad thing long term? GDP is false god, no? Maybe an era of sustainable equilibrium/SSE in is in order?
p.s. Ari thanks for the apology, my friend. I will do my best to be more rigorous and specific next time. I have some very conservative friends and they wail on and on about Adam Smith all the time and you are correct to suggest I give WON a re-read. For now let’s leave it at this: Smith’s arguments referenced markets within communities that have easily deciphered reciprocal social and financial responsibilities and the social approbation inherent in these arrangements are a vital part of his equation. None of this applies in global markets. My grasp of the NEOCON raison d'etre could use some polish as well. Maybe after I finish some Chalmers. I still disagree about prison for white color criminals. I think it would serve as a massive deterrent, especially if the incarceration occurred in a general population facility. I'm also a proponent of drug legalization (marijuana especially). Our drug prohibitions are illogical and imagine the tax revenue. Warms my black heart ; )
A complaint from the Peanut Gallery: JD and Ari, you need more topic posts. The reader comments start getting long and self-involved after a few days. We need fresh meat all the time, or else people start sniping at each other.
Juliet,
Lots here...
OK, well, air quality. Actually, air quality may continue to improve in China and India as they spend greater amounts of money on scrubbers and the like. Remember that we have a great deal of coal power in the US as well, but that we also require producers and manufacturers to install pollution controls. The same thing will probably happen in Beijing soon, in my opinion.
I don't believe that "re-regionalism" is in order, nor do I believe it's a good thing. I think trade and globalization are GOOD, even if I question the Jeff Sachs school of thought. Globalization, for better or for worse, has offered a greater portion of the world's population the chance to eat, have a place to live, and medicine than ever before. It's not perfect, and I damn the unintended consequences, but the idea of stopping trade in favor of some sort of bizarre trade substitution model doesn't work for me.
Also, yes, AGW is an issue, but it's hard to say what it will mean for certain. I know the Jim Hansens have decided that it's TEOTWAWKI for sure, but if the past decade has demonstrated anything, it's that we don't always know what will happen (for better or for worse.) Even the IPCC says that the caps going poof is not likely for at least centuries, so I have to wonder if the poor can't be pulled up before then.
Finally, I do suggest a re-read of Smith. There's a lot there that people forget, particularly regarding his attitudes toward taxation and social welfare. Smith is not, by any stretch, Rand. For some reason, the Randroids have latched on to him and made him into some sort of econogod, but I don't think that's fair. I find it just as unfair that he's treated so badly amongst "liberals," because they ignore the overarching and simply true message that unimpeded markets tend to lead toward maximization of resources and what we call today a Pareto efficiency.
Oh, and Chalmers? Pfft. I like the old man (hell, I have two degrees from the UC), but if you want Japan stuff or IR stuff (his IR stuff is good, but has some issues that are easily addressed), I can get you some new, more up-to-date work. I assume you're reading Blowback or one of the related books?
Benny,
All in due time, my friend. I'm job hunting, so comments are all the time I've got. :-)
You can't refreeze the ice caps, you know?
Actually, techniques are being developed to achieve that goal. See here for details.
Also, would a bit of economic contraction be a bad thing long term? GDP is false god, no?
We're going through a bit of economic contraction right now, and it very definitely is a bad thing because economic contraction throws millions of people out of work. GDP=Jobs. The recent Obama stimulus package is a case a point. The government will spend hundreds of billion dollars to artificially boost GDP. And it is being done for the express purpose of creating jobs.
GDP isn't perfect, and I'm open to new ideas, but you're not going to get anywhere with superficial critiques of GDP that ignore the elephant in the room. How are you going to stop/reverse economic growth without mass unemployment?
Some FTW dweeb just posted this beauty:
"The death and collapse of the U.S. and global economies has been inevitable for some time. The collapse of industrialized civilization cannot be prevented by any plan or scheme invented by any political party operating in the current economic paradigm. There are alternatives and options that can save hundreds of millions, if not billions, of lives, but they are outside the box that you think in. I and many others have foreseen and accurately predicted these events for years. We are known as the Peak Oil/Sustainability Movement. -Ruppert 2/17/09"
Great stuff, anon. If you want to comment, please sign a name. Otherwise, your comment gets nuked.
Speaking of Ruppert foreseeing and accurately predicting events:
"While I had serious doubts about America's ability to recover from Katrina, I am certain that - barring divine intervention - the United States is finished; not only as a superpower, but possibly even as a single, unified nation with the arrival of Hurricane Rita.
- Ruppert 9/21/05"
Fine JD, here's my name. Nice censorship, lol.
Way to mention Ruppert's quote about hurricane RITA, lol. How long ago was that now? Ruppert and I are worried about the present. Ruppert predicted 2,000 oz. gold by March and GM collapsing. How can you say that he was wrong? Ruppert called for the beginning of the end. I believe him. The end is near, and the real people that believe it are literally heading for the hills. I know I am. The peak oil/sustainability movement will keep this earth going. The rest of you will die off. I can't say that I mind though.
Jay Hanson was right. "This could come about through the "crash" that many fear -- a genuine collapse over a period of one or two generations, with much violence, starvation, and loss of population."
Have fun JD, Ari, Barba, chief, Andy Ryan, and all you other anti-doomer scum.
The rest of you will die off.
No we won't. "die off" is the biggest vaporware product out there. Hundreds of announcements daily -- no product. It's your fantasy, not reality.
