Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Posted: Tue Mar 29, 2005 12:01 am Post subject: The Near Term Economic Effects of Peak Oil
If you don't know it by now, peak oil means the end of cheap, readily available oil. This price increase will flow through our economy like a pandemic disease, causing higher commodity prices, economic decline and rising unemployment. But not just commodities; there will be inflation in the price of everything. We are seeing it already. The most dependent countries on oil will be the most affected, and the least affluent countries will bear the first wave of economic onslaught as they will be the least able to afford the higher prices. Affluent countries like the US will have conservation and energy efficiency to initially fall back upon, followed by a decline in the standard of living. The poorer countries will just do without, having no huge gluttonous fat belly to sustain them for the harsh winter of oil decline.
Foreign aid and subsidies will fall to the wayside, and there will arise conflict between the natives and immigrants, especially the illegal ones. Homes and jobs will be lost, spurring competition for the remaining occupations that manage to survive the downsizing. As unemployment rises, there will be a migration into the military for work to support families. Families will double up in one home, while others will take in boarders to help cover expenses. Marginal business will fail and the rising dissent amongst the people will be squashed.
I have been trying to think of what I would cut out of my budget when it gets tight. I think I would no longer eat out at restaurants. I'm curious as to what others would cut, and if we can see a pattern or consensus for what jobs would first go? I think most people will pay whatever price gas is, until they no longer can. The more affluent, and those more forward-thinking will buy more efficient vehicles. Maybe, like in the phrasing of James Howard Kunstler, there will be a "decanting" of the suburban population back into the city as the 150 mile per day commutes become foolish and totally unaffordable.
How chaotic will this transformation get? And remember, we are not talking about shortages yet, just higher prices. This transition period may last sometime, perhaps years, before we see the signs of a real die-off, and then it will be those who are the most weak and dependent upon others. I think more might die due to conflict than anything else. They sure fought in the gas lines I was in during the gas crisis of the 1970's.
The end of cheap fossil fuels is going to have some dire repercussions. I'm not sure how accurate mine might be, but it sure is a place to start a discussion. Let's try to focus on the near-term effects. We are seeing some of them already in inflation and rising interest rates. And let's assume we don't have a Murphy's Law event right away to start a domino effect that leads to chaos, ok? _________________ 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 Thu Nov 03, 2005 10:54 pm; edited 3 times in total
I think we'll be surprised how much we can conserve and how this will forestall the most painful effects of Peak Oil for some number of years.
I think most of us could easily cut our energy use by 10-20% without feeling significant pain. The effect on world oil supplies would be dramatic.
We do start doing things like carpooling, using public transit, switching to high MPG cars and motorcycles, even walking and bicycling more. Not to mention turning the thermostate down or up a few degrees, taking shorter showers, using low wattage bulbs and flat-screen computers, etc., etc. The opportunities are practically endless.
So much of the unnecessary energy we consume is used just because it is so cheap. When it's not so cheap, we'll adapt.
I know, I know, that will only get us a temporary reprieve, but I don't think we should underestimate its potential to buy time. Meanwhile economic activity will shift from SUVs and other high energy consumption goods and activities to energy-saving goods and activities, so it's not like the economy will crash, but it will transition in the near-intermediate term.
I think we'll be surprised how much we can conserve and how this will forestall the most painful effects of Peak Oil for some number of years.
I think most of us could easily cut our energy use by 10-20% without feeling significant pain. The effect on world oil supplies would be dramatic.
We do start doing things like carpooling, using public transit, switching to high MPG cars and motorcycles, even walking and bicycling more. Not to mention turning the thermostate down or up a few degrees, taking shorter showers, using low wattage bulbs and flat-screen computers, etc., etc. The opportunities are practically endless.
So much of the unnecessary energy we consume is used just because it is so cheap. When it's not so cheap, we'll adapt.
I know, I know, that will only get us a temporary reprieve, but I don't think we should underestimate its potential to buy time. Meanwhile economic activity will shift from SUVs and other high energy consumption goods and activities to energy-saving goods and activities, so it's not like the economy will crash, but it will transition in the near-intermediate term.
Perhaps the opportunities are endless, but so is the population growth. I recently read that two physicists acknowledged that a 40% decline in our energy use would merely buy us 17 years before those savings would be consumed by new hungry mouths.
And what about the jobs that will be lost to this adaptation? What would you cut out? Who's job would you kill? Remember, millions of people make a living on our wastefulness.
And while this might stretch out energy supplies, it will not negate the painful effects of peak oil, which is higher prices. It takes energy to produce energy savings goods. _________________ 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.
