[DoomersUnite]

Look again at the graph from the World Bank in your link. It shows clear, short-lived declines in global GDP in 2001 and 1996 (LOOK! The GPD line stops going up and goes down), and also a broader period of decline in 1981-82 (LOOK! The GDP line stops going up and goes down again).

Fair enough. If I squint REAL hard, you are right, I can see just enough of an inflection point to call it a "recession". 81/82 looks just flat.

Why does your original graph pretend there are 6, if there are only 3? What is the point of making up global recessions?

[mos6507]

This chart is always to be followed by this chart--which peakers would rather disappears in the ether.



I think this is the 100th time I've had to post this chart. It's sooo tedious.

[DoomersUnite]

I think this is the 100th time I've had to post this chart. It's sooo tedious.

Thats a good chart. I wonder why anyone confuses the credit crisis with peak oil at all? I have never understood the idea that peak oil caused people to run out and buy more house than they could afford...seems a bit counterintuitive.

[mos6507]

Thats a good chart. I wonder why anyone confuses the credit crisis with peak oil at all?

Because when oil prices tanked down to $30, peakers needed a way to keep the topic relevant. So they had to invent a way to blame the credit crisis on peak oil. At first, peakers kind of went silent, tail between their legs. Then suddenly, the meme was born. The guy who started the ball rolling on the meme was Jeff Rubin, and after that happened, all the rank and file peakers got in line behind him.

And guess what? It didn't work. People became obsessed solely with the jobs and banksters. So peakers should let it go already. And the NEXT oil spike will be skewed partly by speculators, further obscuring the underlying geology.

[Cloud9]

Ok Moss, I believe cheap oil has peaked. I think higher gas prices will result and push the underclass out of automobiles forever. You believe other wise. Neither of us know anything. We simply have our beliefs.

[Plantagenet]

Look again at the graph from the World Bank in your link. It shows clear, short-lived declines in global GDP in 2001 and 1996 (LOOK! The GPD line stops going up and goes down), and also a broader period of decline in 1981-82 (LOOK! The GDP line stops going up and goes down again).

Fair enough. If I squint REAL hard, you are right, I can see just enough of an inflection point to call it a "recession". 81/82 looks just flat.

Thank you.

[mos6507]

Ok Moss, I believe cheap oil has peaked. I think higher gas prices will result and push the underclass out of automobiles forever. You believe other wise. Neither of us know anything. We simply have our beliefs.

How do you know I believe otherwise? All we're arguing about is timeframe, not the basic facts of geologic depletion.

That's another logical fallacy that bugs me, the tendency among peakers (pstarr is the poster child of this) to treat "peak oil caused the credit crisis" as an ideological litmus test for peak oilers.

Since I don't follow the group-think, I must be a corny.

Hardly.

I think conventional oil has peaked, just as the IEA says. That doesn't mean I think this runup in oil is "the big one" ala Matt Simmons Chicken Little act in 2008. This recent runup may be another head-fake by virtue of speculation. Look at the longer trendlines and you can see it going up somewhat gradually. Part of that is the rise of Chinda and depletion. It's not ALL speculation or ALL geology.

What I keep rejecting is this simplistic chart watching that The Oil Drum established years ago. That went out the window when oil tanked in 2008.

The fact of the matter is there is still some spare capacity in Saudi Arabia. They aren't using it all yet. There is probably a $10-15 speculative premium on oil right now. KSA wants oil at a higher price threshold than in the past. That's not nice for us, but it is what it is. If oil shoots up to $120 or above, then most of that will represent a speculative premium. It all has to do with how fast it goes up when the supply/demand equation is still relatively fixed.

I think the UK Taskforce warnings are probably right on the money with their predictions of a 2013-2015 timeframe for a geologically-induced superspike. We may see oil spike before then, but it will be artificially driven via speculation. Obviously we still have to DEAL with it regardless of the cause, just as we had to deal with above-ground factors via the oil embargoes, but with bubbles, what goes up must come down, as investors cash out.

[Arthur75]

That's another logical fallacy that bugs me, the tendency among peakers (pstarr is the poster child of this) to treat "peak oil caused the credit crisis" as an ideological litmus test for peak oilers.

Basically I think that's true, you shouldn't forget that it isn't only a price peak, but a constant price rise since 2002 more or less, and from $20 to $147, of course the US real estate bubble fueled by cazy credit also had its own problems, but you could also say that its main problem was precisely the belief in a constant growing flow of cheap energy and associated growing economy. Plus Rubin refers to countries going into crisis without major link to the credit crisis, in his 2010 ASPO vid for instance (and the major transfer of money from net importer without much savings to exporter with major saving rates that oil price rise creates, amongst other things):
http://vimeo.com/16190041

Taking the problem in another way :
All major oil price rises created recessions, so why not this one ?

It's quite clear that current crisis, refered to as "healing from the 2008 financial crisis" more or less, is indeed the beginning of the peak oil crisis, and it does start in 2008.