I can assure you with 100% certainty that I'm not going to die in a die off.
Just for fun, here's another bit from Gardener's earlier post:
"I, personally, am heading to my plot of land in Oregon to start farming and self sustaining. You idiots staying in the cities will be done in 3 months."
Gardener, you wanna bet your hairless testicles that I'll be done by May 20th? (insert sound of cleaver being sharpened)
First off Gardener, it's not "censorship" if you aren't following the VERY simple rules and using a name.
Anyway, let's get on with your post.
Way to mention Ruppert's quote about hurricane RITA, lol. How long ago was that now? Ruppert and I are worried about the present. Ruppert predicted 2,000 oz. gold by March and GM collapsing. How can you say that he was wrong?
Gold still isn't close to $2k/oz. It broke $1K, but just barely and has now settled around $9xx/oz. It makes sense that gold is bullish anyway, since people tend to put money into commodities like gold when securities are bearish anyway.
Also, predicting that GM would fail is grounds for soothsayerhood? Really? Because I predicted that GM would be in trouble when I did a paper on the auto market in undergrad! You should listen to me too, then!
Ruppert called for the beginning of the end. I believe him. The end is near, and the real people that believe it are literally heading for the hills. I know I am. The peak oil/sustainability movement will keep this earth going. The rest of you will die off. I can't say that I mind though.
Wow, you're such a humanitarian. So, you basically have no problem with essentially condemning billions to death? Nice.
And no, you're wrong. You're NOT concerned with the present. You're concerned with the FUTURE. You and Ruppert are hand-wringing about events that may occur in the future, near, distant, or otherwise.
Jay Hanson was right. "This could come about through the "crash" that many fear -- a genuine collapse over a period of one or two generations, with much violence, starvation, and loss of population."
Ah, I love the definite language. No, Hanson isn't right. Not until the population is 100,000 and everyone is eating squirrels. Until then, he MAY be right.
It's almost funny how your language is similar to people referring to religious prophets. The conviction is similar, as well. THE END IS NIGH. REPENT, SINNERS!
But seriously, it's uncanny.
Have fun JD, Ari, Barba, chief, Andy Ryan, and all you other anti-doomer scum.
I'm scum because I want solutions to save people's lives? I'm scum because I like the idea of people being able to access food, shelter, and medicine?
And here I thought that calling for the oilmageddon with a sort of glee and absolute certainty was kind of scummy. I've been wrong all along!
Gardener, I think you need a bucked of cold water dumped on your head, because you seriously sound like someone who has bought into a cult, hook line and sinker.
Have fun JD, Ari, Barba, chief, Andy Ryan, and all you other anti-doomer scum.
I'm pretty sure you are just trolling, but hatred of civilization sums up the Doomer movement. I can't say I willingly embrace all aspects of modern society, but that doesn't prevent a rational analysis of its prospects.
It doesn't take a psychiatrist to realise that Ruppert is a paranoid schizophrenic. I wouldn't be surprised if Hanson, Kunstler and others who share his delusions fall into the same category.
It's a pity, because there are more interesting possibilities to discuss than Doomer-porn fantasies.
"The end is near, and the real people that believe it are literally heading for the hills. I know I am."
I'm tempted to respond to this by saying "Bye, don't let the door hit you on the butt on the way out", but instead I'll quote this section just to point out that this guy is a troll, pure and simple.
Instead, I'd like to a previous point that was made in the thread, the difficulty of switching from a larger vehicle to a scooter.
First of all, most bad-case scenarios bring up the idea that an oil/gasoline shortage will get pretty bad in the future. You'll see $6/gallon gas or higher and not enough of that. So lets start with that idea and present the situation of 3 hypothetical guys, Joe-Bob, Jim-Bob, and Billy-Bob, who commute to work in their F150's about 25 miles (from Burb's into a MAJOR metropoliton area). The work on the west loop within several miles of each other, they spend most of their commute moving at about 25 miles/hour, so their F150's get maybe 12.5 MPG for that trip.
Now, how much gas are those three guys using in a week on their commutes? 3 Guys X 50 miles/day round trip X 5 days a week =750 miles. 750 miles / 12.5 MPG = 60 gallons.
OK, let's say these guys do this for awhile and notice that at $6 per gallon, geez, they're paying $120 per week each just to get back and forth to work. They're getting tired of paying over $100 just to fill up the tank every time. So Joe-Bob, Jim-Bob and Billy-Bob start trying to figure something out and come up with the genius idea of carpooling. Furthermore, lets presume that one of them decided he needed to invest in a better commuting vehicle, so he buys the equivalent of the 2009 Toyota Camry hybrid, with 33 MPG city (but even better, since much of the commute is under 30 MPH). These three guys get together for lunch at a place not too far from where they work and decide one day that gotta set up a car pool.
So let's look at these 3 guys commuting in Joe-Bob's 2009 Camry:
First, they gotta get up earlier and drive further, but they get to use the HOV lane, so that helps. They still manage to add 5 miles extra to their trip, to get all 3 guys to work. So 60 miles/day round trip X 5 days/week = 300 miles. 300 miles/ 33 miles/gal = 9.1 gallons.
Previous gas use for a non-descritionary commute = 60 gallons, new gas use = 9.1 gallons.
That's a reduction to less than one SIXTH the gas that they were using before. And that's not accomplished using exotic new technology, that's not accomplished by these 3 guys having to drive a scooter in the rain, that's accomplished by no exotic technology at all.
