April 18, 2006

Petrocollapse

Follow-up to Peaking of global oil production from Nicks blog

My previous article sparked a lot of angry protest about my arguments for petrocollapse which was probably mostly sparked by the way I ended the blog by creating a challenge that sounded like I knew everything and no one could prove me wrong. I have been accused of not understanding anything, being very onesided and using false information to justify my arguments. I would like to correct these to explain myself and my article more clearly. I will hopefully do this in an unbiased way (forgive me if I fail to do this). It is incredibly complicated to relay all these issues in a blog, so as you are reading I would ask that you keep in mind what was said before and not to focus on a single part without considering the rest. I do not claim this to be complete or perfectly accurate, none the less it is interesting to consider and I would appreciate a valuable debate which does not simply dismiss this.

When oil production peaks there will be a shortfall of supply and this will cause the price of oil to rise inorder to reduce demand and encourage more supply. Initially this demand destruction will occur by reducing unnecessary car trips and other conservation methods. This will reduce the strain for a while I suspect and give us chance to implement alternatives. A significant increase in production is unlikely in the long term and it would take several years for this new production to come online. When it does it will slightly reduce the decline. I would consider this to be the bumpy plateau which may last for several years, perhaps with gradually increasing prices. Oil will continue to decline and this plateau will eventually end at which point the price of oil is likely to get very high and there would be further oil shortages. As these prices get very high so do other products due to their dependence on oil, unless we have by this point managed to remove this dependence with alternatives.

Questions then arise, how high will prices go when production peaks and how long will this bumpy plateau last? Many of the worlds largest oil fields that have already gone into decline have a decline rate of over 10%, this is due to the drilling technology that was used, they run out very quickly (not the bell curve one might expect). Other issues need to be taken into account here, particularly political ones. When peak is realised there may be a significant amount of panic, violence (wars) and political manipulation (middle east etc) which would send prices even higher than they otherwise would be. If prices go up too fast and too high as a result then what will happen? It will become viable to seek alternatives to oil, however it will still take time for these alternatives to be put in place. Currently these alternatives (mostly) are still in very early stages and to suddenly have to take them to global levels that replace oil is going to be very difficult. It should also be noted that the cost of making these alternatives increases with oil (since they require energy and oil products to make them, at least until the alternatives are in place). As a result of these alternatives costing more than they do now and the fact that a massive infrastructure (for hydrogen) or construction (for power plants and such) would take time and cost yet more (this initial cost may be too high and cause the viability threshold to also be higher than it would seem at the moment), it would mean oil prices would rise much higher than perhaps expected. Coal is likely to become viable before these more expensive alternatives, and this would be a backward step since we moved from coal for a reason (cost, efficiency, …) and would add to climate problems (coal to oil technologies exist but they are costly and what I refer to here is the use of coal in the cheap old ways). These issues are difficult to predict because it is a hugely complex dynamic system with massive numbers of variables, as a result I have not gone into much detail but I have considered these in more detail and it seems oil will become very expensive before the pace and viability of changes becomes enough (debatable, I am not certain).

How long will the plateau last? Not very long I suspect (again cannot tell), due to political reasons. This is difficult to predict because I cannot determine demand destruction, political issues, new oil field developments and so forth. I would think that 10 years is an optimistic (I expect less than this) time for this plateau. Oil prices would probably be very high but supply would still meet demand as demand will still be reducing and supply increasing (due to increased investment). Alternatives may also be gradually comming online (at least the easy ones, which may reduce the strain on oil).

