Guest Post: Peak Denial About Peak Oil

Tyler Durden's picture

Submitted by Jim Quinn of The Burning Platform

Peak Denial About Peak Oil

It is par for the course that with oil hovering between $70 and $80
per barrel Americans have continued to buy SUVs and Trucks at a rapid
pace. Politicians don’t have constituents screaming at them because gas
is $4.00 per gallon, so it is no longer an issue for them. They need to
focus on the November elections. It is no time to discuss a difficult
issue that requires foresight and honesty. It is no time to tell the
American public that oil will be over $200 a barrel within the next 5
years. Anyone who would go on CNBC today and declare that oil will be
over $200 a barrel would be eviscerated by bubble head Bartiromo or
clueless Kudlow. Bartiromo filled up her Escalade this morning for $2.60
a gallon, so there is no looming crisis on the horizon. The myopic view
of the world by politicians, the mainstream media and the American
public in general is breathtaking to behold. Despite the facts slapping
them across the face, Americans believe cheap oil is here to stay. It is
their right to have an endless supply of cheap oil. The American way of
life has been granted by God. We are the chosen people.

A funny thing happened on our way to permanent prosperity and
unlimited cheap oil. The right to prosperity was yanked out from
underneath us by the current Greater Depression. The worldwide economic
downturn has masked the onset of peak cheap oil. Therefore, when it hits
America with its full fury, it will be a complete surprise to the
ignorant masses and the ignorant politicians who run this country. A
Gallup Poll in August asked Americans about our most important problems.
Where is the concern about future energy supplies? It isn’t on the
radar screens of Americans. They are probably more worried about whether
The Situation will hook up with Snookie on the Jersey Shore reality
show.

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It is not surprising that the American public, American politicians,
and the American media don’t see the impending crisis. The organizations
that have an interest in looking farther than next week into the future
have all concluded that the downside of peak oil will cause chaos
throughout the world. The US Military, the German Military, and the UK
Department of Energy have all done detailed studies of the situation and
come to the same conclusions. Social chaos, economic confusion, trade
barriers, conflict, food shortages, riots, and war are in our future.

http://www.acus.org/docs/051007-Hirsch_World_Oil_Production.pdf

The U.S. was warned in 2005. Its own Department of Energy
commissioned a report by Robert Hirsch to examine peak oil and its
potential consequences to the US. The introduction stated:

“The peaking of world oil production
presents the U.S. and the world with an unprecedented risk management
problem. As peaking is approached, liquid fuel prices and price
volatility will increase dramatically, and, without timely mitigation,
the economic, social, and political costs will be unprecedented. Viable
mitigation options exist on both the supply and demand sides, but to
have substantial impact, they must be initiated more than a decade in
advance of peaking.”

The main conclusions reached by the experts who worked on this report were:

  1. World oil peaking is going to happen, and will likely be abrupt.
    World production of conventional oil will reach a maximum and decline
    thereafter.
  2. Oil peaking will adversely affect global economies, particularly the
    U.S. Over the past century the U.S. economy has been shaped by the
    availability of low-cost oil. The economic loss to the United States
    could be measured on a trillion-dollar scale. Aggressive fuel efficiency
    and substitute fuel production could provide substantial mitigation.
  3. The problem is liquid fuels for transportation. The lifetimes of
    transportation equipment are measured in decades. Rapid changeover in
    transportation equipment is inherently impossible. Motor vehicles,
    aircraft, trains, and ships have no ready alternative to liquid fuels.
  4. Mitigation efforts will require substantial time. Waiting until
    production peaks would leave the world with a liquid fuel deficit for 20
    years. Initiating a crash program 10 years before peaking leaves a
    liquid fuels shortfall of a decade. Initiating a crash program 20 years
    before peaking could avoid a world liquid fuels shortfall.
  5. It is a matter of risk management. The peaking of world oil
    production is a classic risk management problem. Mitigation efforts
    earlier than required may be premature, if peaking is long delayed. On
    the other hand, if peaking is soon, failure to initiate mitigation could
    be extremely damaging.
  6. Economic upheaval is not inevitable. Without mitigation, the peaking
    of world oil production will cause major economic upheaval. Given
    enough lead-time, the problems are soluble with existing technologies.
    New technologies will help, but on a longer time scale.