Can discretionary driving by reduced if needed? Yeah, of course. Can gas use in NON-descretionary driving be reduced with current tech and half a lick of sense combined with some inconvience and checking iCarpool or something? Yeah.
So what happens to the supply/demand curve when something 3 guys named Joe-Bob, Jim-Bob, and Billy-Bob can set up quickly can reduce the gas they use by that much?
Now, are these 3 guys gonna give do this before gas gets to $6 a gallon? Probably not. But other people I know are buying smaller cars NOW, and some are even trying to set up carpools. If we hit an emergency situation, ya' think more folks will go to the trouble to carpool? I do.
And that's just one example. What happens to that equation when Toyota rolls out a plug-in hybrid?
Right now, Peak Oil is the least of our worries.
signed: Dr. Steel (yeah, I know, get a new Blogger ID already)
JD,
I suggest the rates we “need” are actually doing us more harm than good in terms of our mental health, the health of the environment AND the long term health of the economy. I did say that “a bit of economic stagnation” might be a good thing. There is a benefit getting mixed in with all the difficulty here. People need to take better financial care and use common sense rather than blindly following the mantra of “spend it all then pull your equity to invest in the market something for nothing”. Maturity can be painful.
It’s irresponsible to continue preaching growth that 1. Requires massive amounts of resources in a finite system and values the effluent at zero 2. is so good at redistributing wealth upwards that the middle class is sucking wind. Is this your point? When you say “GDP isn’t perfect” what do you mean?
Would it be curtains if we shift our paradigm away from growth and take a more measured maintenance/improvement stance? If the fiscally conservative behavior that will assure the health and security of an individual or community is at odds with the behavior that will support our globalized economy, can it stand for long?
What do you all think Obama should be doing? Should the banks have been allowed to fail? GM? Under water homeowners? Why do all republican senators have the same haircut?
Since peanut gallery comments are being accepted, why do you guys even bother addressing the comments of folks that are just here to be angry contrarians? Sometimes it feels like a pro-life/pro-choice debate here (no one listening to anyone, lots of name calling, completely unproductive).
I don't get what you are saying: if we all resort to better conservation methods oil will never run out!!?
Gardener wrote:Ruppert predicted 2,000 oz. gold by March and GM collapsing.
And gold won't hit 2,000 by March. March is 5 more market days from now. Ruppert's prediction will fail miserably.
And wow, you mean Ruppert called GM failing without more government help? Who would have thought, huh? A sinking ship for the last two decades, I was expecting GM to totally turn it around in only 2 months after getting government aid! After all, we are in a deep global recession.
Idiot.
Hate to champion more of Ruppert's drivel on this blog, but the guy has really lost it recently. Here's a recent excerpt
"Bring it on. We're ready.
The beginning of the end indeed... Everybody in the PeakOil/Sustainability movement needs to start getting their tracks shoes on and their heads right. Hydrate and get your shit together. The world's being beaten to death and we're the ambulance."
Ruppert and the PO prophets are the ambulance....LOL. /Shudder
JD, Ari, Andy Ryan, and BD: I can most certainly tell you that your way of life is over. Unless you have been prepping (mentally and physically), your chances of survival are slim to none. I stated that Ruppert called for the end, yet you refuted nothing. I don't know if you'll be gone in exactly 3 months, JD, but it won't be long.
The BDI collapsed a few months ago. What does that mean? It means global trade will grind to a halt any day now.
Countries that rely on food for their imports (see: oil rich middle eastern countries and *gasp* Japan) will starve to death.
That's not to mention all of the oil projects that are now offline, leaving that oil in the ground and no available for use.
bc: It's funny that you call Ruppert paranoid. You are obviously too dumb to question things as Ruppert does. Mike Ruppert, Kunstler, Heinberg, Hanson, and yes, even Savinar, will be the new leaders, similar to how George Washington was in charge of the U.S. when it was born after the American Revolution. I would start respecting them.
Ari and Andy Ryan: So Ruppert didn't predict everything 100% (JD already tried to red herring that argument by post Ruppert's Rita quote), he came damn well close. Ruppert also called for all the banks to fail. Check citi and BoA's stock today. He called the DOW to go to 4,000, it's going to break under 7,000 today. Ruppert also stated, and has been right, about the many intentions of Russia, China, and the NWO that will be forming once TSHTF. He also predicted China's drought and wheat fungus, which will starve billions in that country and stop China from buying up U.S. T-bills.
I hope either of you two don't live in a major city either, as the FEMA camps will soon be put to use. Also to Andy Ryan, I read your garbage of a blog and will laugh the hardest when you perish under TPTB. You will feel like such an idiot and you should have spent your time prepping instead of attack Ruppert.
This will be my last post on here. A old mentor of mine once told me "Do not bother to help those who do not want to help themselves". I've concluded that you all are helpless, and I wish I could be there to see you squeal when TSHTF.
I am heading to my plot of land next week with a few others from my PO/Sustainability circle. I'm waiting on a few other preps to come in from Savinar's preps store and then I'm off. My apartment lease runs out at the end of the month and I couldn't ask for a better time. Time to prepare for the end. You will all soon be kicking yourselves for not listening to me.
IF there is a dieoff it isn't because Jay Hanson is right.
Let's look at some of his assertions:
1. Peak Oil = Peak Energy. Nothing else works.
WRONG.
