7 ms·

What a World Without Oil Looks Like

68 points by kafkaesq 11y ago

crpatino 11y ago
TL;DR If we just ignore the energy sector (and close our eyes very, very tight), the economy looks rosier than ever.
- ihsw 11y ago
  I think it's important to note that this intellectual exercise obviates the fact that our reliance on energy resources is as dangerous to the environment as it is to our economy.
  - douche 11y ago
    Do we need to have the obligatory comments on every story about the petro-chemical sector that this is all Very Bad For The Environment™ "Resources exist to be consumed. And consumed they will be, if not by this generation then by some future. By what right does this forgotten future seek to deny us our birthright? None I say! Let us take what is ours, chew and eat our fill." - CEO Nwabudike Morgan "The Ethics of Greed"
    - XorNot 11y ago
      Yes. Morgan's faction (all the factions really) were not meant to be healthy desirable models of future civilization. Americans who decry environmentalism and the EPA don't seem to be clamoring to say "there's nothing wrong with Beijing's air"
      - mikeash 11y ago
        I've seen one or two saying that when the topic is brought up. None who have actually been to Beijing, I think.
    - kafkaesq 11y ago
      Stabilize carbon, ocean temperatures and acidity levels, forest depletion, and species collapse -- within our current generation, please. Then you can chide people for being overly moralistic.
    - rybosome 11y ago
      Being of the opinion that climate change has the potential to become an existential threat to humanity in spite of the fact that we are still debating whether or not it exists, I feel that it's appropriate to raise the issue in most conversations about fossil fuels. > "Resources exist to be consumed. And consumed they will be, if not by this generation then by some future." Researchers at University College London published a study in Nature[0] which determined that a significant portion of the remaining fossil fuel resources must _not_ be used if we are to avoid crossing one of the major thresholds of climate change. This isn't about morality, it's about the survival and prosperity of future generations. [0]: http://www.theguardian.com/environment/2015/jan/07/much-worlds-fossil-fuel-reserve-must-stay-buried-prevent-climate-change-study-says http://www.theguardian.com/environment/2015/jan/07/much-worl...
      - leereeves 11y ago
        Unfortunately the full article is behind a paywall, but I wonder how many assumptions the authors must have made to specify not only the amount of carbon that can be released, not only the balance of coal, oil, and gas that can be consumed, but the regional distribution of that consumption. Sounds more like politics than science, and neither the Guardian article nor the abstract explain the reasoning why some carbon is ok and other carbon must be kept below ground. Are we meant to merely accept it on authority? And why 2C? A number that round almost certainly has no scientific significance, and was probably chosen for psychological and political reasons. It's a completely arbitrary target, but we are meant to feel fear that we won't meet it. Articles like this give people who aren't inclined to believe in climate change more reason to suspect it's a scam (something I've often heard them claim).
  - ArkyBeagle 11y ago
    Differentially ( IOW, all other things being equal ), higher energy prices favor better environmental behavior.
    - JabavuAdams 11y ago
      Not on the production side. Tar sands, etc.
      - ArkyBeagle 11y ago
        Yeah, there's that. Ideally, we'd be able to price all that in. The messes on the production side are arguably more tractable than CO2.
- legulere 11y ago
  Also then the US still hasn't recovered from the financial crisis and it will take a few years more.
  - theandrewbailey 11y ago
    Which sounds right when you consider all the people who would love to work, but haven't for years and aren't counted in the unemployment number everyone points to.
    - deleted 11y ago
      [deleted]
    - deleted 11y ago
      [deleted]
    - jfoutz 11y ago
      The us unemployment number is dumb. However, if they'd love to work, why aren't they looking for work?
      - laotzu 11y ago
        They gave up because of general lack of opportunity.
      - mikekchar 11y ago