The Hirsch Report clearly laid out the problem. It urged immediate
action on multiple fronts. It is now 5 years later and absolutely
nothing has been done. In the meantime, it has become abundantly clear
that worldwide oil production peaked between 2005 and 2010. The Hirsch
Report concluded we needed to begin preparing 20 years before peak oil
in order to avoid chaos. We are now faced with the worst case scenario.

http://www.fas.org/man/eprint/joe2010.pdf

The US Military issued a Joint Operating Environment report earlier
this year. They have no political motivation to sugarcoat or present a
dire picture. This passage is particularly disturbing:

A severe energy crunch is inevitable
without a massive expansion of production and refining capacity. While
it is difficult to predict precisely what economic, political, and
strategic effects such a shortfall might produce, it surely would reduce
the prospects for growth in both the developing and developed worlds.
Such an economic slowdown would exacerbate other unresolved tensions,
push fragile and failing states further down the path toward collapse,
and perhaps have serious economic impact on both China and India. At
best, it would lead to periods of harsh economic adjustment. To what
extent conservation measures, investments in alternative energy
production, and efforts to expand petroleum production from tar sands
and shale would mitigate such a period of adjustment is difficult to
predict. One should not forget that the Great Depression spawned a
number of totalitarian regimes that sought economic prosperity for their
nations by ruthless conquest.

Here is the summary of their analysis:

To generate the energy required worldwide by the 2030s would require us to find an additional 1.4 MBD every year until then.

During
the next twenty-five years, coal, oil, and natural gas will remain
indispensable to meet energy requirements. The discovery rate for new
petroleum and gas fields over the past two decades (with the possible
exception of Brazil) provides little reason for optimism that future
efforts will find major new fields.

At
present, investment in oil production is only beginning to pick up,
with the result that production could reach a prolonged plateau. By
2030, the world will require production of 118 MBD, but energy producers
may only be producing 100 MBD unless there are major changes in current
investment and drilling capacity.

By
2012, surplus oil production capacity could entirely disappear, and as
early as 2015, the shortfall in output could reach nearly 10 MBD.

Energy
production and distribution infrastructure must see significant new
investment if energy demand is to be satisfied at a cost compatible with
economic growth and prosperity. Efficient hybrid, electric, and
flex-fuel vehicles will likely dominate light-duty vehicle sales by 2035
and much of the growth in gasoline demand may be met through increases
in biofuels production. Renewed interest in nuclear power and green
energy sources such as solar power, wind, or geothermal may blunt rising
prices for fossil fuels should business interest become actual
investment. However, capital costs in some power-generation and
distribution sectors are also rising, reflecting global demand for
alternative energy sources and hindering their ability to compete
effectively with relatively cheap fossil fuels. Fossil fuels will very
likely remain the predominant energy source going forward.

Just this week, the German magazine Der Spiegel obtained a
confidential study about peak oil that was done by the German military.
According to the German report, there is “some probability that peak oil
will occur around the year 2010 and that the impact on security is
expected to be felt 15 to 30 years later.” The major conclusions of the
study as detailed in Der Spiegel are as follows:

  1. Oil will determine power: The Bundeswehr
    Transformation Center writes that oil will become one decisive factor in
    determining the new landscape of international relations: “The relative
    importance of the oil-producing nations in the international system is
    growing. These nations are using the advantages resulting from this to
    expand the scope of their domestic and foreign policies and establish
    themselves as a new or resurgent regional, or in some cases even global
    leading powers.”
  2. Increasing importance of oil exporters: For
    importers of oil more competition for resources will mean an increase in
    the number of nations competing for favor with oil-producing nations.
    For the latter this opens up a window of opportunity which can be used
    to implement political, economic or ideological aims. As this window of
    time will only be open for a limited period, “this could result in a
    more aggressive assertion of national interests on the part of the
    oil-producing nations.”
  3. Politics in place of the market: The Bundeswehr
    Transformation Center expects that a supply crisis would roll back the
    liberalization of the energy market. “The proportion of oil traded on
    the global, freely accessible oil market will diminish as more oil is
    traded through bi-national contracts,” the study states. In the long
    run, the study goes on, the global oil market, will only be able to
    follow the laws of the free market in a restricted way. “Bilateral,
    conditioned supply agreements and privileged partnerships, such as those
    seen prior to the oil crises of the 1970s, will once again come to the
    fore.”
  4. Market failures: The authors paint a bleak picture
    of the consequences resulting from a shortage of petroleum. As the
    transportation of goods depends on crude oil, international trade could
    be subject to colossal tax hikes. “Shortages in the supply of vital
    goods could arise” as a result, for example in food supplies. Oil is
    used directly or indirectly in the production of 95 percent of all
    industrial goods. Price shocks could therefore be seen in almost any
    industry and throughout all stages of the industrial supply chain. “In the medium term the global economic system and every market-oriented national economy would collapse.”
  5. Relapse into planned economy: Since virtually all
    economic sectors rely heavily on oil, peak oil could lead to a “partial
    or complete failure of markets,” says the study. “A conceivable
    alternative would be government rationing and the allocation of
    important goods or the setting of production schedules and other
    short-term coercive measures to replace market-based mechanisms in times
    of crisis.”
  6. Global chain reaction: “A restructuring of oil
    supplies will not be equally possible in all regions before the onset of
    peak oil,” says the study. “It is likely that a large number of states
    will not be in a position to make the necessary investments in time,” or
    with “sufficient magnitude.” If there were economic crashes in some
    regions of the world, Germany could be affected. Germany would not
    escape the crises of other countries, because it’s so tightly integrated
    into the global economy.
  7. Crisis of political legitimacy: The Bundeswehr
    study also raises fears for the survival of democracy itself. Parts of
    the population could perceive the upheaval triggered by peak oil “as a
    general systemic crisis.” This would create “room for ideological and
    extremist alternatives to existing forms of government.” Fragmentation
    of the affected population is likely and could “in extreme cases lead to
    open conflict.”

Even the International Energy Agency, which has always painted a rosy
picture of the future, has even been warning about future shortages due
to lack of investment and planning.

http://www.worldenergyoutlook.org/docs/weo2009/WEO2009_es_english.pdf

Americans think that the discovery of oil on our soil in 1859 has
entitled us to an endless supply. It is not so. We account for 4.3% of
the world’s population but consume 26% of the world’s oil. As China,
India and the rest of the developing world become economic powerhouses,
they will consume more and more of the dwindling supply of easily
accessible oil. As the consumption curve continues upwards, the
production curve will be flat. The result will be huge spikes in prices.
It will not be a straight line, but prices will become progressively
higher. As the studies referenced above have concluded, the result will
be economic pain, social chaos, supply wars, food shortages, and a
drastic reduction in lifestyles of Americans. They won’t see it coming,
just like they didn’t see the housing collapse coming or the financial
system collapse coming. They’ll just keep filling up those Escalades
until the pump runs dry.

 

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Cookie's picture

peak silver just arrived 5 minutes ago!

johnnynaps's picture

I guess everyone believes that they can fill their gas tanks with silver!

Blindweb's picture

Because our ever expanding debt based fiat systems will certainly survive peak oil and planetary limits

Millennial's picture

I passed maf in the detroit publik skewl sistem. My baby's mommy who is also my teacher told me I could whatever I wanted. So I went to community college and got ym associates degree in maf. I can say with black power that our fiat system will work forever. 