What would it mean to have very high prices ($200 per barrel ?, I have seen figures like this being discussed and much higher) and a 10 year plateau (again probably less, some suggest no plateau at all)? This is overly simplistic but the price of a barrel of oil does correspond to how much it costs to fill up a car, if anything it is more. As a result it would probably (uncertain) cost around $200 to fill up a car (if oil = $200). Many companies that depend on energy would struggle in this period (before alternatives have been implemented or become viable) and may go bankrupt (this has already happened to some and others are coming close with recent rising energy prices). As I am sure any economist would say at this point, there would as a result be demand destruction and prices would drop to the correct levels. This figure already allows for demand destruction (in this scenario), demand for oil can only be reduced so much without these alternatives yet in place. This kind of stress on companies and individuals may be too much. How can the average individual afford these massive price increases (in nearly every product) especially when they already have debt and may even be unemployed as a result of companies going bankrupt. It may be that even when these alternatives do become viable and have been implemented that the average person cannot afford them either? This may of course be wrong and that these alternatives can be done cheap enough to be afforded by the majority of people. I say majority, not all, because a large number of relatively poor people will not (this is already true now with fuel poverty) and that it is quite possible for this minority (or maybe majority with prices this high) to disrupt civil order to a huge extent with massive riots (like those in Paris, but this would be worse since they would be unable to live in warm homes and feed their families).

I could go on forever discussing these kind of issues. In my previous blog on this, several arguments were made against what I have just said, they are valid arguments. Change habbits: drive less, work from home, don't go on holiday, work locally. This would be the demand destruction I speak of. Alternatives: nuclear, solar, wind, hydro, biofuel, coal to oil, tidal. Along with hydrogen systems for transportation. These are valid alternatives I do not dispute this. The problem is how flexible is our economy really when it comes to making so many expensive and difficult changes in a short time? It seems most people think these kind of things would happen very rapidly if they needed two, but how fast and would it be fast enough? How long can the economy survive with high oil prices and these changes not in place? (Please note that the following estimated times may be wrong but you get the idea). Would it not take 5–10 years to build power plants, 10 years to rip out all existing oil based transport infrastructure and install hydrogen and replace all cars with hydrogen cars. Would it not take 10 years or so to convert enough land into biofuel land and build associated production and distribution plants. Would it not take 5 years to build enough hydro and wind systems. How is everyone going to afford to install solar panels, it may be cheaper than staying with oil but they may still not be able to afford it, and how long would it take to increase their production levels, several years? This is assuming we move as fast as possible with no interruption (ie. as it is today in our relatively calm economic state). What happens in the mean time while these things are being done? We may be starting some now but compared to what would be required to replace oil this would be nothing. Again I am sure someone would say that it does not have to replace oil completely but enough to reduce demand and lower prices. True, it will take several years for this to begin and by that time oil production will have dropped even further, so these initial alternatives will only offset that decline and hence prolong the plateau as I suggest (10 years?).

I leave it to you to expand on some of the above issues (a lot have been left out). When all this required change is considered with the massive civil unrest at the high prices and the possible collapse of many business and resulting unemployment, it seems difficult to see how the economy will survive. Perhaps I over exagerate some of the challenges and underestimate the power of the economy, but there has never been anything this challenging before and the least we can expect is a depression greater than that of the 30's. The government is likely to get involved and tax oil companies to subsidise alternative energy. The oil companies are likely to provide alternatives, but we still suffer from the pace of change problem and will governments actually survive such a crisis?

It seems this is still one-sided, I again leave it to you to see the other side (since that is how you see it anyway) and to challenge this, but please do not accuse me of knowing nothing. We are in for a turbulent time and I seem to have less confidence in our ability to get through this than most (I am a pessimistic person). Forgive my mistakes and point them out politely please. Thanks.


- 27 comments by 1 or more people Not publicly viewable

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  1. Related to your earlier post (seeing as you've blocked comments to it): I'm sorry if you think I was calling you stupid. Actually I was enjoying the debate and was disappointed you decided to end it. Being (or feeling like you're) the only person on one side of the argument doesn't make you wrong, and I don't think any of your arguments were inherently wrong.

    The only point I would make is that it's hard for us, the commenters, to realise that your arguments were more coherent in your head than you appear to admit they were on the blog. We kind of have to go on what we can read, and so my comments were designed to push you into writing a little more. Ending the discussion prematurely was a shame, and the large number of comments should be seen as recognition for writing an interesting first entry that got people's attention!