        Possibly a different example can shine some light on the matter. Imagine getting a group of people who are over 30 and do not have a significant other. Then say, "Those people who have not gone on a date in the last 4 weeks are not single because they don't want to have someone in their lives". Imagine a telling a group of obese people "Those people who have not gone on a diet in the last 4 weeks are not overweight because they don't want to be slim". "Anyone who has not had an address in 4 weeks is not homeless because they do not desire a home". You can probably imagine hundreds more scenarios. When faced with repeated failure, many people fail to act in their own interests. In fact, I don't think the unemployment number is necessarily dumb -- it measures the number of unemployed people who have not given up hope of working. But we really need a measure of all the people who have given up hope, but still want to work. What's unfortunate is the attitude that your question implies (and I'm not actually suggesting that you have this attitude, though it is very common): it is easy to think that people who have given up want the failure that they now experience. Normally this is not the case. I once saw a homeless person trying to explain to someone their predicament. I don't remember their exact words, but it was something like this: "It's -5 degrees C today. I live in a cardboard box on the side walk. Do you really think that I wouldn't rather sleep in a warm bed? But I've got a lot of problems and this is the best that I can do right now." Followed by considerable profanity (probably their case would have been easier to follow for the listener had that been omitted).
jchin 11y ago
I clicked thinking it was about that 2007 augmented reality game by Jane McGonigal. http://www.worldwithoutoil.org/metahome.htm http://www.worldwithoutoil.org/metahome.htm
Lazare 11y ago
The headline is very, very misleading. What's being discussed here is not what a world without oil would look like, but "what would the economy look like if we pretend the energy sector doesn't exist, but we're still somehow getting oil from magical fairies". If you were looking at the performance of the US economy lately and going "huh, it keeps going up and down, but some of that is 'cause of oil prices changing, what would it look like if they hadn't?" then this is the article for you. If you were thinking about literally any other question (and especially the question of what the world might look like without oil) then this will be a puzzling waste of time; the payoff is just a graph of US industrial production over time excluding the energy sector. (Spoiler: Recent fall in oil prices has not been good for the energy sector, but has been good for the rest of the economy, so if you pretend that the energy sector doesn't exist, then the "economy" looks better. Also, if you pretend that the unemployed don't exist, the unemployment rate is amazing. On the other hand, if you pretend Canada doesn't exist, it raises some very troubling concerns about maple syrup supplies. In other words, this is pretty fucking pointless.)
- Zigurd 11y ago
  It's not so useless. It's one exercise in why broad indices can be misleading. Creating value in energy production is good, up to a point, and that point depends on whether you are an exporter or not. But if energy becomes a too-large part of the economy it does so at the expense of the rest of the economy. The same can be said about health care: Health is good. So spending on health care is good. Until it exceeds what other nations pay to get the same health. Similarly, a healthy financial sector is good, unless it drifts into excessive financialization. Illustrating how one economic sector becomes a vampire is useful because it illustrates how raw GDP can hide vampires that suck the blood out of quality of life.
  - ArkyBeagle 11y ago
    Who gets to say what "too big" is? I'd rather see a healthy energy sector than the continued eclipsing of everything else by finance. Health care will eat everything now anyway. Medicaid is going to be the real estate purchaser of last resort - if you live long enough to outrun Medicare, the State (not the Federal gov't ) will get your house. No amount of estate planning will prevent it. High energy prices could be quite useful right now - we'd seen actual drops in measures proportional to carbon being added to the atmosphere. I'd rather see that done in the market than by government fiat. It is just that government fiat takes a couple-three generations to get calibrated. And I have a really funny feeling about your "at the expense of the rest of the economy". I didn't buy that in the 1980s and I don't buy it now. We're not exactly seeing an explosion on consumer spending.