Mad Max's picture

I nominate "Millennial" for next Secretary of the Treasury.

Millennial's picture

As treasury secretary. I will do the following in my first day of office:

 

http://www.youtube.com/watch?v=rW6M8D41ZWU

septicshock's picture

What? Are you bored?

Peak oil is real, it's happening. This is the underlying cause for the current problems.

trav7777's picture

ALL Peak Oil denier idiots MUST WATCH:

http://www.youtube.com/watch?v=F-QA2rkpBSY

Watch the fucking series.  Bow down.

Citxmech's picture

That's the one!  The important take-home messages regarding percentages, exponential growth, and their impact on finite resource allocation distilled into simple terms.  Awesome stuff.

Fun for whole family - even the non-sciencey types.

+1.

 

 

Francis Dollarhyde's picture

A must watch for everyone, regardless of their opinion on peak oil.

fuu's picture

Are you calling a top?

 

Also that was a pretty determined move out of no where. Did someone just blow up?

hungrydweller's picture

I've been a peak oil denier since the '70s when the bogus theory was first spewed out the pie holes of idiots who do not grasp how oil is produced in the earth's crust or understand the ability of technology to make it easier to find and extract.  We have a long way to go until peak oil arrives.

Vergeltung's picture

exactly. what junk science.

trav7777's picture

You were a peak oil denier in the 1970s after the United States' oil production peaked for all time?

Talk about a fucking idiot...wow.

Go google me our production figures in 1970 and now, after all this technology made it easier to find and extract.

hungrydweller's picture

Your avatar lends to your credibility.  Technology and the thirst for profit will render peak oil meaningless.

Mad Max's picture

Ah yes, technology will save us.

Not long from now, the period through 2010 or so will be viewed as the age of the religion of technology and "free" (ha, ha) markets.

1100-TACTICAL-12's picture

Oil is produced abiotic by the earth's moving crust. THERE WERE NO DINOSAURS living 20,000 ft. down under 5,000 ft. of ocean. Peak oil is a scam to keep the slaves broke & distracted.

trav7777's picture

I'm sorry, you are simply too stupid for me to be able to help you

Frank Owen's picture

Hubbert's peak oil theory has long been scientifically proven.

Abiotic oil is a hypothesis that has never been proven.

That no dinosaurs thing - you know about Pangaea (one super-continent about 250million years ago)?? tectonic plates? the earth constantly moving/shifting?

If the continents have moved that far apart in 250 million years and the planet is something like 4.5 billion years old do you not think that something located on land could not end up being 20,000 ft below the surface?

The World's Deepest Dinosaur Finding -- 2256 Metres Below The Seabed:

http://www.sciencedaily.com/releases/2006/04/060425091449.htm

We're going through enough oil that if it was in physical barrels laid end to end it would be able to wrap around the world (over the continents and oceans) 3 times EVERY DAY!

Biotic oil is a scam to keep the sheep calm.

"The abiotic hypothesis remains just that, an hypothesis which has failed in prediction and so cannot be elevated to a theory. It is completely ignored by the oil industry worldwide, and even within Russia. And that is the final testament to its failure.

kathy.chamberlin@gmail.com's picture

you tell it like it is frank_O

everything is liquid, fluid. right, good theory?

Patrick Bateman's picture

Fuckin A Frank. I suggest to any and all peak oil "deniers" to do yourself a favor. Read a book called "Crossing The Rubicon" and after you have read and doubted it, look into it's source information and you will find out it is spot on. Furthermore, check out Chris Martensons "Crash Course". It really doesn't matter though, the economy is going to crash by 2015 so fuck it.

