Whew. You scared me there for a minute. I ran out to see if I could still get gas for $3 a gallon and I can. Guess it isn’t here yet. Production may be near peak, but like I said earlier, price dynamics, replacements, and demand-side changes could have a major impact on availability.
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We hit a ceiling from 2005-2008. It was observable. Oil price spiked with no increased production and then demand fell and price subsided. There is no reason elevated prices should maintain elevated if demand falls, obviously. This has no bearing on the state of geological affairs and timing of peak because price is a short term indicator. It has no idea on how much is in the tank. Obviously, we have less oil than we did in 2008, so why the lower price? Because the price point mechanism has no foresight. It is a very crude(no pun intended), blind, one dimensional and shortsighted tool. Kind of like using a chain saw for surgery.
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In my last post, I mention Jay Forrester. He has been looking at this problem since 1969. Not really going to sneak up on him. World governments know it is going to happen and have for years. I’m loath to put my faith in them over entrepreneurs.
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The governments and big industry are one in the same and have known about it since the 50s. Jay Forrester drew from M. King hubberts work. It came out last year that the IEA was pressured by the Bush Admin to downplay there findings. Which was peak was closer than advertised. The Bush admin was a who’s who of the oil industry. Reason the whistle blower gave: They did not want to panic the markets. Basically it was the industry hiding information. But hey they were drawing a usg paycheck so we will chalk it up to government intervention.
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You said that to the wrong person. I speak both thermodynamics and economics – with a BS in Elec. Eng and MS in Engineering Economic Systems, not many people in the world are better suited to understand the relationship between science, technology, economics and business.
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Market theory and economics is not rooted in any science. It’s just a man made theory that has little relevance on the natural state of the world. It’s a belief system with math. A belief system with endless contradictions and tragic assumptions, at that.
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It is virutally impossible for me to separate technological solutions and economic solutions. They are one and the same. ‘Cept it is economics that drives solutions into existence, and those economics are not yet upon us. Peak Oil may or may not be here, but the economic drivers are not. We’ll still be having this same discussion in 2020 and possibly 2030.
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Correlation does not imply causation. you don’t need governments, economics or money to innovate. Just human creativity.
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The thing is, no matter how economists view the world, people make economics happen no matter what. People collectively make millions of decisions made every day. Even now, thousands of crackpots are trying to invent solutions to the problem. I have faith in them.
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And if economic “theory” fails will you lose the faith or claim heresy. It’s not a technological problem. It’s an economic one. Meaning economics will fail to bring a solution. I have plenty of faith in human ingenuity but none in economic theory because it has no physical foundations.
axiom: It impossible to maintain infinite growth on a finite planet. Until that is understood in economics we are running into Forrestors limits of growth. It’s a choice.