roymurdock 11y ago
Warning: autoplaying video w/ sound on. Here is the main takeaway: YoY EPS Growth S&P 500 With Energy: -2% S&P 500 W/out Energy : 5% "We commonly hear that corporate earnings are 'rolling over,'" wrote the analysts. "It may be more accurate to say that commodity sector earnings are collapsing, while profits for the remainder of the market are still posting moderate growth." These short Bloomberg pieces have truly perfected the art of explaining nothing but looking like its explaining something, then slapping a clickbait title on top of everything. They've stripped out 3 quotes from an analyst report that they don't bother linking to, and tenuously tied together brief blurbs on the industrial production index, EPS growth, and core inflation without explaining any of them in a satisfactory manner.
- tomc1985 11y ago
  > without explaining any of them in a satisfactory manner. Welcome to finance... Financial feels so full of decoy material, designed to keep minds weak and preoccupied so the elites can do their thing without interference...
  - kaybe 11y ago
    Does anybody know better sources?
    - tomc1985 11y ago
      The hardest part is recognizing the good material from the bad. In my experience its less about feeding for information from a single source, and more about separating useful market information from stories full of chaff. Advice can be tricky but IMO the best information are plain, boring whiteboard lectures explaining investment fundamentals. (This guy, who I've enjoyed a few of his tutorials, as one example: https://www.youtube.com/user/MoneyWeekVideos https://www.youtube.com/user/MoneyWeekVideos) I avoid fruity, feel-good financial gurus because I see a lot of the same mannerisms and personality types as I encountered amongst the con artists in the 'financial seminar' and MLM scenes. Also, market commentaries from conservative brokerages are good for figuring out the macro picture
exabrial 11y ago
Yah, because we don't need plastics or synthetics. We don't need lubricants for electric motors. We don't need coolant, we don't need lightweight composites and we don't need solvents. Where do you think all this stuff comes from?
- samstave 11y ago
  You're missing the point! GS is basically saying we should all invest in Amish.io!!!
- jfoutz 11y ago
  Had a tough time finding the statistic, maybe it has changed a bit since 2009 [1]. It seems like those uses are a tiny fraction of what we use oil for. Transportation is like 70% of the usage. 1 cent worth of lubricant turning into 10 cents worth of lubricant doesn't seem like a big deal when you buy a $10 electric motor. Oil got expensive. People and industry got more efficient at using oil. Oil is cheap. who cares? we're much more efficient at using oil. The painful part is switching to 30mpg cars. To put it another way, pre-boom you budget $100/month. gas gets expensive, and turns out to be $200/month. People carpool, or turn down the thermostat, or get a more efficient car, to get back to the $100/month budget. Gas prices, fall so under the new system it's only $50/month.[2] That $50 is nice, but not as nice as that $100 was painful. [1] http://alternativeenergy.procon.org/view.resource.php?resourceID=001797 http://alternativeenergy.procon.org/view.resource.php?resour... [2] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0_PTE_NUS_DPG&f=M https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=E...
  - exabrial 11y ago
    You're right! Much like helium, we burn away an important resource. It cracks me up still we tax (non-fuel) uses of oil.
- djcapelis 11y ago
  > Yah, because we don't need plastics or synthetics You know there are other non-petroleum oils that can provide some of these needs, right? As for lubricant uses, looks like that can work too: http://www.sciencedirect.com/science/article/pii/S0020740311000919 http://www.sciencedirect.com/science/article/pii/S0020740311...
kwoff 11y ago
There seem to be a lot of bloomberg articles recently.
erikb 11y ago
Didn't understand at all how a world without oil looks like. How is the title even connected to the article? The article talks about all these commodities, including electricity and co, not just oil. And there is nothing about how any world looks like it just describes how to analyse numbers differently.
kmonsen 11y ago
This is what the world looks like with abundant cheap oil, not what it looks like without oil.
dovdov 11y ago
Coal it is then.

