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World oil production. Source: Graphoilogy using US EIA data

Near record oil prices (at $110-115/bl, WTI is at its highest ever except for a few weeks in July 2008) suggest that markets continue to be worried about tightness of supply. While some of that is linked to the disruption to Libyan oil production, there is a growing awareness that (i) the supplies of cheap oil are dwindling, and (ii) it is increasingly difficult for supply to follow demand growth.

A lot of the growth in demand comes from emerging markets (including oil producing countries themselves) where fuel prices are subsidised to a more or less large extent and thus demand is not that sensitive to market prices. Despite still growing supply (as shown in the graph above), a lot of the market supply-demand adjustment seems to have to come from demand destruction in those markets subject to full price exposure, ie mainly the rich world. And as we know, demand is not very price-sensitive in the short term, thus the massive price increases required to cause people to drive less or eventually to switch to thriftier cars.

The combination of record production and very high prices suggests that we are in a period of persistent tension on the oil market which will require more demand destruction. In the absence of consistent, systematic policies to wean ourselves off of oil, this will mean more economic pain both at the micro and macro levels.

I mentioned in yesterday's diary that our oil policies (or lack thereof) were at the heart of our support for unsavoury regimes in the Middle East, with all the unintended consequences we've seen (Islamic terrorism, deep mistrust of the West by the oppressed populations), but that point has been largely ignored in the discussion thread...

So, even when consequences stare at us in the face (the economic crisis, oil-inspired foreign policy messes), we seem unable to change our energy policy and to make a real effort at killing our addiction to oil. Indeed, the last US president that gave it a serious try (with real results) was punished in the next election and is still seen as a mediocre president.

Which means only one thing. Even if production is at a record high, there is no doubt that we are running into a wall. There is not enough oil for the coming combined demand of the US, Europe, China and the rest of the world, so demand WILL have to go down somewhere. If that does not happen thanks to smart, pro-active policies, it will happen in a messy, paroxystic way - whether through skyrocketing prices, rationing, economic collapse or all of these.

We still (maybe) have a bit of time to go the route of smart policies. But we won't avoid having to consume less oil in the future.

Originally posted to Jerome a Paris on Wed May 04, 2011 at 05:21 AM PDT.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  as many here know (59+ / 0-)

    It is my profound conviction that a large part of "smart policies" will by necessity be a significant gas tax - which, yes, I know, is regressive, is unfair to the many Americans who have no choice but to have a car and is politically deadly.

    But consider this: I argued for such a tax in 2005, when oil was at $50-60/bl, and gas at $2/gal. A $2 tax (brought in over time) would have brought about gas prices which are the same as what they are today except that all that money (something like $200 billion) would be going to the US Treasury instead of to semi-dictatorial governments elsewhere. That kind of money could pay for a lot of urban public transport investment, subsidies for fuel-efficient car purchase and poverty alleviation for rural drivers.

    •  the thing is (13+ / 0-)

      if you believe that prices will go up, then a gas tax makes a lot of sense.

      Fundamentally, people who argue against a gas tax believe that prices will not increase beyond current levels. How safe a bet is that?

      •  If you don't believe (6+ / 0-)

        that prices are going to go up then either huge reserves are magically going to appear, or people in China and  India are not going to want cars, or we are somehow magically going to prevent people in India and China from buying these things. Seeing as the Factories are mostly there to produce components, they appear to have a lot better chance of ending up with the vehicles than not.

        Any bet against the Developing world running through fuel stocks at a rate comparable to ours seems wishful thinking at best. So why do we insist on thinking that we can run our economies using a majority of the supply? and  what right do we have to these supplies over them?

        If these questions can't be answered to their satisfaction, then it's our job to reduce usage (and arguing that we havent designed our cities to cope with this, so we shouldnt do anything about it is a response that the rest of the world should say  Tough, your problem, you sort it out)

        Interviewer: What do you believe is behind this recent increase in terrorist bombings? Helpmann: Bad sportsmanship

        by ceebs on Wed May 04, 2011 at 05:44:36 AM PDT

        [ Parent ]

        •  Or in your mental model ... (3+ / 0-)

          ... the people in China and India don't figure into the picture.