    18 Apr 2006, 21:04

  2. Indeed the arguments were more coherent in my head, I do have difficulty in expressing them since they are so complex and took so long to form. It is not really the end, I just wished to start again since I seemed to get off on the wrong foot and attracted very negative comments. Thanks.

    18 Apr 2006, 21:09

  3. Well there is serious talk of $100 a barrel before year's end…. link

    I suppose people are a bit complacent after what happened in the 1970's. A massive increase which was short-lived.
    link

    On the other hand today's price of $70 a barrel does appear to be a record – even allowing for inflation
    link

    (in 1974) The extreme sensitivity of prices to supply shortages became all too apparent when prices increased 400 percent in six short months.

    18 Apr 2006, 21:58

  4. The 1970's was a result of America's oil production peaking (partly), that was solved by increased production elsewhere and imports. This is global peak and there are no such easy solutions, this is permanent.

    $72.5 last time I checked

    18 Apr 2006, 22:12

  5. I think the main thing that I detect about your arguments that I disagree with is the idea that one thing will happen (an increase in petrol prices), then a reactionary shift will happen that will take many years to have effect, and in the meantime everywhere goes bankrupt. In reality, I think the changes are happening on a slightly more gradual level. For example, the US now produces over 30 million tonnes a year of ethanol for blending with conventional road fuel (did you know that Tesco petrol is sold with a 5% ethanol blend too?) and it is predicted that biofuels could account for 10% of fuel sold within 4 years (as blended fuels with petrol and diesel). Obviously this doesn't alone remove the dependency of transport fuels from oil prices, but it does reduce it slightly and more crucially reduces demand for oil, in doing so reducing the price. Within the next few months we are expected to get a report back on the feasability of another program of nuclear power station building in the UK, which will ease our dependency on oil and gas prices for electricity. Etc, etc.

    With regards to coal being a "dirty" technology, sequestration could provide a saviour for us that would allow us to use a cheap and plentiful fuel in the medium term, with well-proven and quick to build power generation technology and negligible environmental impact. This requires proving on a large scale and by no means should it be treated as a certain reliable solution, but it has enormous potential and does offer a potential light amongst the gloom.

    18 Apr 2006, 23:42

  6. A very good comment, however it should be noted that my argument seems like one thing at a time because of my inability to say more than one thing at once and to simplify it a little. A lot of what I said happens very fast and it all works together at about the same time, this is complex and unpredictable, but I attempted to put the main points across.

    I do not deny that somethings are in place now (I said as much), but I feel you overestimate this, our use of oil has dropped little as a result and our dependence is still huge. Any drop in oil supply would still make those ethanol substitutes expensive (as in the final mix, maybe not the ethanol itself) and 10% ethanol is about the best they can do without engine modifications. It does reduce demand and is part of this demand destruction, but oil may decline faster than we can replace it with these existing technologies, currently they do not even prevent our yearly demand for oil increasing let alone replace any shortfall.

    Things will happen fast, the 1970's show this to be true. This is going to be a knife edge situation, things could go either way in my opinion.

    Thanks for that constructive comment.

    19 Apr 2006, 07:44

  7. "10% ethanol is about the best they can do without engine modifications"