Rusty Shorts's picture

Technology is the rope we hung ourselves with, oil companies do not produce dick, oil companies pump oil from the earth and destroy it, - and;

 

All the king's horses and all the king's men

Couldn't put Humpty together again

 

 

wake the roach's picture

Technology is the rope we hung ourselves with

Rusty, technology is not the enemy. It is what will save us if we choose to allow it. And no, I'm not saying that developing technology that allows us to extract more oil is the answer (or even possible?).

The paradox of energy efficiency (jevons paradox), the more energy efficient technology (capital) becomes the greater the energy it allows us to consume and on a planet of finite resources, extracting resources at increasing rates via increasing net energy gains is suicide. (think todays consumerism/waste times two)

Capitalism as a means to allocate scarce energy via profit is over. End of story. Its fun to watch the free market fall apart here on ZH but anyone who believes we are going back to capitalism 2.0 is a fool and if we ever do see a reset, I honestly fear for mankinds survival beyond this century. This is a one shot deal, if we miss the boat its lights out.

Increasing net energy gains through efficient technology (capital) is dislocating the very species it serves (labor, you and me) from access to its wealth (a fucking job). Today, the world is overflowing with capital and labor that have no means to ever reconnect within a profit system. Monetary profit (individual energy surplus) is dependent upon compound growth/energy consumption. Not possible. And who is going to purchase all our shit when the consumer does not have an income, Jesus, aliens? Debt may have gotten us here sooner but it was inevitable. In fact, I would argue that capitalism would have imploded in the late 70s early 80s. It was wage arbitrage, cheap disposable products, credit cards, NINJA loans, ZIRP, Treasury bonds that only allowed it to continue long enough to build a basic world governance and communication structure through "evil WTO freetrade agreements" before the shithouse went up in flames. I believe the biggest single efficiency factor came about through modern agriculture which made the vast majority of essential human labor (food energy production) obsolete. Look at the great effect more free time and energy had (and does have) on our lifestyles in the western world.From primative man with with basic torque multiplying hand tools/weapons. Agriculture with its food energy surplus that gave birth to money (representing a share of the energy surplus) and freed more labor from the land to produce goods/services. Right up to this point where todays advanced technologies and its greater net energy has turned against us due to the requirement for exponential growth. We live in a global world, we have tapped growth and thus our means to profit out.

I'll just go ahead and say it, Marx was right. No one here on ZH can understand what is happening today without a a complete understanding of the greatest economic text ever written, Das Kapital.

And please, if you read this tmosley, don't start at me with any socialism is evil fucking bullshit you ignorant idealist mother fucker.

Marx's only fault is that he could not see to take his labor theory of value to its purest form.Net Energy.

Labor is work performed by humans (food energy that allows sufficient energy surplus to perform work)

Capital is obviously technology that produces greater efficiency/net energy gains (name your energy source) making labor obsolete and thus, access for labor to even a basic energy income sufficient for survival.

Now let me get back to my initial point.

LABOR AND CAPITAL ARE NOT IN CONFLICT.

In other words, technology is not the enemy until we add profit to the mix which forces competition for scarce energy, forcing technological innovation that eventually displace the "labor commodity".

Eg, In a capitalist utopia (what marx refered to as  communism), the efficiencies capital produces frees humans from almost all labor because profit has been abolished. The great net energy surplus (you can think of it as money)capitalism created out of free market competition is shared.

This is where we are today, not in a recession or even the greatest depression. We are at a turning point more dangerous but potentialy liberating than mankind will ever know. The transition period away from profit or  slow die off.

We have the global information technology to make this possible TODAY! This is the real new world order. Only question is, what will it take to bring about this new age of unmimited human potential.My bet is a complete economic collapse. Hmmmm.

Greenspan, Bernanke, Obama they are not failing. They either understand that the end justifys the means or they are just unknowingly playing there role in the great stage of life. The future is equal energy income (rations/credits, call it what you like like oneday no need for rationed energy at all) and the abolition of profit and thus, 90% of todays useless employment and an end to poverty, war, racism etc. Thats the plan, just gotta hope the good outnumber the quran burning nationalistic morons (now with extra ammunition).