2. Peak Oil = Peak Fertilizer. Fertilizer cannot be made from anything other than oil.
WRONG
3. Peak Oil = Peak Transportation. Electric Cars do not work.
WRONG
4. Peak Oil = Lights Out. Somehow in Jay's world, electricity = Oil.
WRONG
5. Peak Oil = No long distance Trade. In spite of the ROMANS trading with the Chinese.
WRONG
6. Peak Oil = Peak Plastic and that spells doom because there are no substitutes. i.e. paper bags instead of plastic bags don't work. Plastic derived from starch or lignin doesn't work.
WRONG
7. Peak Oil = Inlestic Demand. We cannot reduce our consumption because "everything" depends on oil. If we cut back we are DOOMED.
WRONG.
In fact, as this thread points out, conservation is the simplest and easiest way to keep things running. Hell, I am on record on this blog as saying that everyone taking the bus ALONE would mitigate peak oil enough to get a working plan in place even if you believe in Hirsh's ten year "wedges".
Peak Oil MAY mean "die off" if we decide to fight a nuclear war over it but that's about it. Otherwise peak oil = big recession then those who make the right decisions pull ahead and the rest languish.
It DOESNT in and of itself mean DOOM and especially not because of the bogus assertions Jay made.
DB
Conservation stimulates the economy!
Give your head a serious shake please. I don’t understand why you continue to peddle this useless drivel. I get the feeling you’re attempting to fool the masses with your stories depicting everyone happily driving mopeds when the time comes…what is your motivation behind trying to mislead everyone into proper preparation?
On earlier articles I posted that saving GM was idiocy and you countered back that saving American jobs was important to saving millions of jobs. Sorry, but you are inconsistent in your ridiculous arguments of “Save GM (previous post), but buy mopeds (this post)”. The two contradict one another.
By the way, where are the hundreds of millions of mopeds required for everyone to happily and serenely get around? You make it sound as if we can all stop by Wal-Mart on the way home tonight, pick up a moped, and happily drive away with the problem now behind us.
Do you know what happens to the $3K price of the mopeds when there are dozens upon dozens maybe even hundreds of people wanting the buy a limited stock? Your supply and demand rules work against you here don’t they? Conveniently forgotten, I bet.
By the way, shouldn’t our economy be stimulated right now, on its own? After all we are conserving by the droves, this is the highest point in conservation in years!
Your vision of the ‘future’ is no more reliable then someone high on acid, I would say its less reliable, at least the person that is high has an excuse, what is yours?
I’m extremely frustrated that you are attempting to ‘enlighten’ or ‘lead’ people with your point of view, when you clearly have not given it much thought, nor do you appear to have a firm grasp on reality. Case in point – according to your logic we should be thriving at the moment, because the world is conserving energy!
New Guy
The BDI collapsed a few months ago. What does that mean? It means global trade will grind to a halt any day now.
Maybe you should know WTF you are talking about before spouting off such drivel. Yes the BDI did hit a 10ish year low in December of around 660, but what is the BDI today? 2,057 Yes, that's right, the BDI has been rallying lately, as you can see. But so what, if you knew anything you'd know the BDI measures PRICE, not actual dry cargo being shipped. You'd also know that most ships are booked on contract years in advance, and because of this inelastic availability of ships, any drop or raise in demand of ships will have a HUGE impact on the price, which is what the BDI measures.
Sooo going by your valuable logic, since we have had a huge rally of the BDI we should be flooded with more merchandise than we could possibly need very soon, RIGHT?
Oh man, so much to respond to here...
JD, Ari, Andy Ryan, and BD: I can most certainly tell you that your way of life is over. Unless you have been prepping (mentally and physically), your chances of survival are slim to none. I stated that Ruppert called for the end, yet you refuted nothing. I don't know if you'll be gone in exactly 3 months, JD, but it won't be long.
Contrary to popular belief, it's impossible to refute the future, since it's necessarily unknown. Soothsaying is, for better or for worse, impossible to do with absolute accuracy. All we can do is niggle over model details and premises.
So there's a reason we aren't "refuting" your argument-- it's impossible to refute ANY prediction.
The BDI collapsed a few months ago. What does that mean? It means global trade will grind to a halt any day now.
Looking at the 5 year BDI, it's clear that while the current number is relatively low, it's still higher than the "pre-2004" averages. I'm not sure I'm ready to freak out.
Countries that rely on food for their imports (see: oil rich middle eastern countries and *gasp* Japan) will starve to death.
Actually, a lower BDI is good for the consumer. As wikinvest states: "When the BDI decreases, every other consumer/producer in the global value chain wins. Since the BDI measures procurement costs, when these costs go down, producers benefit from increased margins, and consumers benefit from lower prices for finished products."
So, since the BDI is not even close to the historical low, and a lower BDI means greater consumer surplus... I'm not sure where the starvation comes in. Please explain your logic.
That's not to mention all of the oil projects that are now offline, leaving that oil in the ground and no available for use.
Why pump it up if there's no demand? Depressing the price of oil any further is not good, either. What we should be doing is preparing projects for the future, but even that's precarious-- there's no telling when demand will actually increase again!
It's funny that you call Ruppert paranoid. You are obviously too dumb to question things as Ruppert does. Mike Ruppert, Kunstler, Heinberg, Hanson, and yes, even Savinar, will be the new leaders, similar to how George Washington was in charge of the U.S. when it was born after the American Revolution. I would start respecting them.
