Peak oil economic impact

[The Grim Squeaker]

Economics is essentially the core of PO. The energy grid will take the hit and keep going, because oil is a pathetic amount of power generation.

Since 57% of US Oil is generated and 2% of US power is Oil generated, no arguments there. (Though I had been unaware of the tiny amount of the power grid reliant on oil, I had thought it would be more like 15-20%).

But the sudden cessation of goods transport by air and truck will be a sledgehammer following up on the implosion of the companies that have reaped the highest profits in recent years.

As well as squeezing smaller ones out of existence. By highest profits do you mean the oil companies exclusively? (Or, say Microsoft, or other High-technology companies for example).

AV is right insofar that innovation and ingenuity can't get us out from the economy shitstorm building.

Probably won't, (Not can't) since a massive revolution on solar power or hydrogen, etc' would help. Of course, we'll also be helped by the giant bio-engineered pigs replacing planes at the time.

We're going to see the USA kneecapped economically and flailing around desperately.

The whole resource wars aspect, though China will be hit massively also (I find the claims of "US's old allies will send their oil to China since they can ditch the fact that the US owns many of their companies and don't like them" A wee dubious, though of course I'm oversimplyfying to a criminal degree here).

The entire Middle East, with the slim possible exclusion of Iran, will simply implode and cease to be governed.

Er, why not Iran?
I could see Dubai remaining, due to their already (Relatively) small reliance on oil, (Relatively) advanced education, strong infrastructure spending and preperations for not relying on Oil as an export.
In addition, what about Israel? (The main problem for both countries will probably be being swamped by poor, desperate and starving peasants who now can't even get their bread [Rather like the Mexican Wave/African immigrants fear-mongering buggery that tends to pop up]).

The shockwaves will be the Great Depression Mk. 2, quite frankly.

No arguments on that, the question is whether it will be much worse, or merely "Amost as bad" (My opinion of it) with the sheer length of it causing it to degenerate until stabilization is reached. (Less people, more nukes, not necessarily in that order).

[The Grim Squeaker]

Seven years =! 1-2 years. (The time in my examples).
Still, You're right in that my use of generation was erroneous, I was thinking more along the lines of a half generation (a man in his 20's going to his 30's - 10-15 years). Very poorly worded on my side, and indeed you're right in that its a fair bit slower than your thoughts on the situation, but by a multiple of 2-3 at worst, not an order of magnitude. (As might have seemed to be the proposed case).

I don't follow. So your idea of a long term slope is only a decade or two?

No, it was my idea of when it will start affecting life strongly and very noticably.

Many would see that as a middle-ground to quick transition. It won't happen in a year or two by any stretch,

Which was my point. (It will take time, and will be very gradual for at least a decade, maybe two [in my overly optimistic view on it]

short of Russia nuking Saudi.

Or China nuking both .

Some optimists think we can carry on till near 2100 without any worry. They are the minority, that's for sure.

But why not, after all, Oil is a renewable resource that... :lol: .

Also, I wasn't aware of the timing on the UK oil fields, would you mind providing a source on the North sea fields? I thought that they'd run for rather longer than 7 years .

Of course they've been around longer than that, they were opened by Maggie and are still used today. My point mentioned peak export and a return to net importing again.

Ah, time it went for the UK as a whole to go from exporter to importer. Thanks for the clarification and the info. What were the predictions for the time for how long it would take to go from export to import? (A method for checking self delusion on the time left on oil (By countries)).

A quick clarification, What will "not take decades" - The Economic decline effect? US growth going negative due to the impact? Private cars and electricity disappearing due to market forces? By law? Resource wars directly between the superpowers? etc'. (Sorry If I'm being a bit dense, its just that I tend to misread enough as is, so better safe than sorry ).

All of what you mentioned. The downward slope will not be anywhere near the upward and transition to a new way of life will neither be quick nor painless either, especially if it requires a whole new economic model and government.

True enough (Agreed).
I suppose my increased belief in the need for a benevolent dictator as I finish a year that focused on leadership skills and the need for (democratic) leadership would be worrying if not for my inability to grow a mustache .

Increasing demand and non growing and eventually diminishing Supply, you mean? (by "Above-ground"), or Political factors (Resource wars?).

Yes, and mainly the export-land model of hoarding, mercantilism and opportunist attacks on infrastructure.

Why do the last of those if you're not embarking on war anyway? To prevent the country in question from being able to use oil before an attack/in peace (You mean) ,

Things we see daily in Nigeria and Iraq, for example.

Forgive my crippling ignorance (yet again), but how do these work out in Nigeria? I was under the impression that it was merely a state of anarchy with oil in the hands of a few oligarchs as they reside in mansions and the poor ethnically cleanse each other. (I've let my reading up on Africa dwindle from infinitesimal to non-existent)

What's the difference between dealing with the problem and being affected by its consequences?.