          Which is why its a lot easier to believe outlandish things when what makes it outlandish is sitting out somewhere in your blind spot. Experiencing the sluggish economies for the 90percenters in the last generation, a gut feel for what 10% growth per year that spills over to raise the purchasing power of thirty or forty percent of a billion is harder to come by.

          Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

          by BruceMcF on Wed May 04, 2011 at 08:51:53 AM PDT

          [ Parent ]

      •  To Jerome thanks for the diary! (4+ / 0-)

        sig...You just ran into a hardcore progressive who's just another working stiff with an MBA degree & therefore a vociferous labor union supporter [smile]

        by Democrats Ramshield on Wed May 04, 2011 at 08:02:55 AM PDT

        [ Parent ]

      •  simply wrong (0+ / 0-)
        Fundamentally, people who argue against a gas tax believe that prices will not increase beyond current levels. How safe a bet is that?
        exactly the opposite.

         You are consistently wrong on this subject.

        We argue that a gas tax helps NO ONE. Its a recessionary tax that only hurts the little guy and artificially creates a bubble of inflation.

        Right now we are close to 18 year high inventories, and demand in this country is DOWN.  Yet look at the games being played.

        Yeah, this all ends badly, collapse and wars, thats is how this ends, but a tax only hastens the day MOre wars break out.

        Given the govt more money to buy more tools of war, while inflation strips our country and people is not the answer.  Never was, never is.

        Bad is never good until worse happens

        by dark daze on Wed May 04, 2011 at 09:06:19 AM PDT

        [ Parent ]

    •  Fundamentally, those of us who oppose a Gas Tax... (4+ / 0-)
      Recommended by:
      Lupin, Mnemosyne, dark daze, drewfromct

      ....champion the working and middle-class, who have seen wage stagnation for the past decade.

      A gas tax would decrease after-tax wages for those groups we, as Dems, purport to protect.

      Is that what we want?  Do we want to tell a struggling middle-class household, "We know you're treading water, but you need to pay higher energy prices.  Suck it up.  It's good for you."

      Meanwhile, those very same pols who want the working poor to experience an after-tax wage decline tool around the world in private jets, lamenting global climate change in conference after conference, when they could be saving the Earth via Cisco TelePresence.

      Jerome a Paris, you want more public transport?

      Then let's champion an annual graduated wealth tax, hitting households with net worth of 50M at 1%, to 8% for the Buffets and Ellison's of the US.  

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

      by PatriciaVa on Wed May 04, 2011 at 07:22:15 AM PDT

      [ Parent ]

      •  Forestalling a gas tax... (3+ / 0-)
        Recommended by:
        Mnemosyne, BYw, PeterHug

        ...simply means that each and every penny of the price increase in gas goes into the pockets of the oil companies, commodity speculators and OPEC.

        Yes, it hurts. I'm now paying as much for gas each month as I am for the car payment. I'm sure some of us are paying more.

        But I'd rather capture some of that now unavoidable increase in the form of some kind of fuel or Carbon tax so that we have the funds to do something proactive about energy from here on out. We missed an opportunity rejecting Carter's now overwhelmingly modest proposal of a 50 cent increase in the Federal gas tax over 10 years in the late 70s.

        The so-called "rising tide" is lifting only yachts.

        by Egalitare on Wed May 04, 2011 at 08:10:39 AM PDT

        [ Parent ]

      •  that won't quite work (4+ / 0-)
        Recommended by:
        Egalitare, EthrDemon, timethief, ceebs

        Sure, you could institute a wealth tax and use it to build public transport. The result would be a bunch of new trains and buses tooling around half empty because there is still no additional incentive to get the working stiff out of their car and onto said train or bus. The purpose of a gas tax is to influence behavior more than raise revenue for some worthy purpose.

        A better approach would be to institute a gas tax and then offset it in the tax code so it’s a wash for low and middle income families. If we’re going to reduce demand there must be strong incentives to drive less and buy more efficient vehicles. To keep this from being an unmanageable financial burden for working people you could increase the Earned Income Tax Credit, or lower the bottom two tax brackets to offset the gas tax. Raising the EITC might be a good way to go because then people who have no federal income tax liability would still benefit.

        Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. - Groucho Marx

        by Joe Bob on Wed May 04, 2011 at 08:13:12 AM PDT

        [ Parent ]

        •  I like this. (0+ / 0-)

          I have thought that a gas tax was necessary.  Listening to this argument I like this idea.  

        •  incentive to use public transit? (1+ / 0-)
          Recommended by:
          jam

          How about free wi-fi Internet access on all transit buses and commuter trains?

          If one could be doing something useful or fun online on the way to work rather than driving, the time penalty for using public transit doesn't look so bad.

          Laptops and netbooks are practically everywhere in the US these days.

          That's a positive incentive. As for negative incentives, do you really believe that gasoline will be <= $5/gallon by election day next year? Or that you will ever see $3/gallon gas again?

          Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

          by alizard on Wed May 04, 2011 at 05:07:52 PM PDT

          [ Parent ]

      •  That is precisely the problem ... (2+ / 0-)
        Recommended by:
        EthrDemon, BYw

        ... what we need is hard to obtain in the face of the 1percenters taking all the growth, leaving nothing for the 90percenters ...

        ... but we still need it.

        Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

        by BruceMcF on Wed May 04, 2011 at 08:53:20 AM PDT

        [ Parent ]

      •  Motivation must be directly related to consumption (1+ / 0-)
        Recommended by:
        BYw

        When prices go up, consumption goes down and we need to consume less; there's no denying that our consumption levels are unsustainable. For many years we in the U.S. have paid less for gas than they do in Europe - it's unrealistic to think that can continue forever. If petroleum gets more expensive, the alternatives will then become comparatively cost effective to produce. Taxing petroleum to subsidize other energy alternatives would level the playing field and give them a chance.
        It's what our species needs to persist.

        I have some questions...

        by ocular sinister on Wed May 04, 2011 at 10:42:19 AM PDT

        [ Parent ]

      •  Gas tax is necessary (0+ / 0-)

        It's unfair to many, because they (we) are so dependent on gasoline for transportation. The gas tax must be used to build public transportation, and to build a sustainable society.

        The gas tax should be long term, gradual, and predictable. I would like to see the tax charged nationally to increase by 10 cents per gallon, every year, for at least 25 years. That way, the economic changes will not be a surprise nor precipitous.

        It HAS to be done, so we don't kill ourselves.

      •  Norway has probably the highest gas taxes (1+ / 0-)
        Recommended by:
        EthrDemon

        in the world, and price at the pump is approaching 3 dollars a quart! They combine that with high taxes on cars in relation to their weight and horsepower. On the other hand electric cars incur no taxes, tolls or parking fees. The objective is to have an impact on carbon emissions.
        Public transportation is safe and reliable, and the infrastructure is tiptop.
        And nobody is going to complain that Norway doesn't care about the working class. The gas taxes aren't so important to the working man if you pay attention to the other things.

        "I almost died for the international monetary system; what the hell is that?" ~ The In-laws

        by Andhakari on Wed May 04, 2011 at 11:22:35 PM PDT

        [ Parent ]

  •  Energy Policy is the root cause of terrorism (8+ / 0-)

    The two are inextricably linked.  You cannot address one without the other.  Religion and resources have been the primary underlying cause of human conflict since the dawn of time. Although the masses aren't always told why they are going to war.

  •  In my current set of books (3+ / 0-)
    Recommended by:
    DBunn, Mnemosyne, wonmug

    I keep running into the phrase "post colonialism." That would be nice.

  •  Gas guzzler owner complained on local news... (12+ / 0-)

    ...about the price of gas, and how he can't afford to drive anywhere.  He said, "They need to do something about the gas prices".  

    While we all are being hit in our own wallets from the high gas prices, it's kind of discouraging to still hear people expecting that low gas prices can be demanded so that they can continue to drive humongous gas guzzlers.  Sigh...

    •  But it's pretty normal for people to be upset (6+ / 0-)

      when their routines are disrupted. I think people can and will adjust if they are presented with some sensible explanation for the rise in prices.