...
Ari and Andy Ryan: So Ruppert didn't predict everything 100% (JD already tried to red herring that argument by post Ruppert's Rita quote), he came damn well close.
You said, flat out, that he was "right about gold being $2k/oz." Gold never got close to that. Ruppert called for the end of the US due to hurricanes with ABSOLUTE CERTAINTY.
This is not the language of a cool-headed observer. It's faux-prophecy. Why should I trust his other "prophecies" if he doesn't even have the integrity to admit when his past ones were incorrect?
Ruppert also called for all the banks to fail. Check citi and BoA's stock today. He called the DOW to go to 4,000, it's going to break under 7,000 today.
The Dow (Dow is a name, not an acronym, by the way) is at around 7,400 right now. Considering that it's 4:30 EST, I doubt it'll lose another 400 points. We'll see what happens next week, of course, but today? Doubtful.
And calling for bank failures makes you great? In that case, you'd be better off listening to Nouriel Roubini, since he actually has the necessary training and tools to make meaningful predictions. Or perhaps Nick Taleb if you like statistics. In any case, there was no shortage of people sounding the alarm over banking.
Ruppert also stated, and has been right, about the many intentions of Russia, China, and the NWO that will be forming once TSHTF. He also predicted China's drought and wheat fungus, which will starve billions in that country and stop China from buying up U.S. T-bills.
HOW THE HELL DID RUPPERT PREDICT A DROUGHT?
Now I know you're trolling. By the way, China is dealing with the drought the same way it deals with everything: hard work.
Also, give examples of Russia and China's intentions or GTFO. I happen to have spent about a college minor's worth of studies on China, so this will be interesting for me.
I am heading to my plot of land next week with a few others from my PO/Sustainability circle. I'm waiting on a few other preps to come in from Savinar's preps store and then I'm off. My apartment lease runs out at the end of the month and I couldn't ask for a better time. Time to prepare for the end. You will all soon be kicking yourselves for not listening to me.
Best of luck. I hope it goes well for you.
Juliet,
Since peanut gallery comments are being accepted, why do you guys even bother addressing the comments of folks that are just here to be angry contrarians? Sometimes it feels like a pro-life/pro-choice debate here (no one listening to anyone, lots of name calling, completely unproductive).
I tend to think that it's slightly better than a pro-life/pro-choice debate because some of the people I'm debating with aren't getting into murky gray areas of morality, but are actually posting misinformation. My goal in engaging people is to offer rebuttals for the sake of setting the record straight for lurkers. I don't particularly care about "being right," but I do get irked when I see people post absolutely atrocious things.
Free Altus,
I don't get what you are saying: if we all resort to better conservation methods oil will never run out!!?
On the contrary. JD is saying that conservation is a key response to oil scarcity that has associated social and economic benefits.
New Guy,
On earlier articles I posted that saving GM was idiocy and you countered back that saving American jobs was important to saving millions of jobs. Sorry, but you are inconsistent in your ridiculous arguments of “Save GM (previous post), but buy mopeds (this post)”. The two contradict one another.
By the way, where are the hundreds of millions of mopeds required for everyone to happily and serenely get around? You make it sound as if we can all stop by Wal-Mart on the way home tonight, pick up a moped, and happily drive away with the problem now behind us.
It's strange how people think that responses to decades-long issues require instantaneous responses.
Since "peak oil" is a long-run issue (really), the question is how societies respond to stagnating or decreasing oil supply, given the proper market signals. In the case of something like scooters/hybrids/PHEVs, it's possible that we'll see a sort of "Prius effect," whereby people have to wait in lines to get their product, but people are plenty capable of all sorts of substitution.
Assuming my Accord becomes too expensive to drive regularly, I can replace it with transit, or even my bicycle, as I wait for my scooter to come in. Or whatever.
But, the point is not that the $3K scooter is, in and of itself, THE solution. That's never the argument. It's that it's one of many solutions available to society.
Do you know what happens to the $3K price of the mopeds when there are dozens upon dozens maybe even hundreds of people wanting the buy a limited stock? Your supply and demand rules work against you here don’t they? Conveniently forgotten, I bet.
Actually, it depends. Are we doing a short-run or long-run analysis? In the short-run, increases in demand lead to increases in price, ceteris paribus. However, in the long-run, the producer increases output, finds a new equilibrium price, and eventually economies of scale kick in. The currently $3K scooter may actually be cheaper in the long-run.
But this all depends on a lot of factors.
By the way, shouldn’t our economy be stimulated right now, on its own? After all we are conserving by the droves, this is the highest point in conservation in years!
Conservation doesn't affect every sector in the same way. Dollars are, at least in the short run, zero sum-- meaning that a dollar not spent on one sector is a necessary loss for that sector. The less people spend on oil, the less money Exxon/Aramco/IOCs get. However, that money may, in theory (and usually in practice) get funneled into other sectors.
Unfortunately, we are seeing no spending. Good for savings rates, bad for producers.
Your vision of the ‘future’ is no more reliable then someone high on acid, I would say its less reliable, at least the person that is high has an excuse, what is yours?
Hey, the best soothsayers on the planet (read: statisticians) got banking incredibly wrong. If they can't get it exactly right, then I guess the excuse is...