Marx was not perfect, how could he forsee todays advanced information technology. He would be laughing his ass off if he ever got to realise that the revolution itself was instigated top down by the elite bourgeoisie and not bottom up from the proletariat. Once again the freedom loving nation of the USA must accept the burden of power. As leader of the free world, gaining control over the largest energy taps that will make the transition possible is absolutely vital. 

Yes I realise how crazy this may sound (yoink ;-) but think of it this way. In within my lifetime (26yo) computer and electronics technology will be so small, so cheap and so powerful that they are in every product, every building etc and even inside us. We will have the possibility to virtually teleport ourselves anywhere in the world where sensors exist. No actual energy(matter) will move through space but only the information (I hate long flights too). You will not be able to tell the difference because there will be no real difference. That sounds crazy but plausible right, I believe it for whatever thats worth. So does anyone think monetary wealth, ferraris, gucci, 20 different brands of tv's yada yada yada has any real role in such a possible future? Does anyone want another four generations fighting resource wars to protect a life where most young men prefer to masturbate to internet porn than have sex with their girlfriends!!! 

But on the other hand, mad max looked like fun too, I wanna be the dude who flys the gyrocopter ;-)

snowball777's picture

I appreciate your ability to think in the large, your roachness.

http://www.youtube.com/watch?v=uCEeAn6_QJo

Try and read between the lines...

wake the roach's picture

Mom is gonna fix it soon haha... Never really listened to much Tool before but I'm impressed...

Here's an electro retro song I recently heard on the radio that I found kinda interesting, revolution is going pop...

 http://www.youtube.com/watch?v=PzE5dS6fnFk

Hulk's picture

Impressive writing, yet so.....delusional. All IT does is multiple non productive work by a zillion. No technological save for this crisis..(at this late date, had we started 30 or 40 years ago...)

wake the roach's picture

All IT does is multiple non productive work by a zillion

 

haha well, that depends on your definition of "productive work"... I won't bother subjecting you to another delusional rant but I will recommend you study the history of the printing press, telegram, photography, film, radio, television and hell, the arts in general... I wonder what Joseph Goebbels would have to say about your comment? How you underestimate the power of a globally connected media centre in the hand of every citizen leaves me just a little bit disappointed with your lack of vision :-( 

http://www.youtube.com/watch?v=ObKpwmZkl24

Great film...

 

 

Rusty Shorts's picture

- is that you Obama?

 

Get used to living locally, and I really do not appreciate those big words you're throwing around.

http://www.youtube.com/watch?v=BpAxV6uUxsM

wake the roach's picture

haha...

Yes, local living will play an important role in the transition period (I moved back to the country for this reason last year)... But the long term future still lies in cities, themeselves broken into local communities (no different from today), centred around shared community infrastructure and run by the communitys voluntarily (most people will have plenty of spare time to offer)  ... Agricultural and natural regions will become home to more scientists than laborers... My two cents anyway...

These fella's tend to agree...

http://en.wikipedia.org/wiki/Agenda_21

When we do get over our irrational fears (for many by force) of socialism and its shared wealth even Detroit ghetto's will have a new lease on life... Once the masses of unemployed no longer have to compete for a basic living you will be amazed at how community involved people will voluntarily become and how rich our lives will be... We all have our roots in primative communism and it is our future...

http://www.youtube.com/watch?v=u6XAPnuFjJc

 

 

trav7777's picture

Yes, just like it did in the USA in the 1970s.

Your arrogance is exceeded only by your stupidity...

Pladizow's picture

I CANNOT BELIEVE THAT ON ASITE LIKE ZH,

WITH AN ARTICLE WITH CLOSE TO 200 POSTS NO ONE HAS MENTIONED THE MOVIE COLLAPSE WITH MICHAEL RUPERT.