    •  How do you feel about Dem Pols and Figureheads.... (1+ / 0-)
      Recommended by:
      drewfromct

      ...who complain about global climate change, yet tool around the world in private jets, to speak in conference after conference, when they could just as easily be present via Cisco Telepresence, without consuming one drop of oil?

      Sigh....

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

      by PatriciaVa on Wed May 04, 2011 at 07:25:08 AM PDT

      [ Parent ]

      •  oh, please (2+ / 0-)
        Recommended by:
        Tennessee Dave, Andhakari

        Why don’t you just flat out say that Al Gore is a hypocrite, and fat.

        But sure, if ‘Dem Pols and Figureheads’ taking a figurative piss in the ocean would make you feel better then, by all means, they should teleconference instead of flying anywhere. If you’re really concerned, why not reserve your contempt for the climate change deniers who also fly in private jets, and for more nefarious purposes?

        Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. - Groucho Marx

        by Joe Bob on Wed May 04, 2011 at 08:24:15 AM PDT

        [ Parent ]

      •  Well, considering that republican "pols and... (1+ / 0-)
        Recommended by:
        BYw

        figureheads" who deny climate change, are "tooling around the" country in private jets, to spread their climate change denials; and considering that, like their Democratic colleagues, fact that they all likely travel on political junkets far more often than necessary--I'm not as concerned about people who are traveling to try to get the world community unified in seriously addressing climate change issues.  

        (But that wasn't the subject of my comment above.)

  •  The game is to make sure oil addiction continues (4+ / 0-)

    The idea here, in making public policy, is to make sure that those who have power know keep and expand that power--this has always been the case in history and is graphically true in the United States and most other places. In terms of pure power the United States has a dominant military establishment that can reach into any country and kill, detain, torture anyone it chooses anywhere in the world without need for justification, evidence, or trial other than some variant of lettres de cachet. Americans have made, since the oil embargo, securing oil as the central focus of U.S. policy (I believe the "Cold War" by then had wound down and was basically a theatrical device). Controlling the Gulf has been, pretty much achieved with fits, starts, and bumps along the way--Iran being the only problem but it is surrounded and, at this time, powerless despite its posturing. The U.S. also insures the free flow of oil particularly to China--this gives the U.S. real global hegemony and will keep the U.S. dollar dominant, in my view, for some years to come. This dollar hegemony is America's way of exacting tribute from the rest of the world--any serious run on the dollar by major countries will be seen as an act of war and dealt with accordingly. The danger to the dollar lies with the private equity markets and the move towards gold and silver to become the new global currency--but we aren't there yet and Uncle Sam has a few more tricks up his sleeve.

    But to the point, oil is America's way to staying on top and "we" will do anything to stop true movement towards either alternative energy or elegant engineering. This will, of course, fail ultimately but it does buy time.

    •  I regard the movement to PM (0+ / 0-)

      as an effect off bad (mainly US) public policies, including fiscal, economic, energy, industrial (lack of),  foreign, not a cause.

      IOW, it's a tax on stupidity for US dollar holders.

      And the 2012 election will be a choice between bad and worse public policy.

      Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

      by alizard on Wed May 04, 2011 at 05:17:30 PM PDT

      [ Parent ]

  •  Thank you for posting this (4+ / 0-)

    I've been starting to write in the last week or so about the impacts of hitting the limits to growth and why alternative energy isn't going to substitute for oil.  It's a discussion we need to have more of here.

    •  On optimistic pessimism (7+ / 0-)

      "It's never too late to get the best possible outcome that can be derived from present circumstances."

      It's important to distinguish between realism and pessimism. Realism is simply an honest assessment of present and likely future conditions. If conditions are difficult, so be it-- the question is the same as ever: what can be done to change and/or adapt to them. Pessimism is an emotional attitude, a lack of hope or confidence. We don't want pessimism to be the thing that prevents us from achieving the best possible outcome that can be derived from present circumstances.