    We can achieve 85% easily with minor modifications to new vehicles. Sales of E85 compatible cars are booming in countries like Sweden (the market has grown 540% in the last 12 months, aided by government concessions), and in the US over 2 million E85 cars are now on the road, with GM alone planning to sell 400,000 a year. These vehicles are heavily based on existing technology and economically competitive to produce. Eventually once more radical modifications are accepted, I see no reason why we can't shift to 100% ethanol, but the 85% mark can easily be achieved with very little alteration (and these vehicles automatically detect the ethanol blend and switch engine maps accordingly, so if you stuck pure petrol in it, they'd still run fine). With advances in refinement and growth in ethanol production, I see this as a real alternative. I personally don't think this will affect the oil price all that much, as I think demand from developing world areas will continue to rise fast in the coming years, and they will be much keener to not have to invest in the ethanol infrastructure. However, when the price rises do really start to hit, I think the effect on the west will be comparatively small due to our diversity of energy supply that we are building. Your message however that this increased diversity has to happen pretty soon and pretty fast before oil skyrockets and we take a serious financial hit is an important one to heed, because if we don't sustain and expand the growth we're seeing in non fossil fuel technologies then we really are screwed.

    19 Apr 2006, 08:21

  8. I would be extremely interested if someone could perhaps write down how they think this oil peak might play out so that we have both sides of this argument clearly defined. Thanks in advance to anyone willing to do this.

    If indeed you are right then things are a little better than I though in the west. Still, this does not seem to be reducing oil demand, as you say this is probably due to China and India.

    It really is a matter of how long we have and what we can achieve in that time. If peak happens now or in 2007 then I fear we have not done enough.

    19 Apr 2006, 08:25

  9. I suppose the argument can be summed up as a number of levels of response. Starting from the oil producers themselves and finishing with consumers:

    1. The current high price is more to do with demand than supply. A lot of oil is being extracted, prices are high only due to industrialisation in China and India. Temporary factors like the standoff between Iran and USA and the disruption in Venezuela, Nigeria and Iraq also play a role.
    2. If the oil price remains high it will become economic to extract oil from inhospitable places like the Arctic. The last dregs will be drained from disused fields.
    3. Companies making oil extraction and exploration technologies will find an increased demand for their products. Competition between them will lead to improvements in these products.
    4. If despite (2) and (3) the oil price continues to rise, industries which consume oil will look more closely at increasing the efficiency of their operations. They will begin to use substitutes such as coal or methanol. Competition will lead to the improvement of those technologies which are used to exploit these substitutes.
    5. If despite the increased efforts in supply and the reduction in (the growth of?) demand, the oil price still rises, oil using industries will have to pass the price increases onto their customers. These consumers or firms will start to cut back on their use. The example of cycling to France for a holiday instead of flying to Bali comes to mind.

    The end result will be than even if oil becomes so scarce that it's $400 a barrel, civilization will not end.

    Of course there will be disruptions. People will lose their jobs, some of them will get better ones and some will fall by the wayside.

    As Marx put it over 150 years ago:

    The bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society…. Constant revolutionising of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. link

    19 Apr 2006, 09:46

  10. My take on the situation is similar to George's, except with the order, and point 5. Firstly I think switching to alternatives will occur naturally anyway, and certainly we will begin to see shifts before drilling and extraction in the artic increases markedly. With point 5, I think the rise in oil prices will result in a switch to different energy sources with less pronounced changes in usage. I think there will be many changes in the domestic and electricity generation sectors, where improved efficiency, increased domestic insulation/better housing design and alternatives such as CHP and solar heating will become large growth areas. We will also see a switch to power generation from more nuclear stations, coal fired plants with sequestration and a slow to moderate growth of renewables. In particular I think tidal and wave generators have much promise (certainly more than wind farms).

    Transport however I cannot see a revolution occuring any time soon; the next move will be towards biofuels because it's by far the easiest move for us to make technically, and therefore the cheapest (and since to the end user it's hardly a change at all, liable to gain acceptance easily). I still think fuel cells, electric cars and hybrids to be a bit of a dead horse, certainly any breakthroughs that will make these vehicles viable and acceptable to the mass market is a long way off. I think the cost of air travel will rise and we will see a reduction in usage, but not so pronounced that it becomes genuinely unaffordable to the majority, just more of a luxury than it is at present.

    19 Apr 2006, 10:39

  11. It does seem that some of the criticism of my arguments (in the last blog) can now be applied to this. It appears as though these arguments have only been considered in isolation from each other and other factors (political and social).