NOMINATED FOR DOCUMENTARY OF THE YEAR.

All should Watch: http://www.disclose.tv/action/viewvideo/50078/Collapse__part_1_/

Conrad Murray's picture

Thanks for the link. 

On a somewhat similar note...Tyler, what are the chances of seeing some of Gregor Macdonald's work here?  He digs down into energy issues in a solid, entertaining way.  He would make a great addition if at all possible.

DaveyJones's picture

alotta people don't want to touch Ruppert because of his 911 work but he did some good work in both areas, areas you can't disconnect.  

THE 4th Quadrant's picture

Crossing The Rubicon was one of the most solid pieces of investigative work that I have read.

Why do you say a lot of people want ignore him because of this?

http://www.amazon.com/Crossing-Rubicon-Decline-American-Empire/dp/086571...

DaveyJones's picture

Cause 911 truth scares people like molestation in the family most turn away and deny

DavidPierre's picture

Jim Quinn... The "MORON"... is in PEAK DENIAL of the False Flag 9/11 operation and it's direct connection to "PEAK OIL".

His blog www.thestinkingshitpile.com is denial central.

Go on over to his blog and post anything about 9/11 Truth and get ready for his obscene responses under his various AKAs.

He censures, deletes and blocks IPs.

Yeah... 'Mr.Free Speech'!

mitack's picture

Thanks TD, great work !

The "Got Milk ?" graph rulz !

While I agree with peak oil, the Ruper documentary

was a big disappointment- the guy puts so much

emotion in it, its hard to take it seriosly- kind of

like when women cry...

 

Citxmech's picture

No Sh*t!  I just looked at the Ag chart and I was like:  "Damn! - We're within spitting distance of $20 - it had a $17 on the front two weeks ago..."

The next spike in oil is going to be deadly to our shambles of an economy.  If we have a bad winter, there could be trouble.

steve from virginia's picture

Current assumptions about (persistent) high energy prices at levels much above current are incorrect.

Oil prices much above $20 a barrel are destructive to the current economy which is built around the waste of cheap oil and other inputs. That is, much of what we consider necessary goods were invented specifically to waste fuel that would otherwise have little or no productive use. 'Fun' is not a productive use.

The persistent high price concept suggests that wage- and business earnings will continue as previous, when in fact wage and business earnings (outside the ambit of the Fed and government subsidy) are instead declining.

Oil does not get more expensive, the people who buy it instead get poorer.

Wage- and business earning declines force oil prices lower. Oil that is declining in price is still too expensive if earnings used to buy it decline faster. The greatest growth industry in the US currently is 'poverty'.

At some point the price of oil falls too low to support replacement production. The world's economies are at this point now. What supports waste is the balance of (depleting) cheap oil reserves. As prices decline two things happen:

 - priced in oil the cash dollar becomes valuable and is hoarded.

 - Declines in production combine with declining net exports (from producing countries) and the shutting in of expensive- to- produce oil to cause shortages. Because the commercial economy is unable to fund replacement supplies due to cost the shortages are permanent.

We are more likely to see $15 oil and 15 cent a gallon gas with few cars and very high unemployment ... than to see an inflationary spiral with high nominal wages (able to afford high gas prices).

http://economic-undertow.blogspot.com/2010/08/give-us-free-money.html

 

Dr. Sandi's picture

peak silver just arrived 5 minutes ago!

Silver, that's the name of my horse. When there's no more gas, Silver will get you where you're going.

Hi-yo, Silver.

kathy.chamberlin@gmail.com's picture

i just got some new classic X-country boots, 75% off. i am ready for alley skiing and fast get a ways. i like your horse, sally.

Hi-Hoe, Silver.

 

SheepDog-One's picture

Peak oil is peak BS for peak carbon tax world energy total control by a few players.

VK's picture

Your comment is the epitome of ignorance. 

SheepDog-One's picture

LOL, keep believing the BS sheep.