    •  how long do you think it takes (1+ / 0-)
      Recommended by:
      jam

      to build:

      1. a large scale windfarm comparable in size to a nuclear reactor complex?
      2. a solar thermal facility of comparble size?

      Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

      by alizard on Wed May 04, 2011 at 05:21:59 PM PDT

      [ Parent ]

      •  wind (0+ / 0-)

        15 years (not including permitting!)
        3600 MW @ 25% cf
        1800 turbines @ 2 MW each
        3 days per turbine erection time

        of course, the joy of wind is that you can parallelize the construction. Get 15 teams working and you can do it in a year.

        Causation was, is, and ever shall be a slippery bitch, so we're best sticking with noting the facts

        by jam on Thu May 05, 2011 at 02:04:59 PM PDT

        [ Parent ]

        •  try (1+ / 0-)
          Recommended by:
          adrianrf

          2 years - 343 MW wind and 3 years - 392 MW solar thermal.

          However, what we need in the USA is industrial scale production facilities for the major components of both kinds of hardware.  My guess is that this can be done in a few years.

          The limitation in moving to renewables is far more a matter of political will than technological possibility.

          Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

          by alizard on Thu May 05, 2011 at 11:41:29 PM PDT

          [ Parent ]

          •  links are bad (0+ / 0-)

            but I found the wind one...
            149 turbines over 2 years is 1 turbine every 5 days.
            They are using the siemens 2.3 MW, so a bigger machine than my estimate above. And there is nothing to indicate that it will take the full two years. Call it 0.5 MW per day which is roughly what I said. Not enough to quibble over.

            Your original question was how long does it take to build a

            a large scale windfarm comparable in size to a nuclear reactor complex?

            I took that to mean comparable in annual energy production since that's the only comparison that makes sense. A 1 GW nuke at 90% capacity factor would output the same amount of energy of 3.6 GW of wind at a 25% capacity factor. Or approximately 10 times the wind farm that you reference above. Thus, your 2 years just became 20.

            So, like I said before, if you build them in series it would take 15-20 years. If you build them in parallel, it will take 1.5-2 years.

            Causation was, is, and ever shall be a slippery bitch, so we're best sticking with noting the facts

            by jam on Fri May 06, 2011 at 08:37:52 AM PDT

            [ Parent ]

  •  US primary concerns now are pictures of dead (1+ / 0-)
    Recommended by:
    Boreal Ecologist

    terrorists and birth certificates.

  •  A New World Record (2+ / 0-)
    Recommended by:
    eightlivesleft, pat bunny

    for oil extraction (just barely)! I didn't think it would happen, but it did. Of course, it also means a new world record in carbon emissions.

    There's no serious effort being made by our government to mitigate peak oil, so I doubt we will be dealing with the problem until it's way too late. Instead, the current rise in the price of energy will likely choke off economic growth in the US and cause unemployment to grow.

    •  Our Government??!!!! What about China? (0+ / 0-)

      China already emits 18% more CO2 than the US, and under a best case scenario put forth by the Chinese government, it will emit 72% more CO2 by 2020, compared to 2005.  Meanwhile, there are some misguided Dems who want the US to emit 20% LESS CO2 by 2020, relative to 2005??!!!

      You want to address global climate change.?

      Then mandate that China must decrease its emissions by the same percentage as the US, off the same base year.

      If it doesn't, US multinationals and citizens would be prohibited from traveling to that nation.

      Because, if China continues on its current trajectory, nothing the US does to curb CO2 will be consequential.  But it will negatively impact job growth in this country.

      Learn about Centrist Economics, learn about Robert Rubin's Hamilton Project. http://www1.hamiltonproject.org/es/hamilton/hamilton_hp.htm

      by PatriciaVa on Wed May 04, 2011 at 07:29:23 AM PDT

      [ Parent ]

      •  Well, you see... (4+ / 0-)
        But it will negatively impact job growth in this country.

        The whole point of peak oil (and other resource depletion) is that it is going to make infinitely continued growth impossible.