    The current high price is more to do with demand than supply … prices are high only due to industrialisation in China and India

    That is not entirely correct and is ignoring many other issues, supply is not being increased as it should be to meet this new demand and this does show how difficult this is. Production is peaking, this increased demand is only increasing the pressure and more rapidly removing previous spare capacity. At any rate we cannot stop this increase in demand without stopping China which would be very bad for the global economy since China now manufactures a lot of cheap products for us. Other political issues do have an effect but there have always been such issues and they can only explain the price if there is fear that supply may not meet demand because of them.

    Companies making oil extraction and exploration technologies will find an increased demand for their products

    Indeed, but it takes a long time to make oil rigs and drilling equipment, especially since Katrina destroyed a lot of it (and will there not be more strong hurricanes this year?, that is what they predict). The demand for such rigs is causing prices of these to rise as well since supply again appears to fail to meet demand. Improvements in these products are presently showing little return on investment when it comes to actually finding fields, but I guess this could change. The same is true of oil extraction technologies, but again with higher prices that may change this. It should be noted that a lot of modern extraction techniques make it impossible to get at the last drops, only the older fields can have this done (Texas Donkeys…). (I am sure someone will check my abover 'facts' and find flaws, please do).

    The end result will be than even if oil becomes so scarce that it's $400 a barrel, civilization will not end

    That depends how fast it happens and what I am saying is that when combined with all the factors involved it may happen very quickly. If it does not then I am sure we will adapt as we have in the past and you would be right. A lot of the suggestions you make assume we have enough time to implement them, I argue that we do not. We must not forget to consider how it becomes increasingly difficult to make these alternatives as their costs increase due to oil prices (a runaway effect possibly, or at least it increases viability threshold). How much and how fast will consumers change their attitudes and accept these greater costs and less freedom, they may see this as going against progress. They have over recent years been encouraged to consume and travel more, now we would have to reverse that quickly.

    Otherwise a great comment that clearly shows the other possibilities. Thanks, it is an interesting debate.

    19 Apr 2006, 10:50

  12. Perhaps we should be debating how fast prices will rise and how fast we can respond. Also we need to debate what the economic and political environment will be when these changes need to be made. I do not dispute that otherwise these alternatives could be implemented. This is something I would be interested in and is what will really challenge my arguments.

    19 Apr 2006, 11:14

  13. I don't know how valid this argument is, but I was just discussing these oil futures with a 3rd year economics student and yet more questions and potential problems arrose. What happens when people (or companies) realise that we are peaking and that oil prices will only go up? Would they not invest like crazy in oil futures to try and make money out of this crisis? If there was such a sudden increase in oil futures investment it would send prices sky high quite quickly. What would you do if you knew that oil supplies were never going to improve again and that prices would only ever go up (bar a few bumps)? I personally would invest. This just exagerates the problem further. Feel free to destroy this argument if it is flawed, I only just thought of it.

    19 Apr 2006, 16:28

  14. I don't think you have got that right.

    If some crazy person thought oil would be $1000 a barrel on 1-Jan-2010, they would buy a contract to buy at $500 in 2010 if that cost $100 per barrel. That would mean $500 gross return on an outlay of $100 per barrel.

    If an oil company thought they could get barrels of oil out of the ground by 1-Jan-2010 at a cost of $300 a barrel, they would fall over themselves to sell the person the contract – as that would mean $100 now and $200 profit in 2010 on each barrel.

    With oil companies falling over themselves selling such contracts, they would be flush with money to make sure they could find whatever oil there was by 2010. The price of the futures contracts would fall until some sort of equilibrium emerged.

    So the price of futures does represent the weighted opinions of the punters (weighted by how much they want to bet).

    I suppose options rather than fixed contracts makes things more complicated, but in the end some sort of equilibrium price emerges which balances the amounts each player is willing to bet. The owners of the oil concessions don't really have to guess the price of oil, only the cost of getting it out – if other players will buy the oil at a good margin over producer cost, the oil people will sell it.

