What if peak oil causes a BOOM not BUST?

[snow hope]

Robert Hirsch would disagree,

"The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem. As peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."

"Peak oil is a bigger issue than health care, than federal budget deficits, and so forth. We’re talking about something that, to take a middle of the road position—not the Armageddon extreme and not the la-la optimism of some people—is going to be extremely damaging to the U.S. and world economies for a very long period of time. There are no quick fixes."

"We found that because the decline rate in world oil production was going to be in multiple percents per year, it was going to take a very long time for mitigation to catch up to the decline in world oil production. Basically, the best we found was that starting a worldwide crash program 20 years before the problem hits avoid serious problems. If you started 10 years before-hand, you are in a lot of trouble; and if you wait to the last minute until the problem is obvious, then you’re in deep trouble for much longer than a decade. As it turns out, we no longer have the 10 or 20 years that were two of our scenarios."

(my highlighting)

RGR, you are in la-la land.....

[PS_RalphW]

Also remember that US and Europe and Japan and Australia total less than one billion people. This market is mature. We have had stable to declining per capita oil use for decades. China and India are over 2 billion people between them. They are the economic power houses. They are wealthy, their oil use is exploding. Their demand is going to grow far faster than the west can cut consumption through conservation or substitution.

We are going to be in a bidding war for a declining pool of oil and we are going to lose.

[SunnyJim]

It's the economy stupid!

Understand that the growth of GDP of 2% per year means a doubling of economic activity every 35 years. When you understand that you will realise that that growth cannot continue. It cannot continue because the world will not support enough people to support that growth of GDP. GDP is reliant on people, materials, goods, and services. Most services these days are energy intensive, as is the support of people (via our inefficient food system 5Kcals energy to produce 1Kcal of food), materials (mining) and goods (manufacture). Once we admit that we cannot double population, mineral extraction, manufacture and services every 35 years, you have to understand that the economy cannot continue on the trajectory it has. This will mean a levelling off or more likely a decline in economic activity. In such a climate our money system fails to serve us. It depends on growth to pay back interest. Once growth fails, so does our economic system.

This could result in;

a) inflation devaluing our money making us poorer in 'real terms'. This would occur because the money machine would not recognise that economic activity was failing to keep up with money supply, and would artificially inflate it.
b) deflation. Money disappears in the form of bad loans and is not replaced or added to in order to maintain the illusion of growth.
c) collapse. Let's not go there eh?
d) adaption. The money machine could be adapted to better suit the planet and the people it is supposed to serve.


This is a simplistic view, but you get my point I hope.

[Ludwig]

Also remember that US and Europe and Japan and Australia total less than one billion people. This market is mature. We have had stable to declining per capita oil use for decades. China and India are over 2 billion people between them. They are the economic power houses. They are wealthy, their oil use is exploding. Their demand is going to grow far faster than the west can cut consumption through conservation or substitution.

We are going to be in a bidding war for a declining pool of oil and we are going to lose.

I fear so.

This is what I think the optimists don't understand: there is not going to be a steadily declining amount of oil available to us; all our oil supplies could dry up within weeks of the start of a bidding war.

In addition: even if the Government does manage to get its hands on some oil, think of all the things its money is being diverted from: binmen, doctors, teachers, police... Shudder. All this with tax revenues dropping like a stone.

The more I think about it, the more plausible seems the possibility of total social collapse It may be that whatever our leaders do to mitigate one effect of PO, just amplifies other effects of it.

[emordnilap]

It may be that whatever our leaders do to mitigate one effect of PO, just amplifies other effects of it.

So they will do something?

[RGR]

[quote="snow hope"

[UndercoverElephant]

FC as a fellow optimist (well relatively compared to many on powerswitch) the problem I have with your position is that it is very transport focussed. Peak oil is about so much more than transport. I think we will solve many of the transport issues. But that this alone is not enough.

Neil

It has been common to claim that peak oil is cascading failures starting with the most basic of transportation....moving food from field to market. This then was used to invoke the common "starvation scenario" so popular back before peak oil actually happened and instead of transport problems, we got cheaper gasoline ( at least here in America ).

Once you remove the primarily wasteful use for crude, like random soccer mom transport here in the States....

That is a drop in a tanker compared to the increased consumption in China and the rest of the developing world. They don't "waste" it like it gets wasted in the US.

[RGR]

[quote="UndercoverElephant"]

[snow hope]

RGR, your first point is a silly point, for a whole load of reasons - you make a lot of these.....

Your second point is possibly a fairer point. Maybe you can provide some links to what you assert - specifically the "end of the world" and "claims of doom"?

I am aware of this report from 1996 - it seems pretty much spot on to me.
http://www.pur.com/pubs/1361.cfm

Hirsch has had a lot of experience in the energy industry since the 70s. He has 14 patents and 50 publications in the energy industry field. How does that compare to yourself?

http://en.wikipedia.org/wiki/Robert_L._Hirsch

[Yves75]

The size of this "waste" in the US is larger than all the consumption in China. We could stop this waste and fund with oil ANOTHER China and still save a couple of million barrels a day at the global level.

Yes good point, remembering that :

1) The US is at 19 or 20 MBD
2) China at 7 or 8
3) in developed countries, private transportation and housing heating/cooling constitute more than half of a country fossile consumption (and probably even more when considering only oil)

is quite important

[SunnyJim]

Yes, I'll remember that when global desire to live like Americans has spread globally, and the population hits 9 billion in 2030....

[RGR]

[quote="SunnyJim"]

[mobbsey]

Are the doomers still of the opinion that in such a scenario we will inevitably hit some other limit and crash anyway?

That's not being doomerish, that's just the hard reality of arithmetic:
# population is growing faster than food production
# energy is being used faster than new resources are developed
# fossil water resources are being tapped to keep people alive

That's the problem with the cornucopian view of the world -- it won't wake up to the inevitability of mathematics even when the global underclass starts (euphemistically) "mugging it for food".

I think Bill Hicks summed up the problem in the best way; "stop your internal dialogue, you're wrong".

[nexus]

.....it's always good to quote Bill. I often wish he were still around to comment on what's going on.

[Ludwig]

I think Bill Hicks summed up the problem in the best way; "stop your internal dialogue, you're wrong".

Wow, if there's a t-shirt with that on it, I'm getting it