Dealing with the problem assumes we can make a meaningful difference.

Such as emergency fuel taxes, Manahtten project level spending on improving the power infrastructure and a space needle for orbital solar platforms and improving Nuklear power generation technology, massively increasing the training of Nuke plant workers and the plants themselves, massively purchasing the elements needed for solar panels, plastics based heating (And forcing the use of these to a degree on all businesses and private houses, such as solar based water heaters as is the case, in, say Israel) and the like? .

[Admiral Valdemar]

But why not, after all, Oil is a renewable resource that... :lol: .

There are people that actually believe that, so you know. That should be a pretty big warning sign as to how some people think.

Why do the last of those if you're not embarking on war anyway? To prevent the country in question from being able to use oil before an attack/in peace (You mean) ,

More like to fuel growing internal demand thanks to a boosted economy. Iran, for instance, and their recently imposed gasoline rationing.

Forgive my crippling ignorance (yet again), but how do these work out in Nigeria? I was under the impression that it was merely a state of anarchy with oil in the hands of a few oligarchs as they reside in mansions and the poor ethnically cleanse each other. (I've let my reading up on Africa dwindle from infinitesimal to non-existent)

The groups like MEND are attacking rigs, pipelines and abducting people from camps and facilities dealing with the oil. You can't export oil if your industry is constantly under attack and people are calling for a withdrawal for private oil companies.

Such as emergency fuel taxes, Manahtten project level spending on improving the power infrastructure and a space needle for orbital solar platforms and improving Nuklear power generation technology, massively increasing the training of Nuke plant workers and the plants themselves, massively purchasing the elements needed for solar panels, plastics based heating (And forcing the use of these to a degree on all businesses and private houses, such as solar based water heaters as is the case, in, say Israel) and the like? .

Precisely.

[The Grim Squeaker]

But why not, after all, Oil is a renewable resource that... :lol: .

There are people that actually believe that, so you know.

Yeah, I've heard about the "Oil grows from rock" theories. (I'm not That naive about the stupidity of the proletariat, thank you very much )

That should be a pretty big warning sign as to how some people think.

Some people also think that the Universe is about 1e6 orders of magnitude younger than the oil they use.

Why do the last of those if you're not embarking on war anyway? To prevent the country in question from being able to use oil before an attack/in peace (You mean) ,

More like to fuel growing internal demand thanks to a boosted economy.

Er, how would that work?

Iran, for instance, and their recently imposed gasoline rationing.

Do you mean this as an example for the prior? (That is, the prior example meaning oil and energy rationing?).

Forgive my crippling ignorance (yet again), but how do these work out in Nigeria? I was under the impression that it was merely a state of anarchy with oil in the hands of a few oligarchs as they reside in mansions and the poor ethnically cleanse each other. (I've let my reading up on Africa dwindle from infinitesimal to non-existent)

The groups like MEND are attacking rigs, pipelines and abducting people from camps and facilities dealing with the oil. You can't export oil if your industry is constantly under attack and people are calling for a withdrawal for private oil companies.

Attacking infrastructure for war/weakening purposes, got it. (Thanks).

Such as emergency fuel taxes, Manahtten project level spending on improving the power infrastructure and a space needle for orbital solar platforms and improving Nuklear power generation technology, massively increasing the training of Nuke plant workers and the plants themselves, massively purchasing the elements needed for solar panels, plastics based heating (And forcing the use of these to a degree on all businesses and private houses, such as solar based water heaters as is the case, in, say Israel) and the like? .

Precisely.

Er, do you agree that such measures would make a difference or not? (If the political will or dictatorial powered leader existed to implement them of course)?

[Ace Pace]

Er, do you agree that such measures would make a difference or not? (If the political will or dictatorial powered leader existed to implement them of course)?

Even asumming dictatorial control, the time to have done these steps was before hand, however, implementing such steps could soften the blow of the end of cheap oil. Check some of Zeon's former posts on dictatorial control regarding peak oil.

[Admiral Valdemar]

Er, how would that work?

Well last I checked, the likes of KSA, Kuwait and Iran were quite rich and a booming economy means more people and more power per person as they get richer in real terms. In other words, their export power is causing their economy to overheat and require more energy in turn. Who are they going care about more in the future; their people or our people?

Do you mean this as an example for the prior? (That is, the prior example meaning oil and energy rationing?).

Yes, any act of rationing from an energy exporter is to be met with something bordering on cautious alarm.

Er, do you agree that such measures would make a difference or not? (If the political will or dictatorial powered leader existed to implement them of course)?