        Those who support banning cocaine are no better than those who support banning cheeseburgers

        by EthrDemon on Wed May 04, 2011 at 08:36:59 AM PDT

        [ Parent ]

        •  Unless and until (2+ / 0-)
          Recommended by:
          pat bunny, EthrDemon
          The whole point of peak oil (and other resource depletion) is that it is going to make infinitely continued growth impossible.
          we can develop a cheap and profitable means of space travel, it is already impossible to achieve infinitely continued growth, as we presently inhabit a single planet with finite resources.

          Infinite growth within a finite space with finite resources is the growth model of a virus or a Cancer cell, ultimately doomed to kill its host and itself.

          Al Qeada is a faith-based initiative.

          by drewfromct on Wed May 04, 2011 at 09:59:33 AM PDT

          [ Parent ]

          •  Same thing I was saying (1+ / 0-)
            Recommended by:
            drewfromct

            I find the argument that "we can't do anything about X because it will hurt economic growth" to be ironic with respect to resource depletion issues, because continued growth with make the problem worse, and that in turn will make continued growth impossible.

            Those who support banning cocaine are no better than those who support banning cheeseburgers

            by EthrDemon on Wed May 04, 2011 at 12:52:06 PM PDT

            [ Parent ]

      •  We might have a chance at that (3+ / 0-)
        Recommended by:
        PatriciaVa, EthrDemon, alizard

        if we can put a price on carbon emissions. In other words, if through a carbon tax here in the US where, almost like a VAT, manufactured goods etc. had the cost of carbon emissions embedded in their price and we placed a carbon tariff on imported goods on a like to like basis.

        Because China is more carbon intensive than the US, and because global supply chains are inherently carbon intensive to operate, it would give US manufacturing a leg up while addressing the urgent CO2 problem.

        While the price of consumer goods here would go up, jobs that had been previously outsourced via globalization would come home. A "fair trade"? Maybe.

        This idea is explored in more detail in a book by economist Jeff Rubin called "Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization"

        "We are stardust, we are golden, we are caught in the devil's bargain, and we got to get ourselves back to the garden." - Joni Mitchell

        by shaggies2009 on Wed May 04, 2011 at 10:58:01 AM PDT

        [ Parent ]

        •  that's one of the most interesting (1+ / 0-)
          Recommended by:
          shaggies2009

          ideas I've seen, and this might be a workable way to get carbon-based externalities into imported goods. I see the long-term future of manufacturing, especially physically large and heavy items as regional, not global.

          It's becoming increasingly apparent that global "Just In Time" manufacturing may not be A Good Idea. As any manufacturers frantically looking for alternatives to the components which won't be coming out of Japan for quite some time may have figured out.

          As for China, it is also expanding its internal green energy facilities faster than anyone else is, especially the USA.

          Peak Oil is NOW! Looking for intelligent energy policy alternatives? Try here.

          by alizard on Wed May 04, 2011 at 05:27:27 PM PDT

          [ Parent ]

    •  It is already too late (2+ / 0-)
      Recommended by:
      Crider, EthrDemon

      We traded a chance at exerting some control over future events for a few more years of intoxicating denial.  Was it worth it for anyone?  We are going to have to make some hard choices and do the best we can.  Maybe in losing ourselves, we can find ourselves again.

      My favorite graphs are always the ones showing future energy demand and the components that allegedly will satisfy it.  Almost without exception, new discoveries, increased production, and alternative technologies smoothly rise to meet a forecast of increased consumption.  There's no chance of that happening.

      A terrible beauty is born. --W.B. Yeats

      by eightlivesleft on Wed May 04, 2011 at 07:31:29 AM PDT

      [ Parent ]

  •  well (1+ / 0-)
    Recommended by:
    Joe Bob

    it's mostly a quibble over exactly when the 'peak' is for a number of reasons. first, there's going to be a production plateau, as higher prices are going to drive oil companies to add even small additions to the mix, even crappy sources of oil that are only profitable at high prices.

    also, there's been conflating of terms which doesn't help - people will point to data for 'all liquids' and say 'there's no peak yet'. adding more in terms of refinery gain and ethanol or condensates confuses the issue because none of those are oil.