SOOTHSAYING IS TRICKY BUSINESS. :-)
I’m extremely frustrated that you are attempting to ‘enlighten’ or ‘lead’ people with your point of view, when you clearly have not given it much thought, nor do you appear to have a firm grasp on reality. Case in point – according to your logic we should be thriving at the moment, because the world is conserving energy!
I think you're arguing a different premise from JD. Your moral outrage would be better placed if you actually were arguing the same thing.
Ari
It's strange how people think that responses to decades-long issues require instantaneous responses.
Since "peak oil" is a long-run issue (really),…
So who is the prophet now? Who ever said it was a long-run? Even if it is the long run, do you see moped plants gearing up production at the moment? Explain and support your (really), no differently than you ask others (their appears to be a great many on this post that believe in cataclysmic events, for the record I do not subscribe to that either, I’m with you on that one Ari) to support their certainty on the other side of the coin.
I’m not suggesting the flow of oil will stop instantaneously; however, let me point out (using your own conservative 4% decline rate in prior posts) that supply after peak will likely decrease by 4% every year, this percentage is greater than the decline in demand resulting from the current global recession… every year, with no breather. And here’s the cherry, you expect the world economy to successfully produce all these mopeds when droves are being laid off year after year. $3K (if the price remains even close to that when demand rises) will still be a giant investment when you do not have a job.
Let me ask you this, when oil ‘skyrocketed’ to $150, where were all the moped sales? I heard many more stories on the news of gas theft and than I heard of skyrocketing moped sales. Gawd, I too want the cleaner, more efficient world. Please, convince everyone to want mopeds and to want to give up much of their extravagances/excess and I think you’ll have a solution.
The way I read your arguments, people will want to be thriftier when markets force them. I don’t buy that, markets forcing consumers will not yield the same results, as consumers truly wanting to buy a product. I’d love to see a cleaner, thriftier utopian society, the problem is its human nature (meaning the majority will act on instinct) to want more, i.e. collect more resources.
New Guy
So who is the prophet now? Who ever said it was a long-run? Even if it is the long run, do you see moped plants gearing up production at the moment? Explain and support your (really), no differently than you ask others (their appears to be a great many on this post that believe in cataclysmic events, for the record I do not subscribe to that either, I’m with you on that one Ari) to support their certainty on the other side of the coin.
New Guy, "long-run" doesn't mean that it's "far away from now," but that it's something that occurs over the length of long period of time.
In any case, why would moped plants gear up right now? How could they? Until there are buyers, why would anyone produce more than they can sell? It makes no sense!
Also, I can't fully understand your last sentence. Are you saying that I'm demonstrating certainty? I'm not. What have I said that is so certain that I need to explain? I'm saying that people react to price signals by buying into different modes of transportation. That's all.
I’m not suggesting the flow of oil will stop instantaneously; however, let me point out (using your own conservative 4% decline rate in prior posts) that supply after peak will likely decrease by 4% every year, this percentage is greater than the decline in demand resulting from the current global recession… every year, with no breather. And here’s the cherry, you expect the world economy to successfully produce all these mopeds when droves are being laid off year after year. $3K (if the price remains even close to that when demand rises) will still be a giant investment when you do not have a job.
Well, here's the thing: as Mills points out in Myth of the Oil Crisis, that's unlikely in the near or mid-term future. However, let's talk about the "peak."
When? 10 years from now? 20? 30? 100? The point is that we've been told it's "peak year" every year since the 1980s. WITH CERTAINTY. So what? Well, we know a few things: Even sharp drops in oil production of double digits, while damaging to economies, can be compensated for in short periods of time. Demand will shift inward EVEN FURTHER in response to a price rise.
Also, we don't know for certain what will happen to employment in the case of reduced oil production-- we don't have enough data.
Let me ask you this, when oil ‘skyrocketed’ to $150, where were all the moped sales? I heard many more stories on the news of gas theft and than I heard of skyrocketing moped sales. Gawd, I too want the cleaner, more efficient world. Please, convince everyone to want mopeds and to want to give up much of their extravagances/excess and I think you’ll have a solution.
Well, here's the thing: one man's "excess" is another's baseline. I think a Macbook Pro is the minimum laptop to get my work done. My friend thinks a Dell Crapomatic is just fine. Who's right?
The thing that bothers me about the whole "consumption is bad !!!11!!one!" argument is that it's rife with hypocrisies and personal judgments. "X is bad, but Y is good." But who defines what's bad and what's good? A quorum of wise men? The same society that we are supposed to damn? Meryl Streep?
If Captain Picard doesn't decide, then count me out!
Oh, and moped sales actually did quite well, relatively speaking, during the oil price bubble. So did small cars. Look at how hard it still is to buy a Smart in the US!
This will be like the 1970 oil crisis, only this time we're going to go from the 9000 SUX (10 points if you get the reference) to Priuses and Volts and crazy future mopeds.
The way I read your arguments, people will want to be thriftier when markets force them. I don’t buy that, markets forcing consumers will not yield the same results, as consumers truly wanting to buy a product. I’d love to see a cleaner, thriftier utopian society, the problem is its human nature (meaning the majority will act on instinct) to want more, i.e. collect more resources.
This isn't really complicated. Prices affect demand. Price goes up, and demand goes down, ceteris paribus. I'm not arguing anything complicated, strange, or really outlandish.
Let's use a good example that I know a lot about: video games.