They'd make the power-down easier to deal with and less tragic, but they wouldn't make it easy as just switching to power saving light bulbs and saving up for a less fuel hungry car. People need to learn that conservation is the key, not somewhat better efficiency, which typically ends in higher consumption anyway.

[Sturmfalke]

Do you mean this as an example for the prior? (That is, the prior example meaning oil and energy rationing?).

Yes, any act of rationing from an energy exporter is to be met with something bordering on cautious alarm.

As the article states:

Iran's refineries have a capacity of 40 million liters of gasoline a day, but demand is close to 70 million liters.

In the case of Iran it is a lack of refining capacity that caused this step, which should not be that alarming.

What I don't understand is why they resort to rationing at all - if they cut the subsidies, the shrinking demand should solve the problem quite well.

[Admiral Valdemar]

Actually, the reason for that refinery shortfall is the alarming part. Why, if there is so much oil, are they not building more refinery capacity? This is true of the global market, not just Iran. Although there are rumours Iran will build a refinery in China. Why? Because they likely don't want the US hitting it if it does get built and the US decides to take the gloves off with Iran.

[SirNitram]

Well, AV, they're just shutting the damn things down in the US, and that's market manipulation. Don't underestimate greed.

As for why Iran has a shadow of a chance in Hell, and I emphasize how very small that chance is, is that it's economy is more diversified than any other in the Middle East. This is the soft bigotry of low expectations in a way, but it's something. Compared with, say, Saud, which will simply implode into it's tribal collections and the Royal family ending up shot to peices, and it's a preferrable way to go.

And unless the innovation buys time on the clock(Some new breakthrough that extends the 'lifeline' time of oil shale, for example) after people realize what's happening, the innovation won't help. We could handle the crisis if we started now, but the momentum is against the changes needed.

[PeZook]

And unless the innovation buys time on the clock(Some new breakthrough that extends the 'lifeline' time of oil shale, for example) after people realize what's happening, the innovation won't help. We could handle the crisis if we started now, but the momentum is against the changes needed.

Which is why I think (and man, people are gonna hate me for saying that) that we need a real war in the Middle East that will drive oil prices through the roof. If the crisis starts now, people will start cutting back on their oil consumption. It's not that hard to reduce consumption and extend what we have left for an additional 10 years or so. Also, alternative energy (and energyless solutions, like building insulation) will be getting a shitload more attention if people have to fork over half their salary on fuel.

In a way, European countries made a really smart decision to tax their gasoline heavily. By forcing people to pay and equivalent of 5 bucks a gallon, we reduced demand a lot, and the whole of EU collectively uses less fuel than the US, despite having a larger population.

[SirNitram]

That presumes that OPEC would raise prices following normal economic theory. That's the whole blindspot of PO: It relies on economic theory being right on a commodity managed by an effective monopoly. If OPEC is as clever as they seem to be, they'll resist raising the price much further as long as they can, because doing so brings in the temptation to finally ween off the oil teat.

[PeZook]

That presumes that OPEC would raise prices following normal economic theory. That's the whole blindspot of PO: It relies on economic theory being right on a commodity managed by an effective monopoly. If OPEC is as clever as they seem to be, they'll resist raising the price much further as long as they can, because doing so brings in the temptation to finally ween off the oil teat.

That's why we need a big war. So that refineries get blown up, tankers get sunk and oil wells get disrupted. Sometimes, massive bloodshed seems to be the only things that can make people notice things.

[Admiral Valdemar]

OPEC is refusing to boost output now, despite Brent going for $71 today, about four dollars over the price this time last year. This Autumn and winter, we will see whether they can really boost output from the KSA and likes of Kuwait, or whether it's all bullshit and we get another excuse to throw off those ready to announce OPEC has peaked.

[J]

OPEC is refusing to boost output now, despite Brent going for $71 today, about four dollars over the price this time last year. This Autumn and winter, we will see whether they can really boost output from the KSA and likes of Kuwait, or whether it's all bullshit and we get another excuse to throw off those ready to announce OPEC has peaked.

What I find even more concerning is that key OPEC producers have flat out said that they cannot meet their contracted shipments to Asia, and there will in fact be shortfalls in the shipments. I'll see if I can track down a source for this, it's popped up a few times on the Bloomberg energy page in the past little while.

[Admiral Valdemar]

Makes for fun reading.

I guess the US and EU pay top dollar, at least until China really starts using that surplus.

[The Duchess of Zeon]

Maybe we should give Shep a bombed up B-70 and a map of Saudi Arabia. They're all going to stave to death when they run out of oil to sell, anyway.

[Admiral Valdemar]

They'll move out into tents in the desert and lob each other's heads off, like they did 100 years ago. Until then, we accept their generous gifts of prehistoric time condensed into black gold.

