Oil at $500/barrel? No problem, says Financial Times.

jdumars

I am dubious of many of his conclusions. But OTOH, there were many people who said $100 oil would be an apocalypse, and so far it really isn't. I wish everyone on here could have participated in the World Without Oil alternate reality game (http://www.worldwithoutoil.org). It was very instructive as to what might really go down as oil gets more expensive.
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Dismantle globally, renew locally!

NoWorries · Tar Sands Joined: Jun 05, 2008 Posts: 73

jdumars

Point taken, but bear in mind the pump price still has not yet caught up with the price per barrel. Prices per barrel have risen over 100% in the past 12 months; over the same time frame pump prices have increased approx. 20% to 30%.

So we're really still living in a 95-dollar-per barrel world right now.

(Someone feel free to openly correct me if I'm wrong on that. I'm on here to learn just like everyone else.)

SMA · Coal Joined: Jul 11, 2008 Posts: 18 Location: Sweden

Your link appears to be broken; this is the referenced article.

I'm in no position to judge the correctness of his position but I do agree that it sounds bizarre. Just because we have adjusted to high fuel prices here in Europe doesn't mean we will readily adjust to empty supermarket shelves. We are just as dependent as any other urbanized society on oil-fueled transportation to bring just about all the stuff we need into the cities. Not to mention the involvement of oil in the production of all that stuff.

DantesPeak

jdumars

...and much of that $40/Bbl infrastructure is in disrepair and will need to be replaced.
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Dismantle globally, renew locally!

Cashmere · Light Sweet Crude Joined: Mar 27, 2008 Posts: 1499

Idiocy.

Couple things to keep in mind . . .

The U.S., and by extension the world, has entered into a major economic downturn. So even without the pressures of oil price increases, we're already hurting very badly.

The current price of oil (145) has not been priced into products you're buying right now.

For example, iron ore to China just went up 95% in price.

It'll take a long time for that increase to totally work its way into the system.

I think that today's price of oil will only be felt, totally, at this time next year.

I never thought 100 dollar oil would be the end.

200, I think, is the end of commercial air travel and the cheap life.

300 is the end of modern life.

Lots of steps in between, of course.

keep in mind that also working against the author is depletion/scarcity/rationing.

Maybe 15 dollar a gallon gas could be survived.

But NO gas will not be survived by the modern world.
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group.

Munqi · Tar Sands Joined: May 04, 2008 Posts: 70 Location: Finland

Isnt the price of oil actually a lot lower in reality if you consider the inflation on the dollar? As in alot cheaper for everyone else but the US.

Could the american economy function with these oil prices without taking debt?

DantesPeak

NoWorries · Tar Sands Joined: Jun 05, 2008 Posts: 73

Thanks for all the replies.

Incidentally, does anyone know what Prof. Willem Buiter was predicting (in terms of the price of oil) 2 years ago? That might give us a better insight into his overall rationale, and whether he is of an overly-optimistic mindset or not (where the price of oil is concerned).

scalbers · Coal Joined: Jul 13, 2008 Posts: 1

Serial_Worrier · Heavy Crude Joined: Jun 05, 2008 Posts: 233

$300/barrel = world economy in smouldering ruins!

Alanintx · Coal Joined: May 20, 2008 Posts: 15

Didn't Matt Simmons just say on CNBC Friday that he is surprised oil is much more expensive?

What is Saudi production falls, say, 5 per cent in four years? And it becomes clear they peaked and are going over the other side in a hurry?

Sounds to me like the good professor's opinion is in line with Simmon's projections in his book.

Fiddlerdave · Heavy Crude Joined: Mar 18, 2007 Posts: 268

You have to love a view from an Ivory Tower. Does our dear professor think that 10% income cut would occur evenly across the board for all income brackets?

The reality will be the top continues their 20% increases, or may a little slowdown in increase, and the bottom 2/3 of income brackets will suffer a 80% drop in income, and be eating clay and cardboard like they do in Haiti.

The resulting society will not be apleasant place for anyone.

kilik · Tar Sands Joined: Dec 13, 2007 Posts: 21 Location: Norway

At the same time USA is probably the country in the world which has the biggest potential to reduce consumption. Millions of Americans are able to switch to lighter/more efficient cars that could reduce their consumption by 50%. In Europe and Japan people are already driving 40 MPG cars.

Could we handle $500/barrell? It depends on WHEN. If it happened tomorrow it would be chaos, if we see a steady, linear rise to $500 in 2015 we would be able to adapt.