When the PS3 came out, it was $600. I'm sure any gamers will remember that. It was outlandishly expensive relative to the 360 and the Wii. Ignoring for a second that the Wii is a geriatric entertainment machine, we know what happened to PS3 sales RELATIVE to the other systems: they were pretty much crap. The 360 did well as far as mainline systems go. What was the key difference, other than blu-ray? Simple. The 360 was $200 cheaper.
Substitution occurred.
The same will happen with autos. People will trade their SUVs away for Civics, and their Civics for Priuses and so forth.
And the capacity for these small cars already exists. It's not like we have to build new plants-- they already are there in Tennessee and Detroit and wherever the Ohio Honda plant is...
People will react to price.
Jebus.
"Where will the money come from to buy mopeds?"
Well gee. Those who can't afford them will take the bus. Or walk. Or bicycle. Those who can afford them will buy them...
So what is your point?
Here's an example right now. In Mumbai some people commute 40km to work using bicycle.
How, since you think it's impossible?
They own two BICYCLES.
One is used to get from home (10km) to the bus station and left there.
The other is left downtown at night and ridden to work on arrival (another 10km).
Use your imagination doomers.
Good luck with your pumpkin patch in rural oregon btw.
Can I visit yiu on my way past to Vegas this summer?
Here's a clue: there will be NO collapse this summer.
DB
Here's a clue: there will be NO collapse this summer.
There will be no peak oil caused collapse this summer or next or next, etc etc, but quite frankly I think we could be literally weeks/months away from a complete financial collapse. And of course the doomers will attribute it wrongly to peak oil.
I really hope I'm wrong, but it seems like everything is hanging by a string. EU has said they will need a $65 trillion bank bailout. You know if they are admitting to that figure, the truth is much worse.
"EU has said they will need a $65 trillion bank bailout."
Link?
No way it is trillion.
DoctorJJ
Sorry DoctorJJ you are right! I got my numbers mixed up. I had read about the US total liabilities being $65 trillion(that's from a blog and i'm not sure of its accuracy so I won't bother posting the link) and EU bank bad assets totaling roughly $25 trillion.
http://boards.msn.com/MSNBCboards/thread.aspx?threadid=937111
OptimisticDoomer: Stop being a douchebag and fear-mongering. Get your facts straight before you post. Thanks.
Why, why, why do doomers assume that in the event of a global collapse of civilization they will survive? Because of their plot of land and survival handbooks? What they are talking about is an unprecedented collapse of human industrialization; I can imagine the pollutants alone causing devastating damage to the natural environment they plan to rely on; factor in the fallout from conventional/nuclear resource wars, as well as more extreme weather events as the Earth warms (a process that would probably be greatly exacerbated by global war), and I can't imagine any plot of land anyone could depend on to sustain them; especially with literally hundreds of millions of armed and desperate people running around. Any honest doomer must accept the extreme liklelyhood that they will not survive.
Why, why, why do doomers assume that in the event of a global collapse of civilization they will survive?
That has never made sense to me either. How exactly are they going to fend off hordes of starving city dwellers? In any case, if the situation becomes that desparate then the government will probably take control of assets like land.
I think the real reason is more to do with psychological closure. Once people have decided there is something to fear (whether rightly or wrongly), it activates the "fight or flight" response. Taking action goes towards resolving the mental conflict; being unable to act causes stress. Taking action then justifies the perceived danger, and it then becomes self-reinforcing. A frequent criticism by hardcore doomers of the less committed believers at places like TOD is that "if you really believe in PO, you will be making preparations not just gassing on the internet". The implication is that just talking without acting implies the danger is really not that severe.
But once you are in a mindset where you think armageddon is round the corner, it's not much more of a stretch to think that carrying a copy of Twilight in the Desert will render the carrier immune from evil.
OptimisticDoomer: Stop being a douchebag and fear-mongering. Get your facts straight before you post. Thanks.
WTF I posted the corrected info that was posted in the mainstream media FFS! Maybe you should wake up to reality & realize not everything is unicorns & roses. Unless you think $25 trillion in bad assets in EU alone is good news? LMAO.
Unless you think $25 trillion in bad assets in EU alone is good news? LMAO.
Yep. Things don't look good.
"Unless you think $25 trillion in bad assets in EU alone is good news? LMAO."
As long as the rest of the world is in worse shape, financially, than the US, then that's just good for us, right? If everyone get's F'd equally, then what's the difference? It's still a level playing field. I'm hoping Europe, Asia, and everyone else gets hit harder than we do. That just means we come out stronger.
DoctorJJ
"As long as the rest of the world is in worse shape, financially, than the US, then that's just good for us, right?"
Since the US is the world's largest debtor, then no, it would appear that if our creditors are suffering, we would suffer accordingly and it would not be "good." But then, I detect an undercurrent of S&M on this list, so maybe it is "good" for some of you.
otto
otto,
Yes, the US is the largest debtor-- but it's not the most indebted nation. That's Japan.
However, the question is whether or not the US will stop servicing its debt. That's doubtful. What's most likely, however, is that the US will have a harder time selling t-bills, as evidenced by Clinton's trip to China.
On the other hand, it means that people will want to shore up their finances with a "safe" investment. That's t-bills for you. Good and bad.
I think you'll get more readership if there is a post everyday.
"My comment on his post is even better. I think it sums everything up nicely:"
How long did it take you to be able to suck your own c0ck so well? Did you have to do stretching exercises or something?