    NB. Terminology. X buys from Y is the same as Y selling to X. X sees a cost, Y sees a price.

    19 Apr 2006, 18:02

  15. I can't pretent I know much of the politics here and I'm certainly not great with economics but, as a physicist, this seems to be a giant numerical model to me. Firstly, its a very chaotic system and so I can't say I believe any of the numbers or timescales floating around until someone tries to model the whole thing properly (and I'm guessing someone somerwhere has, and is maybe busy buying shares in energy alternatives as we speak)

    My main problem is with your geneal idea of it causing a 'collapse' as I can't work out exactly what a collapse is going to mean. If you think it's going to be some sort of apocalyptic event I'd have to disagree. Economics is a gigantic negative feedback system – the reponse not only tries to correct the problem but its strength is related to the problem severity. As the situation gets worse the reponse will get more extereme, possibly even exponentially so to begin with. You, and this entire discussion in itself is an example of the initial low amplitude repsonse.

    You're starting to think about the situation we're heading toward and you're certainly not the only one. Many of those people will be, even now, busy investing in the alternatives and this will gradually increase as the severity of the situation increases. By the time your catastrophic are about to take place there will be plenty of smart people with the alternative infrastructure already in place, ready to cash in on everyone else's plight.

    Don't under estimate the power of peoples ingenuity and desire to make money out of a bad situation.

    Personally, I'm more worried about things that come very suddenly and we can't control, like the increasingly likely flu pandemic but that's another story, covered elsewhere on these blogs.

    19 Apr 2006, 19:15

  16. I guess collapse is perhaps a missleading word, you make a valid point, what is collapse? I guess I use that word because I can see the deaths of billions of people resulting from the massive violence and famine that may result from this (a population collapse), since this massive population is presently supported by oil. However that is the extreme case and I do not claim that this will happen for certain, it is more likely to be less apocalyptic than that. The economy may survive in some form but it would be a completely different shape to what it is now. It should be remembered that our planet can only support 2 billion people in the long run so this could be the trigger to such a "collapse".

    It would be even worse if some pandemic appeared at the same time, along with global warming, but this is unlikely. The economy could only "collapse" if it itself failed in some way, surely a purely external factor could not do it? I don't know.

    As a note, this may help some to realise that some of these issues may be beyond even our economy. This article was written by the Professor of Economics at the University of Warwick. It does not discuss ethanol but does give a sense of the scale of the problem and to produce enough of either may be impossible.

    19 Apr 2006, 19:36

  17. The article you linked to is very simplistic Nicholas. It considers only one alternative to petrol for transport (hydrogen), makes nothing of the fact that two thirds of energy use in the UK is not transport fuel, considers only wind or nuclear power as alternatives to generate power. The reality is much more diverse than that. No-one is saying that we can rely on oil in the coming decades, but the article is in my view a very glossy and over-simplified analysis of the years to come. And a long term collapse in the numbers of humans on earth to a figure around half that which are here now is by no means a bad thing; what is potentially catastrophic is the manner in which this reduction happens.

    The crux of our debate really, as you have alluded to in previous comments, is how fast the price rises will happen, when they will come and how high they will go. These are questions that I don't think any of us are qualified to answer with any great level of accuracy; however some economic analysis would be good to see. Personally I have no idea about this; I am more aware of the speed of change that is happening at present and the alternative routes that we will hopefully take to replace oil.

    19 Apr 2006, 20:00

  18. A car that does 15,210 miles per gallon link
    OK probably not very practical.

    19 Apr 2006, 20:26

  19. I know that Christopher (please spell my name correctly or call me Nick), I said as much. That was not the point of posting it, it was to show the shear scale of the energy problem regardless of how we solve it. Sorry I bothered, I just thought I would point out that a Warwick Economics Professor was interested in the topic. Otherwise your comment is correct, economic analysis would be good, I certainly am not qualified.

