I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: Oct 18, 2004 Posts: 2106 Location: kiwibush
Posted: Wed Jul 02, 2008 10:06 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
americandream wrote:
I'm not entirely sure just what your notion of third world attitudes are, but I would hardldy rank the Chinese within the scope of what you have in mind.
Do you think the Chinese will be able to merrily increase their oil consumption at the same rate they are now if oil rises to $250/barrel, $400/barrel, or more? Or, will their governments continue to be able to subsidize oil prices at those levels?
Gas in China is already around $3/gallon. Do you think the Chinese will continue to buy as much gas if it goes up to $5/gallon? Or $8/gallon?
Contrary to the beliefs of doomers, the Chinese aren't immune to the laws of economics.
Furthermore, since much of the Chinese economy is dependent upon exports to the US and the West, if the economies of the US and the rest of the West collapse due to high oil prices, the Chinese economy will eventually follow. And the rest of the world, too.
And once the entire world economy collapses due to high oil prices, demand for oil will plummet - and then so will the price.
I think no one in their right mind will deny that PO contemplates system failure. It's a question of magnitude I guess.
Your position on this board to date seems to contemplate mitigation of this crisis by one or the other means. That simply will not happen in my opinion. This is a systemic issue and the remedy can only be a systemic one.
Having said that, the die is cast for this way of life all across the globe and oil will be obtained, whether by market forces or martial force by the strongest players, it will be utilised into the peak, through the peak and beyond the peak until systemic collapse.
Thats where some of us on here and you, part company. We see no transitional outcomes, smoothening of the descent or other kindly outcome to the demise of Cornucopia. _________________ Bugger me, I hear oil's runnin out mate!
Posted: Wed Jul 02, 2008 10:09 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
Gas in China is already around $3/gallon. Do you think the Chinese will continue to buy as much gas if it goes up to $5/gallon? Or $8/gallon?
They will buy even more.
Quote:
Contrary to the beliefs of doomers, the Chinese aren't immune to the laws of economics.
With their dollar reserves, they will for quite a while.
Quote:
Furthermore, since much of the Chinese economy is dependent upon exports to the US and the West, if the economies of the US and the rest of the West collapse due to high oil prices, the Chinese economy will eventually follow.
At 11% GDP growth, they will soon have their own internal consumption. That is the 5 year Plan.
Quote:
And once the entire world economy collapses due to high oil prices, demand for oil will plummet - and then so will the price.
Not unless demand declines faster than oil production. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Posted: Wed Jul 02, 2008 10:16 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
Hogan wrote:
I understand how you feel. It still amazes me that some people will never understand even the basic concepts of the big picture. Or maybe they are just in denial. I don't really know which.
Perhaps it challenges beliefs and attitudes that were central to their very identity as humans made in the Western industrial mold. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Joined: Oct 18, 2004 Posts: 2106 Location: kiwibush
Posted: Wed Jul 02, 2008 10:16 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
Hogan wrote:
MonteQuest wrote:
It's going to increase until we hit the wall. The point being that we aren't going to slow down the runaway train. Too much double digit forward momentum. Too many people getting a taste of the "good life".
Just like when the Titanic hit the iceberg on that fateful evening. By the time the lookouts spotted the iceberg (peak oil), it was too late. Her speed was too fast (world oil consumption, dependency), and her rudders too small (energy alternatives) to allow her to miss the iceberg. The rest is history.
You have it there in a word. There's just too much momentum in the spread of consumerism for there to be what many seem to think will be a nice fit between price increase and demand destruction. Agreed, demand destruction will occur. That's a given. However, IMHO, there will be a significant lag between price increase and momentum slowdown, enough to slip us into a full blown crisis with nasty overtones. _________________ Bugger me, I hear oil's runnin out mate!
Posted: Wed Jul 02, 2008 10:22 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
Eli wrote:
Monte in the case of China and India I think it now goes beyond the desire for the good life.
I think they must grow and expand or they will literally start dying. Without growth their populations will start to revolt.
That's why I said they will buy even more oil as the price goes up.
Wouldn't you, if it meant getting your first car, TV and refrigerator after a life of tyranny and toil as a peasant?