[Plantagenet]

All major oil price rises created recessions, so why not this one ?

I don't think Mos accepts that the 2008 recession was triggered by rising oil prices or that "all major oil prices rises" lead to recessions, and of course doomersunite doesn't even accept that there were global recessions (I had to literally take Doomersunite though a plot of a couple of decades of global GDP and point out there were reversals in GDP growth to get a grudging acknowledgement that global recessions had occurred.)

Arthur, I think we agree that economist Jeffrey Rubin's work on the link between rises in oil prices and global recession is useful and important, but Rubin's work is not universally accepted either in the economic community or here at this site.

[Arthur75]

Arthur, I think we agree that economist Jeffrey Rubin's work on the link between rises in oil prices and global recession is useful and important, but Rubin's work is not universally accepted either in the economic community or here at this site.

Yes I don't think any economist is universally accepted anyway, which isn't too suprising as economics is a lot of things but not a science for sure, but basically Rubin is right on this one I think (we would need several earth, world economies, and histories to test the thing !)

[Plantagenet]

I don't think any economist is universally accepted anyway, which isn't too suprising as economics is a lot of things but not a science for sure, but basically Rubin is right on this one I think (we would need several earth, world economies, and histories to test the thing !)

The way things are going, we are going to get another cycle of high oil prices and a concomitant recession to test it.

[Xenophobe]

I don't think any economist is universally accepted anyway, which isn't too suprising as economics is a lot of things but not a science for sure, but basically Rubin is right on this one I think (we would need several earth, world economies, and histories to test the thing !)

The way things are going, we are going to get another cycle of high oil prices and a concomitant recession to test it.

Cool! That would validate the "double dip follows peak oil" hypothesis which follows from the 1979 peak oil! Love it when history is predictive that way.

[Plantagenet]

...the 1979 peak oil! ...

[Xenophobe]

...the 1979 peak oil! ...

Hey, YOU might not like the idea, but from a 1983 vantage point, it was downright terrifying!

[sparky]

.
Peak Oil is no phantom , it's an irresistible fact .
Doom is certain but it's going to be a decades long process ,
some might be fooled into thinking the nerds once more will work something out
Not really ,
thermodynamic is a bitch
and the Carnot cycle is the two hundred year old last word on thermal engines
Some might think a great readjustment is possible
keep dreaming
some might see a mad max movie , that's not how things work out in the real world
there always is dominance structures , it's a tax on being left in peace

we , or the next generation are doomed , so smile now enjoy and meditate my old man wisdom
enjoy today ,no matter how bad things are , they always can get worst

[Arthur75]

That's another logical fallacy that bugs me, the tendency among peakers (pstarr is the poster child of this) to treat "peak oil caused the credit crisis" as an ideological litmus test for peak oilers.

And by the way I'm always amazed by this deification of logic (or desire of), and beleif in discrete cause and consequences of events in "Anglo saxon" mindset or something.
Here we are much more talking inter relationship between quantities and evolutions pushing in different directions, from a rational perspective it's much more linked to analysis (mathematical sense) and differential equations or complex systems than "logic" ...

[Jenab]

When I consider the effect of fossil fuels depletion on the economy, I think of the game Jenga. That's the game where you build a tower out of little blocks and then start pulling them out from the bottom and placing them up at the top. The tower goes up and up. The base gets more and more unstable. Eventually, one of the players removes the WRONG block (and, at that time, there might not BE any right blocks) and the whole tower comes crashing down. So with the economy. I think things will appear on the surface to be going up and up, while the underpinnings get thinner and unstable. Then the crash.

[bratticus]

OECD current membership: Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.

(live economagic chart)

‘Peak Demand,’ Yes, But Not the Nice Kind
By Chris Nelder
Friday, March 5th, 2010

The last two years have seen the marginal buyers of oil shift decisively to the non-OECD countries. A gallon of fuel delivers so much value in China and India–think peasants on scooters–that even at $120 a barrel, remarkable economic growth rates are possible. ...

The fact is that peak demand in the OECD is not merely a function of efficiency gains and biofuels substitution, aided by a temporary recession.

... peak demand will be the result of a permanent state of increasing depression in which non-OECD countries not only more than make up for the loss of OECD demand, but outbid them for the marginal barrel.

The true import of peak oil, therefore, may not be sustained high prices, but economic shrinkage.

[Revi]

I think that's what's going on now. There are places, like Egypt where people can't afford food any more, and places like the US where a lot of people can't afford to drive any more. It will be a ratcheting up of the price of commodities until it throws a lot of people off. Unfortunately a lot of people have no choice, like the people of Tunisia and Egypt. Food is a giffen good. The price will keep going up because people have to buy it. Here in the US we will pay a lot more for gas because we live in a culture that makes it hard not to have a car. At some point a lot of people will quit driving, or cut down and that's the point when the price will have hit it's peak.