Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Mon Jan 02, 2006 2:00 am Post subject: How high can energy $ go?
There seems to be much disagreement as to how high energy prices can go. On one hand there's the Mad Max scenario where a barrel of crude is worth more then a man's life and on the other end there are those that argue a barrel of oil can never hit $100.
I like to state that energy is not a "regular" commodity. For example if you walked into a grocery store and noticed the price of apples were hypothetically speaking 5 times more expensive you can simply choose to not buy apples....which I bet that's what almost everybody would do. Because consumers can choose not to buy apples it's price can never spike that high.
Energy is different. There is no choice unless one wishes to go back to the middle ages. Therefore the maximum price consumers will be willing to pay for energy will equal the amount someone is willing to pay to avoid being pushed back to the dark ages.
It wasn't too long ago that natural gas was 1/5th it's current cost. I believe energy prices can go even higher much to the chagrin of "Flat Earth" economists who once argued that $50 / barrel oil was "impossible". Some have argued no economist "worth his salt" would entertain $100/barrel oil. The world simply cannot afford it some would say. I disagree. Granted the 3rd world can't aford it but the 1st world definitely can. So long as there is somebody with money who's willing to outbid someone else to have the priveledge of "modern conviences" fossil fuels can rise in price.
How high can a barrel of gasoline go for in my opinion? It can be worth more then a man's life if we ever get to that point.
Joined: Aug 14, 2004 Posts: 2068 Location: San Diego, Ca.
Posted: Mon Jan 02, 2006 8:56 am Post subject: Re: How high can energy $ go?
Quote:
There seems to be much disagreement as to how high energy prices can go. On one hand there's the Mad Max scenario where a barrel of crude is worth more then a man's life and on the other end there are those that argue a barrel of oil can never hit $100.
I think the answer is a moving target. With high inflation and eventually hyper-inflation, we could see $1000 oil in 10 years. But what would that number be in today’s dollars? I don't know but I suspect it could go to $200 if there were a war with Iran, revolution in Saudi Arabia, simultaneous collapse in mega field production, etc. _________________ "Peak oil isn't more than an interesting industry factoid and doesn't have anything to do with the hysterics speculated on ad nauseum around here!" ReserveGrowthRulz
Posted: Mon Jan 02, 2006 4:53 pm Post subject: Re: How high can energy $ go?
If there is another big disruption like what happened with Katrina, prices would probably hit 100 for a barrel. The first time around, people get nervous and are more likely to just drive less. But the second time prices reach $70, people will be more comfortable with the high prices (constantly at 60 and people seem to carry on like usual). So oil prices would have to go higher than 70 if there were to be a major supply disruption like Katrina.
Joined: Dec 29, 2005 Posts: 24 Location: Cupertino, CA
Posted: Mon Jan 02, 2006 11:48 pm Post subject: Re: How high can energy $ go?
cube wrote:
On one hand there's the Mad Max scenario where a barrel of crude is worth more then a man's life and on the other end there are those that argue a barrel of oil can never hit $100.
Let's look at the useful work you could get out of a person and compare it to a barrel of oil.
A rough estimate of useful work per person per day is around 3 to 4 mega joules (716 kcal to 955 kcal). A barrel of oil is around 6119 MJ, so it is about 1500 to 2000 person days of work.
So it seems to me a barrel of oil will never be worth more than a man's life, but it could get really high!
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