German Military Braces For Peak Oil

[GrandMasterTerwynn]

If the amount you spend on oil increases from 1-2%, you simply cut back on luxuries. In the US case, probably on cars with enormous engines, with little loss in functionality at all. Catastrophic adjustment only occurs if the price increase as a % of total spending is really huge and unexpected, but it simply isn't.

Yeah . . . you're a fucking idiot, aren't you? Declining oil production coupled with steady or increasing demand only results in gradual price rises if you look at it in timescales no shorter than decades. The last time we had modest declines in oil production, they were greeted with huge price spikes. Post Peak Oil's most undesirable side-effect isn't so much the ever spiraling cost of oil as it is the extreme price volatility that the declines in output will produce.

The oil market anticipates price rises, which are gradual, since the depletion of oil is a continuous process and not one that occurs in huge jumps. The oil price already more than doubled in real terms since before the 70s crisis: have you personally noticed a difference to your life?

Yes. In 1999, a 50 mile daily commute only cost me $1.81. In 2009, that same commute cost me $5.09. I could fit a whole meal into the space between those two numbers . . . only that meal in 2009 is filled with more empty calories, sodium, saturated fats, and assorted chemicals than the one in 1999, thanks to the rises in food prices that came about as a result in rises in the price of oil. I can afford it because I'm squarely middle class. For someone barely coasting above minimum wage, the extra money they have to spend to make up for the increased cost of oil would, every week, pay for most of a week of groceries; or half of a month's utility bill of their choice.

When gasoline prices in the US were at their worst, that same 50 mile commute would've cost me $7.41 and over. To whit, that's sixteen cents over the Federal minimum wage.

And it has increased about 5x this decade before crashing with the banking crisis: did you notice that? In fact, at the 2000 spot price, even with the small economy, oil would be less than 1% of world GDP. Even if oil disappeared in the next 2 years I don't see how we would get world-destroying consequences, when biofuel already is competitive with the pre-crash oil price.

Do you ever tire of showing off how much of an idiot you are? Because you are really a fucking idiot. Compare the numbers. Seventy-five million gallons of biodiesel produced per year, compared to forty billion gallons of dead dinosaur-diesel consumed. Four billion gallons of ethanol produced (consuming 13% of the American corn crop,) compared to 140 billion gallons of dead-dinosaur gasoline. Do you realize just how dramatically we'll have to expand biofuel production to make up for the loss of oil in transportation alone? If oil disappeared in the next two years, it'd be the end of fucking civilization. As it is, falling off the other end of the oil production curve will be bad enough. And, as has been said, biofuel production competes directly with food production.

As far as I've been able to tell reading their websites and publications, the peak oil doom-monger case is based on the assumption that there is no possible replacement for oil and that almost everything is dependent on it. Neither of these are true. Oil is just the most convenient feedstock for a range of things at present.

There really isn't a replacement for oil. You have a basket of things that come close to replacing oil, at much greater cost, but there really isn't anything that matches oil. And in the areas where we have technologies that match and exceed oil . . . we don't have enough of those built to take over in a timeframe that would insulate the average consumer from the price instability that will come from declining oil production without the accompanying destruction in oil demand (yes, that demand destruction will occur, but it will lag behind the decline in production. The implications of that are why one ought to be at least modestly concerned about how the hand-off between a petrochemical-based economy and a non-petrochemical-based economy will take place.)

[Surlethe]

The last time we had modest declines in oil production, they were greeted with huge price spikes. Post Peak Oil's most undesirable side-effect isn't so much the ever spiraling cost of oil as it is the extreme price volatility that the declines in output will produce.

To be fair, those supply declines were unanticipated. Expecting supply declines permits intertemporal risk distribution, which will help (not much) mitigate the price volatility and demand effects of those declines.

And in the areas where we have technologies that match and exceed oil . . . we don't have enough of those built to take over in a timeframe that would insulate the average consumer from the price instability that will come from declining oil production without the accompanying destruction in oil demand (yes, that demand destruction will occur, but it will lag behind the decline in production. The implications of that are why one ought to be at least modestly concerned about how the hand-off between a petrochemical-based economy and a non-petrochemical-based economy will take place.)

In econ-speak: all of that consumption will go into investment that replaces existing capital. The effect of declining oil supplies on the economy can be thought of as greatly accelerated capital depreciation because lots of capital simply won't be cost-effective as prices rise. So instead of increasing the capital stock, the economy will have to shift from some kinds of capital to other kinds. This is why 'demand destruction' will occur --- present consumption will be greatly deferred in order to rebuild the capital stock, resulting in a decline in the standard of living.