Don't people read about Chinese history and culture?
And India right behind them salivating at the mere thought of it. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Last edited by MonteQuest on Wed Jul 02, 2008 10:24 pm; edited 1 time in total
Joined: Mar 26, 2008 Posts: 1371 Location: Seattle
Posted: Wed Jul 02, 2008 10:23 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
MonteQuest wrote:
OilFinder2 wrote:
Gas in China is already around $3/gallon. Do you think the Chinese will continue to buy as much gas if it goes up to $5/gallon? Or $8/gallon?
They will buy even more.
And following that logic, they will also buy still more if it hits $10/gallon, $20/gallon, and $infinity/gallon.
Utter absurdity.
MonteQuest wrote:
Quote:
Contrary to the beliefs of doomers, the Chinese aren't immune to the laws of economics.
With their dollar reserves, they will for quite a while.
If they flooded the world market with their dollar reserves in order to subsidize oil for their consumers, this flooding of the world would devalue the dollar even more, thus sending up the price of oil even more (since it is priced in dollars). The effect of this would be for them to spend ever-increasing amounts of dollars to purchase the same (or even less) amounts of oil. At some point their reserves would dry up, and the scheme could continue no more.
But of course the Chinese already know this, which is why they've recently reduced their subsidies.
Furthermore, this flooding of the world with dollars would crash the US and the rest of the world economy. Since much of their economy is dependent upon exports to the US and the West, once the economies of the US and the West crashed, the Chinese economy would eventually follow.
MonteQuest wrote:
Quote:
Furthermore, since much of the Chinese economy is dependent upon exports to the US and the West, if the economies of the US and the rest of the West collapse due to high oil prices, the Chinese economy will eventually follow.
At 11% GDP growth, they will soon have their own internal consumption. That is the 5 year Plan.
That 5-year plan is dependent upon exports to the US and the rest of the world. If the economy of the US and the rest of the world collapses, so does that 11% economic growth and the 5-year plan.
MonteQuest wrote:
Quote:
And once the entire world economy collapses due to high oil prices, demand for oil will plummet - and then so will the price.
Not unless demand declines faster than oil production.
If the world economy collapsed due to the Chinese flooding the world with dollars and due to $400 oil, demand would plummet far below whatever the current capacity at the time would be. _________________ Abundance - what a concept!
Posted: Wed Jul 02, 2008 10:26 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
Utter absurdity.
Next?
PS Didn't you read my last admonishment about unintelligent comments. They will buy more until they hit the wall of collaspe. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Last edited by MonteQuest on Wed Jul 02, 2008 10:27 pm; edited 1 time in total
Posted: Wed Jul 02, 2008 10:30 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
MonteQuest wrote:
OilFinder2 wrote:
Utter absurdity.
Next?
You believe the Chinese can continue to consume as much or more oil at $20/gallon as at $3/gallon?
No, that isn't the point. But they will try. That is the point. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Wed Jul 02, 2008 10:30 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
MonteQuest wrote:
OilFinder2 wrote:
Gas in China is already around $3/gallon. Do you think the Chinese will continue to buy as much gas if it goes up to $5/gallon? Or $8/gallon?
They will buy even more.
And following that logic, they will also buy still more if it hits $10/gallon, $20/gallon, and $infinity/gallon.
Utter absurdity.
They not only can but will buy oil at ever higher prices, until supplies start to drop so fast they can't any longer. That may take a few years or so.
$1 trillion cash of US dollars in reserves is about four times what they are currently spending yearly to buy oil. They only need to use a part of that to subsidize oil demand. _________________ It's already over, now it's just a matter of adjusting.
Joined: Mar 26, 2008 Posts: 1371 Location: Seattle
Posted: Wed Jul 02, 2008 10:41 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
Sorry, you added this in later
MonteQuest wrote:
PS Didn't you read my last admonishment about unintelligent comments. They will buy more until they hit the wall of collaspe.
MonteQuest wrote:
It's going to increase until we hit the wall. The point being that we aren't going to slow down the runaway train. Too much double digit forward momentum. Too many people getting a taste of the "good life".