Perhaps the opportunities are endless, but so is the population growth. I recently read that two physicists acknowledged that a 40% decline in our energy use would merely buy us 17 years before those savings would be consumed by new hungry mouths.
And what about the jobs that will be lost to this adaptation? What would you cut out? Who's job would you kill? Remember, millions of people make a living on our wastefulness.
True enough, but 17 years is, well, 17 years.
As for people making a living on our wastefulness, people can also make a living enabling our conservation...supplying all those energy-efficient goods and services.
Transitions are always tough. I think economists it "creative destruction."
Long-term I'm a Peak Oil believer, but I think the transition will more slow and grinding than abrupt and apocalyptic.
True enough, but 17 years is, well, 17 years.
As for people making a living on our wastefulness, people can also make a living enabling our conservation...supplying all those energy-efficient goods and services.
Transitions are always tough. I think economists it "creative destruction."
Long-term I'm a Peak Oil believer, but I think the transition will more slow and grinding than abrupt and apocalyptic.
Elijah, you make some good points, and I agree it might be a slow process, but if we can get 17 more years out of this sow, then what? Transition to what? How long will it take to train these people? Who pays for it? Where will the money come from? 1 out of every 6 jobs is tied to the auto industry. Remember, it takes energy to do any of this. I am trying to get a near term response. The months ahead. What will you cut from your budget to afford the higher energy costs??
PS I'm not looking for what we would like to see happen, but what will happen near term. _________________ 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 Tue Mar 29, 2005 1:46 am; edited 1 time in total
Posted: Tue Mar 29, 2005 1:42 am Post subject: Re: The Near Term Economic Effects of Peak Oil
MonteQuest wrote:
(...)How chaotic will this transformation get? And remember, we are not talking about shortages yet, just higher prices. This transition period may last sometime, perhaps years, before we see the signs of a real die-off, and then it will be those who are the most weak and dependent upon others. I think more might die due to conflict than anything else. They sure fought in the gas lines I was in during the gas crisis of the 1970’s.
Well, I've been wondering how much longer it will be until there are sporadic regional shortages of gas in the US. Forget higher prices. If supply and demand continue the way they've been going, or if for whatever reason the US gets a smaller piece of the pie (seems likely) there will be shortages.
That's when things may get interesting.
Reading the IEA report on rationing makes me think we may be very
close to the point of shortages. That plus any sort of financial chaos
or collapse, and things could get interesting very quickly.
As far as saving cost, a few of the obvious ways are food (not going out to eat, cooking at home) and travel - less of it. So this will have an impact on a large part of the economy. Of course if the price of gas continues to rise, people will still do the driving they've got to do (those that can afford it) but there will considerably less unnecessary travel I'd guess.
Beyond that really hard to say. I've got to wonder just how much
control the government and IEA will have -- such as enforcing driving bans, etc. Perhaps for a little bit, but once people start to realize oil scarcity and prices will only be increasing all hell may break loose.
Posted: Tue Mar 29, 2005 2:33 am Post subject: You asked for patterns...
In the United States, it seems like everybody is buying up homes. And, I've seen new subdivisions put up near highways. Well, the thing that I've seen is that every family needs a house. And my older two brothers both have or will shortly have families - one will no doubt be very 'successful' as a doctor, but the other has $10/hour job at a music store and has had a few bands play gigs and such in Chicago. I think the most commonly thing we will see is that families will start bunching up in a single house like my brother has done (Even right now, this is relatively common, but I mean on the long-term - forced or co-erced by the energy/money shortage.)
Although, I think this is kind of interesting - it's kind of the first step towards the people understanding the macroscopic problem on a personal level.
People I think will blame it on the war on Iran in combination to the housing bubble. Oh yeah, we'll have alot blame on other sources. We'll blame everything but us.
We have already reduced our excursions to restaurants and bars.
I will no longer buy useless plastic toys for my children. Wooden toys, books and jigsaws as well as exercise equipment like trampolines and swings are what the kids are getting from now on. Those boys need to be hardened up for the coming tribulations.
Stock up on essentials like CFL lightbulbs, bottled gas for cooking etc. while the prices are low.
