How then, do we move backwards? How does a society, with most of the people having no clue of future events, move from being dependent on a vast and intertwined network of goods and services produced by the indigenous people of whereever, to a local resource and renewable energy based society, and do so in the timeframe available (20-30 years using the most liberal extimates, 10-20 with resonable estimates, 5-10 with worst case scenarios), all the while prices on everything increasing, world politics getting more militaristic, governments continuously reducing civil liberties, shortages of goods on the market and weather patterns resembling bad Hollywood movies?
Like the terrorist attacks of 9/11, Hurricane Katrina stands to become a defining moment in our nation's history. While the precise meaning of such moments remains to be interpreted, Matt Simmons believes the natural disaster may well be remembered as the start of "our great energy war." "We're almost at the verge of having real energy shortages," Simmons said last Friday, when he issued a wake-up call to a standing-room only audience at the Center for the Arts. "We could be looking at $10-a-gallon gas this winter."
The problem with Simmons' predictions is that, even if there is an imminent shortage, price shouldn't be able to get that high due to demand destruction. There is evidence that demand is being curtailed already.
Posted: Wed Sep 28, 2005 10:43 am Post subject: Re: Simmons: $10/gallon gas this winter
Quote:
The problem with Simmons' predictions is that, even if there is an imminent shortage, price shouldn't be able to get that high due to demand destruction.
Sure, but take that just as a way to make people understand peak oil issue.
Joined: Aug 12, 2005 Posts: 321 Location: Arlington, VA
Posted: Wed Sep 28, 2005 10:49 am Post subject: Re: Simmons: $10/gallon gas this winter
Demand destruction may not be enough to hold down the price of gas and crude (there is worldwide demand etc). And also, what demand destruction? Did anything change significantly in the climb from $1.5 to $3 per gallon? $10 this winter will probably end up being wrong, but I don't see anything in the way of $6 by next year other than people ranting and whining while they pump their gas.
Joined: Dec 25, 2004 Posts: 446 Location: Salem, MA
Posted: Wed Sep 28, 2005 10:59 am Post subject: Re: Simmons: $10/gallon gas this winter
this is why the wife and i don't use the car unless we have to anymore. walking and biking is still not billed by the gallon. this winter, it's snowshoes for us... _________________ UNLESS
Posted: Wed Sep 28, 2005 11:04 am Post subject: Re: Simmons: $10/gallon gas this winter
I went to see a screening of End of Suburbia in Rockland, Maine yesterday. Afterwards there was a discussion during which Matt Simmons was the most interesting speaker by far. He told the audience that by 2020 the world would conservatively need around 125 million barrels and that we may only have 70 million barrels coming in. Admittedly it was a somewhat peak oil crowd, but the truth hurts. Brownie Carson and PUC head Ms.Reishus bumbled on about their hybrid cars and energy efficiency, while Matthew Simmons gave us a hint as to what is really going on. It's scary! The wolf may be at the door. Maine is a cold place, and $10 gas will keep us home, but even $5 heating oil is going to make it a very long winter...
Joined: Oct 23, 2004 Posts: 5328 Location: New Jersey
Posted: Wed Sep 28, 2005 11:07 am Post subject: Re: Simmons: $10/gallon gas this winter
There is no way to predict what price any energy product should sell at, all we know that it is going higher due to dimishing supplies. So yes the point is that that will cause us in the US a lot of pain.
I would guess that we go to price/allocation controls well before we reach $10, mostly because the issue of price gouging seems to be a political rallying cry for both parties.
Joined: May 23, 2004 Posts: 276 Location: Melbourne, Australia
Posted: Wed Sep 28, 2005 11:17 am Post subject: Re: Simmons: $10/gallon gas this winter
Demand destruction is overrated. So long as folks still have available credit left on their plastic, jobs, food, and there's fuel for their vehicles for sale, they will still drive, no matter the cost. Few will actually make more than the most cursory conservation efforts in the short to medium term unless there is no other option.
And there's almost always another option. Like not spending as much on unrelated goods and services, meals out, holidays etc. _________________ The purpose of human life revolves around an endless need to extract ever increasing amounts of carbon out of the ground and then release it into the atmosphere.
Joined: Sep 14, 2004 Posts: 6006 Location: Rural Virginia
Posted: Wed Sep 28, 2005 11:31 am Post subject: Re: Simmons: $10/gallon gas this winter
People looking to "demand destruction" for reassurance need to look again. Remember that demand destruction comes at the cost of economic growth, in a fairly smooth direct correlation. So if demand really gets crushed, so will the economy.
(I personally consider the imperative of economic growthism a form of suicidal madness, but that is a subject for another day.)
Posted: Wed Sep 28, 2005 11:32 am Post subject: Re: Simmons: $10/gallon gas this winter
Not only is the demand for gasoline quite inelastic in the US (does anyone have figures for the elasticity of demad for gas in America, vs. other nations or other products?), but there is also an time inelasticity for demand destruction (again, can anyone point to an economics paper on this?). Basically, it takes time to make alternate plans (i.e. sell the SUV and buy a Civic), and in the interim there is a "practicality" support to inelasticity of demand.
Joined: May 13, 2005 Posts: 2486 Location: The Urban Village
Posted: Wed Sep 28, 2005 11:36 am Post subject: Re: Simmons: $10/gallon gas this winter
Heineken wrote:
People looking to "demand destruction" for reassurance need to look again. Remember that demand destruction comes at the cost of economic growth, in a fairly smooth direct correlation. So if demand really gets crushed, so will the economy.
(I personally consider the imperative of economic growthism a form of suicidal madness, but that is a subject for another day.)
Well, it's reassurance that only goes so far. There is demand destruction and not all of it is negative to economic activity. People are joining car pool groups and driving their small car rather than their big car. Here's some economic activity caused by demand destruction:
Posted: Wed Sep 28, 2005 11:38 am Post subject: Re: Simmons: $10/gallon gas this winter
$10 a gallon gasoline prices within the next few months would drop
US consumption by half or more.
It's true we have kept driving with little decline as prices have risen
sharply, but there's a point out there, where our wants can not be
satisfied by our financial resources. We will greatly dislike walking,
car pooling and not going to Walmart every other day, but we will
have no choice in the matter.
Last edited by aahala on Wed Sep 28, 2005 11:43 am; edited 1 time in total
Posted: Wed Sep 28, 2005 11:57 am Post subject: Re: Simmons: $10/gallon gas this winter
deconstructionist wrote:
this is why the wife and i don't use the car unless we have to anymore. walking and biking is still not billed by the gallon. this winter, it's snowshoes for us...
Hmmm... don't forget, a pound of beef needs a gallon of gasoline
to make it to the store.
Joined: May 23, 2004 Posts: 199 Location: Charlottesville, Virginia
Posted: Wed Sep 28, 2005 12:01 pm Post subject: Re: Simmons: $10/gallon gas this winter
Simmons has been saying for years that we are almost on the verge of energy shortages. He follows this up with "We could be .... ".
We "could be" a lot of things. Why doesn't he just say flat out that there will be a crisis this winter? Reason: he's just guessing and trying to cover up in case he is wrong.
Get more cahones Matt. If you believe an energy crisis is going to happen soon, give us a timeline and a definite prediction.
Posted: Wed Sep 28, 2005 12:03 pm Post subject: Re: Simmons: $10/gallon gas this winter
tdrive wrote:
deconstructionist wrote:
this is why the wife and i don't use the car unless we have to anymore. walking and biking is still not billed by the gallon. this winter, it's snowshoes for us...
Hmmm... don't forget, a pound of beef needs a gallon of gasoline
to make it to the store.
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