    Further valuable debate is probably not possible then, oh well, it was good to let others know my opinion. What would happen in the very long run if the economy did or did not collapse, where are we heading either way? That would be interesting (sci-fi), but beyond the scope of this thread. Lets just wait and see.

    Nice car, lol.

    19 Apr 2006, 20:42

  20. Here is an interesting debate that is very similar to this (only it sees a massive recession not collapse).

    20 Apr 2006, 14:27

  21. And here is another of Jeremy Clarkson's wonderful columns, explaining why oil isn't running out and why there's no need for panic.

    20 Apr 2006, 19:37

  22. Extremely funny, but I am insulted by his stereotypical views, he obviously does not know who these peak oil proponents are and how much more we have thought about this than clearly he has.

    20 Apr 2006, 20:16

  23. Apparently on planet Clarkson a barrel of conventional oil cost $35 on 6 April 2006 (the date of the article).
    On planet earth it is (June delivery) about $72 a barrel today.

    20 Apr 2006, 22:01

  24. To be fair to Clarkson, that article appeared in Top Gear April edition, which of course in magazine terms means available from the beginning of March. So I imagine he wrote that some time toward the end of January/first half of February. Granted it's been trading higher than $35 for quite some time now, but I think the point he was making was that $35 is the threshold at which non-conventional reserves become economic.

    I'm sure he knows exactly who the proponents of peak oil are Nicolas (apologies for earlier mistake). He got a pie in the face last year by an eco-protestor whilst receiving his doctorate from Brookes. And considering he makes a living from motoring journalism, I'm willing to wager he's had a lot of conversations and meetings with a lot of people who all have their own take on issues like climate change, future trends in vehicles and where we're going to get energy from in the future. His article may not be of scienfitic use, but it does portray the general viewpoint of the proponents of those who see a real possibility in the alternatives Clarkson outlines in his article, and the general faith in human ingenuity that the end of the article sums up. The argument which we keep coming back to is whether or not the time response and readiness of the alternatives will throw a big enough spanner in the works or not. I personally think that if prices climb much higher then the demand for oil will have to slow, as many manufacturing outfits will simply not be able to afford the quantities of material and energy from oil they require and production will slow. This will hit the developing world much harder than it hits us, as despite our increased consumption per head the western world is much more efficient with energy and our percentage costs which are raw materials and energy from manufacturing are proportionately smaller.

    20 Apr 2006, 22:35

  25. They're the ones who see only bad in the world.

    Apparently I only see bad in the world, not true. Apparently I chain my self to fences and proclaim that nuclear war is inevitable. Apparently I see consipiracy everywhere. I would argue that the majority of peak oil proponents are none of these, I certainly am not.

    the general faith in human ingenuity

    Faith indeed, the belief in that which cannot be proved and is irrational (in the eyes of science and reallity). Perhaps I am just playing with words, but faith alone will not save us if it fails to match reallity. None the less I do not argue it in principle, you are right about its scientific value being nonexistent.

    Demand will fall by manufacturing entities (of every kind, even food producers) not being able to afford energy? How far could it fall before unimaginable damage is done to the economy and the fear takes ahold amongst the investors in such companies. Demand cannot be reduced far (quickly) without causing the very damage that I claim will happen.

    This will hit the developing world much harder than it hits us

    This is a global economy, if one country falls (or suffers) then we all will suffer. Even more true if many developing countries fall, we depend on them for our food and cheap products. We do not do a lot of manufacturing anymore and this will mean the direct impact will be reduced, but we still depend on this manufacturing from developing countries, we are not an "island" anymore.

    21 Apr 2006, 08:14

  26. Cool cars!

    22 Apr 2006, 12:39

  27. Well I just paid 105.9p per bloody litre.

    Whether thats relevant to this thread or not, it's bloody ridiculous.

    25 Apr 2006, 17:17


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