Medium term I agree with Elijah that conservation and cutbacks will take a lot of the sting out of the tail. And I hope upon hope that world governments get together to stop population growth because this is the only thing that will make a lasting mitigating effect against the worst aspects of PO. _________________ www.askaboutenergy.com
I agree with Elijah that conservation has great potential. What I'm worried about is the fact that the people who have a lot of 'slack to pull in' on their energy consumption, are also the ones that are well off. They're not gonna start cutting down until prices get really high. By that time the people who are already conserving (not because of energy shortage, but 'cause they have a hard time paying the bills) will be out on the streets. Add to that everyone who will lose their jobs in the travel and leisure industries. I doubt these millions of people are gonna sit around and accept the situation... Then again, Americans never cease to amaze me with the crap they put up with from their government
I wouldn't cut now down on youre restaurant. Enyou while you can. You see when peak oil is there and the economy will be sputtering, then we will have money devaluating. That means that somebody who had 100.000$ would suddenly find out that he can't buy that much with 100.000$
I'm saving my money to buy some place just when the first crisis hits.
I have been trying to investigate the subject, and I'm convinced that what happened in the seventies is the best model for the near future. But I haven't been able to find any source that explained in any detail what happened to the economy in the seventies, apart from generic comments about inflation. Has anybody found more in-depth information?
I think we'll be surprised how much we can conserve and how this will forestall the most painful effects of Peak Oil for some number of years.
I think most of us could easily cut our energy use by 10-20% without feeling significant pain. The effect on world oil supplies would be dramatic.
We do start doing things like carpooling, using public transit, switching to high MPG cars and motorcycles, even walking and bicycling more. Not to mention turning the thermostate down or up a few degrees, taking shorter showers, using low wattage bulbs and flat-screen computers, etc., etc. The opportunities are practically endless.
So much of the unnecessary energy we consume is used just because it is so cheap. When it's not so cheap, we'll adapt.
I know, I know, that will only get us a temporary reprieve, but I don't think we should underestimate its potential to buy time. Meanwhile economic activity will shift from SUVs and other high energy consumption goods and activities to energy-saving goods and activities, so it's not like the economy will crash, but it will transition in the near-intermediate term.
One of the problems I see is that we have a really sad public transportation system as a whole in the US..I believe we can do all the conservation and I believe they have technology to ensure cars could get much better mileage if they so chose to roll it out. Even if we chose a large scale project as a country to create a great public transportation system, where would the money come from? I don't see it happening though and I share Monte's vision of probable events.
Joined: Feb 26, 2005 Posts: 107 Location: By the river
Posted: Tue Mar 29, 2005 6:42 am Post subject:
The first thing that would be cut at my house is satelite tv. Then the cell phones, then home phone and internet . last to go would be electric and trash service. We are already on a tight budget, so I don't have any "eating out" money to save.
How many layoffs will there be when DirecTV or Cingular feel the pinch of our collective pennies? How will those people adjust to having no job and no hope of finding another? The economic impact will be felt before an oil shortage. I can limit my driving more, saving the fuel budget for dh to go to work. I can turn off services, adding money if fuel prices spike. I can live well without cell phones or 500 channels of tv.
I wanted to add....hybrid cars are great, and so are flat screen tv's and monitors. So which of the advocates of these will buy one for me? If my budget is tight already, how can I afford to buy a new car, or even a new tv? Lightbulbs I can manage, thanks, lol. I must live well below the means of most people posting here, and so does everyone I know. I have to make do with what I have. Thinking about getting rid of my old but paid for vehicles is not an option.
The comments about people making a living out of our wastefulness are spot on the money & part of the problem. Surplus makes more surplus, so if we cut back on our surplus spending, whether by design or necessity, then we free up those surplus workers. To help this make sense, in 1979 when I left school I could not get a job, because there was a recesion & there were no jobs to be had. People stopped planning babies because money was tight & there were no prospects for their offspring etc.
After 25years of fairly continuous growth & a migration of many millions of people around the world to fill the low paid jobs in the western world, that the locals did not want to do. The locals have had kids again, but the birth rate has never really recovered from the 70's & 80's economic shocks, even with a more promiscuous society. What did change was the cash surpluses, such that many new niche & fringe jobs were created. The problem with recession & depression, is that there is no answer as to what to do with the unemployed when the surpluses that fuled their existence has evaporated.
There will be massive clamp downs on immegration to all modern western nations. In the USA I'd expect the Mexican border to become a free fire zone line the Berlin wall was. Instead of nice border guards arresting or trying to discourage people from crossing in to US, there will be armed guards in watch towers shooting perpetrators.
This is likely to be followed up with forced repatriation or deportation of both illegal & legal perceived "non local" persons, this will free up remaining low end jobs for the unemployed locals. When you have choices you make them, when you have none you take what you can get !