[The Duchess of Zeon]

They'll move out into tents in the desert and lob each other's heads off, like they did 100 years ago. Until then, we accept their generous gifts of prehistoric time condensed into black gold.

Hah, the desert of Saudi Arabia cannot support 24 million people, AV. They will be lucky if it supports six million when this is done. The other 18 million are going to die, or immigrate elsewhere. In no place in the world is the population more drastically in excess of what the local area can support than in the mid-east. I'm very confident in saying that 100 million people will die in the Arab world alone as a result of peak oil, let alone climate change. We should get another 250 million in Sub-Saharan Africa or so and 100 million each in the Subcontinent and China, maybe another 100 million in Southeast Asia (Indonesia is a total collapse waiting to happen). Should be able to get another 50 mils in Latin America, 5 mils each in the USA and the rest of East Asia, and 10 mils in all of Europe, Russia, the Transcaucasus, and Central Asia. Say about another 10 mils in Iran and Afghanistan, which don't really fit into any of the above. 630 million isn't a bad die-off, about 9.6% of the current world population. That should provide a nice check to population growth for a while.

[Admiral Valdemar]

That's why there will be a LOT of beheading this time. They've got good practice lately.

[The Duchess of Zeon]

That's why there will be a LOT of beheading this time. They've got good practice lately.

Point taken. Do you figure we'll get a nice full 700 mils dead out of this business, or shall a low-range figure closer to 600 mils prevail?

[Adrian Laguna]

I'm very confident in saying that 100 million people will die in the Arab world alone as a result of peak oil, let alone climate change. We should get another 250 million in Sub-Saharan Africa or so and 100 million each in the Subcontinent and China, maybe another 100 million in Southeast Asia (Indonesia is a total collapse waiting to happen). Should be able to get another 50 mils in Latin America, 5 mils each in the USA and the rest of East Asia, and 10 mils in all of Europe, Russia, the Transcaucasus, and Central Asia. Say about another 10 mils in Iran and Afghanistan, which don't really fit into any of the above. 630 million isn't a bad die-off, about 9.6% of the current world population. That should provide a nice check to population growth for a while.

I'm not sure how you just managed to say very confidently that 1 out of 10 people will be pushing-up daisies (or just rotting on the ground) somehow still sound cautiously optimistic.

[Admiral Valdemar]

Point taken. Do you figure we'll get a nice full 700 mils dead out of this business, or shall a low-range figure closer to 600 mils prevail?

I'm tempted to say higher, if we run the plan into the ground. Being human, we kind of have a good precedent for that.

I'm not sure how you just managed to say very confidently that 1 out of 10 people will be pushing-up daisies (or just rotting on the ground) somehow still sound cautiously optimistic.

She is... the Duchess.

[rhoenix]

I'm not sure how you just managed to say very confidently that 1 out of 10 people will be pushing-up daisies (or just rotting on the ground) somehow still sound cautiously optimistic.

Because of:

Hah, the desert of Saudi Arabia cannot support 24 million people, AV. They will be lucky if it supports six million when this is done. The other 18 million are going to die, or immigrate elsewhere. In no place in the world is the population more drastically in excess of what the local area can support than in the mid-east.

That's likely why.

[The Duchess of Zeon]

Point taken. Do you figure we'll get a nice full 700 mils dead out of this business, or shall a low-range figure closer to 600 mils prevail?

I'm tempted to say higher, if we run the plan into the ground. Being human, we kind of have a good precedent for that.

I'm not sure how you just managed to say very confidently that 1 out of 10 people will be pushing-up daisies (or just rotting on the ground) somehow still sound cautiously optimistic.

She is... the Duchess.

I'm optimistic because I'm highly confident that industrial society and therefore modern civilization will survive, and continue to prosper after it has recovered. Just like I'd throw away millions of lives in vast WW1-style human wave assaults to save my country, I'd throw away hundreds of millions of lives to save modern civilization. In the REAL world, rather than the one we've been living in for the past 60 years, life is dirt-fucking-cheap. Humans can always have more babies. The long term survival of our species, however, is something that requires us break free of the resource crunch of living on one planet, and that means we must have industrial, technological civilizations which are capable of colonizing the solar system. If we have to sacrifice large portions of the human race to guarantee that we gain access to extra-planetary resources, it's a fair deal, as it means that billions or even trillions of humans will live comfortable lives who otherwise would have never even existed.

A grim technocrat friend of mine from Hong Kong has a quote which pretty much sums up my attitude as well as his: "The truly benevolent will not desist at small evils. This is the compassion of the Enlightened."

Welcome to the future.

[Admiral Valdemar]

You didn't drink Kool Aid as a little girl, did you, Marina?