    condensates especially - condensates come primarily from natural gas wells, so it has more to do with the economics of NG extraction than oil extraction. but it's thrown in with crude anyways. ethanol has been bumped up in the last 5 years or so, and we all know that's a boondoggle.

    crude oil extraction is basically at the same high it hit in 2008, despite the fact that demand is higher than it was then. oil is the important indicator here.

    anyone born after the McDLT has no business stomping around acting punk rock

    by chopper on Wed May 04, 2011 at 07:19:11 AM PDT

  •  Paradoxically, I think such (1+ / 0-)
    Recommended by:
    PatriciaVa

    a trend is optimal, if we assume governmental inaction: Oil prices rise as increases in demand aare greater than increases in supply, but the squeeze isn't as savage as a decrease in supply would be.

    Basically, such a setting allows individuals, companies, states and counties to adapt more easily than in the case of a peak while still providing an incentive to adapt.

    Iuris praecepta sunt haec: Honeste vivere, alterum non laedere, suum cuique tribuere. - Ulpian, Digestae 1, 3

    by Dauphin on Wed May 04, 2011 at 07:24:57 AM PDT

  •  The challenge (2+ / 0-)
    Recommended by:
    Egalitare, alizard

    There is not likely to be any one instant at which "peak oil" occurs, at least in terms of prices.  This is because there are incremental supply expansions (those high prices do encourage more development and there are more reserves left to be discovered, albeit of diminishing size and increasing marginal extraction cost.  So there will be spot shortages, followed by bouts of conservation and development.  And different countries will be affected differently; if the US doesn't build any renewables and China does, we'll be screwed.

  •  Nope, its Peak Oil now. (2+ / 0-)
    Recommended by:
    shaggies2009, alizard

    There isn't any big departures in those figures from the ASPA base case on figures from three years ago. The conventional crude oil peaked already, but growing deepwater is offsetting that for the moment.

    However, deepwater, even if it is growing, is growing from a smaller base because it rests on pushing out the borderline in exploitation, while the decline in conventional crude oil is an ongoing decline of the largest component. Deepwater cannot keep growing fast enough to keep offsetting the ongoing declines in mature conventional oil fields.

    Somewhere in 2010-2012, there's your peak. Which is to say, now.

    Support Lesbian Creative Works with Yuri anime and manga from ALC Publishing

    by BruceMcF on Wed May 04, 2011 at 09:00:42 AM PDT

  •  I don't think we have (3+ / 0-)
    Recommended by:
    drewfromct, wonmug, alizard

    an energy policy.... We have an oil policy (which we aren't allowed to know about) and a coal policy, and (presumably) a separate policy for every other source of energy. For us to have any sort of unified policy on energy the free flow of information would be required, and the flow of capital would have to be disclosed.  and that is anti-capitalism, and therefore anti-american. ipso facto---no policy, much flailing about.

    I was once a treehouse, I lived in a cake, but I never saw the way the orange slayed the rake... The Llama Song.

    by farmerchuck on Wed May 04, 2011 at 09:42:02 AM PDT

  •  To paraphrase Churchill, (2+ / 0-)
    Recommended by:
    alizard, Andhakari

    I believe he once said something along the line of..

    You can always count on the Americans to do the right thing - once they've exhausted all the alternatives.

    That's the frustrating thing - it's not that we don't have answers to the problems facing us, it's that we keep trying to put off the inevitable. It's worse than losing weight or giving up smoking.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Wed May 04, 2011 at 05:31:12 PM PDT

  •  Clearly and concisely stated: (0+ / 0-)
    There is not enough oil for the coming combined demand of the US, Europe, China and the rest of the world, so demand WILL have to go down somewhere. If that does not happen thanks to smart, pro-active policies, it will happen in a messy, paroxystic way - whether through skyrocketing prices, rationing, economic collapse or all of these.

       I'd say our foot is in that door, already.  I mean the "being dragged, kicking and screaming" one.
  •  tipped and recc'd nt (0+ / 0-)

    witness the GOPranos...rethugs....Paul Wolfowitz: "If they fuck with me or Shaha, I have enough on them to fuck them too."

    by change the Be on Thu May 05, 2011 at 12:33:33 PM PDT

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