After a couple of generations, the surplus bodies will either be dead or exported to die. An alternative would be work camps or labour camps, based loosely on "slavery". In the uK there used to be work houses, which were basically camps where destitute people were sent or voluntarily entered. They were given basic needs accomodation & fed in exchange for work. They provided worse conditions than todays prisoners are subject to.
The best option would be for the government to control/stop immigration & enforce birth control this would allow natural attrition (as our global corporates are fond of) to free up work space for the unemployed. If as noted above, the cuts could add 17years to to the time frame, a static population could experience resonable population decline if very limited births were permitted & no immigration !
Reduced spending on expensive healthcare for termally ill patients & a major reduction in foreign aid would solve a lot of the population problems in other parts of the world. It is interesting to note that the third world still has increasing populations, primarily fuelled by our handouts & assistance.
I'd expect to see corporal punishment become the nor rather than incarseration with a major step up in the application of the death penalty. The would not add significant deterent to crime, but would greatly reduce overheads in running prisons !
As the Honda advert goes "can hate be good, can hate be great" the answer is a definative yes when applied to population reduction. For 2 or 3 generations we will have surplus bodies running around, then the birth reductions will kick in & we will see less & less young people, that will in turn lead to more job losses on the childcare, education, clothing etc & so it goes on. A deep downward spiral.
If the cuts etc gain 17years & it starts in 2 or 3 years, then that will suit me fine, as I'll be to old to care by then _________________ The roller coaster is still climbing, but it's near the top now !
Where there's a WAR there's a WAY
The comments about people making a living out of our wastefulness are spot on the money & part of the problem. Surplus makes more surplus, so if we cut back on our surplus spending, whether by design or necessity, then we free up those surplus workers. To help this make sense, in 1979 when I left school I could not get a job, because there was a recesion & there were no jobs to be had. People stopped planning babies because money was tight & there were no prospects for their offspring etc.
After 25years of fairly continuous growth & a migration of many millions of people around the world to fill the low paid jobs in the western world, that the locals did not want to do. The locals have had kids again, but the birth rate has never really recovered from the 70's & 80's economic shocks, even with a more promiscuous society. What did change was the cash surpluses, such that many new niche & fringe jobs were created. The problem with recession & depression, is that there is no answer as to what to do with the unemployed when the surpluses that fuled their existence has evaporated.
There will be massive clamp downs on immegration to all modern western nations. In the USA I'd expect the Mexican border to become a free fire zone line the Berlin wall was. Instead of nice border guards arresting or trying to discourage people from crossing in to US, there will be armed guards in watch towers shooting perpetrators.
This is likely to be followed up with forced repatriation or deportation of both illegal & legal perceived "non local" persons, this will free up remaining low end jobs for the unemployed locals. When you have choices you make them, when you have none you take what you can get !
After a couple of generations, the surplus bodies will either be dead or exported to die. An alternative would be work camps or labour camps, based loosely on "slavery". In the uK there used to be work houses, which were basically camps where destitute people were sent or voluntarily entered. They were given basic needs accomodation & fed in exchange for work. They provided worse conditions than todays prisoners are subject to.
The best option would be for the government to control/stop immigration & enforce birth control this would allow natural attrition (as our global corporates are fond of) to free up work space for the unemployed. If as noted above, the cuts could add 17years to to the time frame, a static population could experience resonable population decline if very limited births were permitted & no immigration !
Reduced spending on expensive healthcare for termally ill patients & a major reduction in foreign aid would solve a lot of the population problems in other parts of the world. It is interesting to note that the third world still has increasing populations, primarily fuelled by our handouts & assistance.
I'd expect to see corporal punishment become the nor rather than incarseration with a major step up in the application of the death penalty. The would not add significant deterent to crime, but would greatly reduce overheads in running prisons !
As the Honda advert goes "can hate be good, can hate be great" the answer is a definative yes when applied to population reduction. For 2 or 3 generations we will have surplus bodies running around, then the birth reductions will kick in & we will see less & less young people, that will in turn lead to more job losses on the childcare, education, clothing etc & so it goes on. A deep downward spiral.
If the cuts etc gain 17years & it starts in 2 or 3 years, then that will suit me fine, as I'll be to old to care by then
Your world sound like and Orwellian nightmare. The Rich will be turned on long before that in this country. I don't know about England but we will have a lot of broke, starving and HEAVILY Armed citizens.
All times are GMT - 6 Hours Goto page 1, 2, 3 ... 17, 18, 19Next
Page 1 of 19
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
. last to go would be electric and trash service. We are already on a tight budget, so I don't have any "eating out" money to save.