DoctorJJ
"In a pinch, half the population could commute by bike. As a former bike commuter and professional bike commuting advocate, it would take a BIG pinch to get people to commute by bike, as well as infrastructure such as bike lanes and paths, bike storage facilities, and a bike mentality.
While I don't entirely agree with Benny that we need a new post every single day, i think the current econocalypse talk here has bugger all to do with peak oil.
I'm as nervous about the economy as anyone else. Actually, probably more than most, since I used to work in an accounting office. But we still need to maintain perspective. Even a redux of the Great Depression isn't likely to result in the post-apocalyptic fantasies people like Kunstler have been predicting for a decade. The hardcore survivalists will continue to be the kooky ones, unless and until their proverbial SHTF, at which point they're probably going to be in as much trouble as everyone else.
Carpool,
Well, yeah. But if faced with the possibility of not commuting to their jobs at all or dealing with a bicycle, what are people going to choose? Pessimists greatly underestimate the human potential to adapt to changing conditions. We wouldn't have survived as a species for as long as we have if that weren't the case.
I was reading your blog (I assume it's yours, at least). Specifically, the post on "the willingness factor" really struck a chord with me. For Americans, there's a cultural norm that gives the status quo its momentum. My brother and I (who don't drive) are of a very different mindset than my parents, who I suspect have trouble imagining a life without the freedom of individual car travel.
But, when pressed, change occurs quickly. My grandparents had to make changes rapidly to adjust to the realities of life during the Great Depression. The relatively rapid decline in gasoline usage last year during the massive run-up in prices also showed how quickly people can adapt, IMO.
Of course, as a humane person, I've an interest in making the necessary changes as easy as possible for as many people as possible. I don't believe that peak oil is going to be the cataclysm some are predicting, but I still see plenty of room to mitigate and make a post-oil future (whenever it may arrive) much easier to reach.
Even a redux of the Great Depression isn't likely to result in the post-apocalyptic fantasies people like Kunstler have been predicting for a decade. The hardcore survivalists will continue to be the kooky ones, unless and until their proverbial SHTF, at which point they're probably going to be in as much trouble as everyone else.
I definitely agree with you there! It is my understanding, and I could be way off, that the depression wouldn't have been nearly as severe without the dust bowl. Although we do have historic droughts currently in cali & texas, we have many other states that can pick up the slack. Maybe Oregon can go back to being the strawberry growing capital, for example. We in the states might be paying a lot more $$ for fresh fruit & some veggies though.
I actually like the economic talk on here because it's one of the few sites I know of to get level-headed responses and not 'OMG DOOM' or 'everything is just peachy'. Just my 2 cents.
Not to beat a dead horse, but if you go to GreenCarCongress, or the now-all-but-defunct The Energy Blog, you find a lot of posts on meaningful technical innovations. GreenCarCongress has daily postings, and The Energy Blog used to blog constantly.
I think frequent posting sets the tone for conversation. W/O daily posts, we start getting lulus in here, with their econo-PO-doom.
POD is a great website, but you are not fully mining the potential.
Reading Ari carefully reason with some wackos for days and days on end...not sure about that.
Post more! Post more! waa-waaa.
If I may suggest a couple of ideas of future posts:
1). An analysis of by how much worldwide oil use has dropped, and how soon oil use will rise again as the economy recovers, and
2). How much oil would be needed for manufacturing after the peak to lower our oil use (eg; if we use x amount of barrels in one year on building buses/hybrids, rail, infrastructure, etc, we will save y amount of oil within 1, 2, 5, 10 years, etc. creating economic growth in certain sectors and lowering our yearly use below the decline rate.
How about a guest blogger to fill in the time between posts.
Start with Benny!
-Robert Dobb
Is depression here or not? not very clear. But if you look at the past history recessions and depressions come and go. Economies go through cycles and recession is part of the cycle.
In the mean time, I just came across a very helpful website on the current economic downturn and employment:
http://www.recessioninfocenter.com
http://www.recessioninfocenter.com/2008_tax_tips_for_recession.html
Great post. I finally get this blog. :)
My only quesion mark is "Jevons Paradox": increased efficiency leads to increased income/resources, which are input to the economy, thus growing it, thus increasing demand, ultimately requiring growth and more use. Diverting the increased efficiency to leisure (http://www.workersoftheworldrelax.org/combined7.swf - NOT a communist/commune/hemp skirt site despite the unfortunate name) seems to be a step in the right direction.
That's an interesting point. Do you have a specific exception in mind?
To construct a scenario where reducing personal fossil fuel usage does not make economic sense is pretty easy, but it does not apply to most people who drive cars. In Canada, people like their cars because it is really damn cold outside. You can assign a dollar value to commuting to work in a heated car rather than an unheated bicycle or scooter. If the cost of the oil to run the car is less, then driving is cheaper. Telecommuting is a nice option though.
You say that "The large new supply of secure crude is going to come from conservation"
I agree. The question is: Will this conservation come by way of deprivation and grief, or will it come by way of anticipation and planning?
www.conserve-oil.com presents a scheme for conservation that is guaranteed to work, by paying households and average of $500 per month to conserve. And it doesn't cost the government (i.e., the taxpayers) a dime!
Okay. I get it now. I like this argument.
Society isn't going to collapse, it's going to change. I tend to think like this also, although I admit the doom and gloom is sexy and addictive.
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