When you said "we" you were not talking about the Chinese. Unless you think "we" are all Chinese?
At any rate, the scenario I just described above is, in essence, a "wall of collapse" for the Chinese. If they try to push the system by flooding the world with their dollar reserves in order to subsidize their consumers, at some point they will push the whole scheme until they've run out of dollar reserves. But by that time, their process of doing this will kill the world economy, and theirs will be caught in the falling tide as well.
I know you're a fan of overshoot. Perhaps you should apply the concept to the price of oil, too. Just as much as a species can overshoot the carrying capacity of its ecosystem, the price of oil can overshoot the capacity of its consumers to pay its asking price. Once both try to do this too much, for too long, the population/price will collapse.
Economics is really no different from ecology. _________________ Abundance - what a concept!
Joined: Oct 18, 2004 Posts: 2106 Location: kiwibush
Posted: Wed Jul 02, 2008 10:41 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
OilFinder2 wrote:
MonteQuest wrote:
OilFinder2 wrote:
Utter absurdity.
Next?
You believe the Chinese can continue to consume as much or more oil at $20/gallon as at $3/gallon?
Do you honestly believe that the Chinese will meekly revert to the days of Maoist agri-collectivism or even worse without a fight for preferential access to the remaining oil in a bid to neutralise the market?
Do you still persist in believing that the market will determine oil access as peak oil begins to set in? How do you sustain such a beliefe in the face of all the evidence to date. Please, how do you do it?
Edit: Directed at OF2. _________________ Bugger me, I hear oil's runnin out mate!
Last edited by americandream on Wed Jul 02, 2008 10:49 pm; edited 1 time in total
Joined: Mar 26, 2008 Posts: 1371 Location: Seattle
Posted: Wed Jul 02, 2008 10:42 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
Hogan wrote:
Asian and S. American countries will not sit by and do nothing while their economies crash due to demand destruction. They will continue subsidizing the hell out of oil and gasoline to keep growth going . . .
Which, I just explained, is impossible for them to continue indefinitely. Not that you paid attention. _________________ Abundance - what a concept!
Posted: Wed Jul 02, 2008 10:49 pm Post subject: Re: IEA: World Oil Demand Will Continue Growing, Despite Pri
DantesPeak wrote:
They not only can but will buy oil at ever higher prices, until supplies start to drop so fast they can't any longer. That may take a few years or so.
$1 trillion cash of US dollars in reserves is about four times what they are currently spending yearly to buy oil. They only need to use a part of that to subsidize oil demand.
Exactly.
Here's a picture of the Shanghai skyline.
Looks like Star wars, doesn't it?
Nothing of what you see in the photo existed 10 years ago.
Quote:
If you have been to shanghai before 1993
you will know what it looked and felt like to
be in china’s largest city in those days.
There were about 30 high rise buildings in
shanghai then and it could take half a day
to make a single phone call. Pudong,
which today is home to hundreds of
skyscrapers, the new international airport
and Shangri-la’s largest hotel was flat and
undeveloped land. It was impossible for
most people to imagine what would soon
become of Pudong and shanghai.
I have been back to shanghai frequently
since then, but I cannot describe the
progress and developments that have
taken place in my own words better then
trying to summarize it all in one single
sentence: “from the bicycle to formula one
racing in only 15 years”.
What happened in shanghai is not unique
anymore. We know today that similar
developments are underway in hundreds of
cities, from Beijing to the coastal region, the
north and south and the west of china.
By 2020 it is estimated that 250 cities in china
will be the home to more than a million
citizens.
By 2010 186 airports will be operational and
more than 65,000 miles of modern railway
network will transport travelers across china.
8,000 miles will be operated by high speed
trains connecting the key regions and cities.
OF2 wrote:
Since much of their economy is dependent upon exports to the US and the West, once the economies of the US and the West crashed, the Chinese economy would eventually follow.
Ahem...
Quote:
“US exports to china since 2001 have
increased by 100 percent. China is right
now the fastest growing export market for
the United States and number four in the
world for U.S. exports overall.”
_________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Last edited by MonteQuest on Wed Jul 02, 2008 11:02 pm; edited 2 times in total
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