68 points by kafkaesq 11y ago

crpatino 11y ago

TL;DR If we just ignore the energy sector (and close our eyes very, very tight), the economy looks rosier than ever.

ihsw 11y ago
I think it's important to note that this intellectual exercise obviates the fact that our reliance on energy resources is as dangerous to the environment as it is to our economy.
- douche 11y ago
  Do we need to have the obligatory comments on every story about the petro-chemical sector that this is all Very Bad For The Environment™ "Resources exist to be consumed. And consumed they will be, if not by this generation then by some future. By what right does this forgotten future seek to deny us our birthright? None I say! Let us take what is ours, chew and eat our fill." - CEO Nwabudike Morgan "The Ethics of Greed"
  - XorNot 11y ago
    Yes. Morgan's faction (all the factions really) were not meant to be healthy desirable models of future civilization. Americans who decry environmentalism and the EPA don't seem to be clamoring to say "there's nothing wrong with Beijing's air"
    - mikeash 11y ago
      I've seen one or two saying that when the topic is brought up. None who have actually been to Beijing, I think.
  - kafkaesq 11y ago
    Stabilize carbon, ocean temperatures and acidity levels, forest depletion, and species collapse -- within our current generation, please. Then you can chide people for being overly moralistic.
  - rybosome 11y ago
    Being of the opinion that climate change has the potential to become an existential threat to humanity in spite of the fact that we are still debating whether or not it exists, I feel that it's appropriate to raise the issue in most conversations about fossil fuels. > "Resources exist to be consumed. And consumed they will be, if not by this generation then by some future." Researchers at University College London published a study in Nature[0] which determined that a significant portion of the remaining fossil fuel resources must _not_ be used if we are to avoid crossing one of the major thresholds of climate change. This isn't about morality, it's about the survival and prosperity of future generations. [0]: http://www.theguardian.com/environment/2015/jan/07/much-worlds-fossil-fuel-reserve-must-stay-buried-prevent-climate-change-study-says http://www.theguardian.com/environment/2015/jan/07/much-worl...
    - leereeves 11y ago
      Unfortunately the full article is behind a paywall, but I wonder how many assumptions the authors must have made to specify not only the amount of carbon that can be released, not only the balance of coal, oil, and gas that can be consumed, but the regional distribution of that consumption. Sounds more like politics than science, and neither the Guardian article nor the abstract explain the reasoning why some carbon is ok and other carbon must be kept below ground. Are we meant to merely accept it on authority? And why 2C? A number that round almost certainly has no scientific significance, and was probably chosen for psychological and political reasons. It's a completely arbitrary target, but we are meant to feel fear that we won't meet it. Articles like this give people who aren't inclined to believe in climate change more reason to suspect it's a scam (something I've often heard them claim).
- ArkyBeagle 11y ago
  Differentially ( IOW, all other things being equal ), higher energy prices favor better environmental behavior.
  - JabavuAdams 11y ago
    Not on the production side. Tar sands, etc.
    - ArkyBeagle 11y ago
      Yeah, there's that. Ideally, we'd be able to price all that in. The messes on the production side are arguably more tractable than CO2.
legulere 11y ago
Also then the US still hasn't recovered from the financial crisis and it will take a few years more.
- theandrewbailey 11y ago
  Which sounds right when you consider all the people who would love to work, but haven't for years and aren't counted in the unemployment number everyone points to.
  - deleted 11y ago
    [deleted]
  - deleted 11y ago
    [deleted]
  - jfoutz 11y ago
    The us unemployment number is dumb. However, if they'd love to work, why aren't they looking for work?
    - laotzu 11y ago
      They gave up because of general lack of opportunity.
    - mikekchar 11y ago
      Possibly a different example can shine some light on the matter. Imagine getting a group of people who are over 30 and do not have a significant other. Then say, "Those people who have not gone on a date in the last 4 weeks are not single because they don't want to have someone in their lives". Imagine a telling a group of obese people "Those people who have not gone on a diet in the last 4 weeks are not overweight because they don't want to be slim". "Anyone who has not had an address in 4 weeks is not homeless because they do not desire a home". You can probably imagine hundreds more scenarios. When faced with repeated failure, many people fail to act in their own interests. In fact, I don't think the unemployment number is necessarily dumb -- it measures the number of unemployed people who have not given up hope of working. But we really need a measure of all the people who have given up hope, but still want to work. What's unfortunate is the attitude that your question implies (and I'm not actually suggesting that you have this attitude, though it is very common): it is easy to think that people who have given up want the failure that they now experience. Normally this is not the case. I once saw a homeless person trying to explain to someone their predicament. I don't remember their exact words, but it was something like this: "It's -5 degrees C today. I live in a cardboard box on the side walk. Do you really think that I wouldn't rather sleep in a warm bed? But I've got a lot of problems and this is the best that I can do right now." Followed by considerable profanity (probably their case would have been easier to follow for the listener had that been omitted).

jchin 11y ago

I clicked thinking it was about that 2007 augmented reality game by Jane McGonigal. http://www.worldwithoutoil.org/metahome.htm http://www.worldwithoutoil.org/metahome.htm

Lazare 11y ago

The headline is very, very misleading. What's being discussed here is not what a world without oil would look like, but "what would the economy look like if we pretend the energy sector doesn't exist, but we're still somehow getting oil from magical fairies". If you were looking at the performance of the US economy lately and going "huh, it keeps going up and down, but some of that is 'cause of oil prices changing, what would it look like if they hadn't?" then this is the article for you. If you were thinking about literally any other question (and especially the question of what the world might look like without oil) then this will be a puzzling waste of time; the payoff is just a graph of US industrial production over time excluding the energy sector. (Spoiler: Recent fall in oil prices has not been good for the energy sector, but has been good for the rest of the economy, so if you pretend that the energy sector doesn't exist, then the "economy" looks better. Also, if you pretend that the unemployed don't exist, the unemployment rate is amazing. On the other hand, if you pretend Canada doesn't exist, it raises some very troubling concerns about maple syrup supplies. In other words, this is pretty fucking pointless.)

Zigurd 11y ago
It's not so useless. It's one exercise in why broad indices can be misleading. Creating value in energy production is good, up to a point, and that point depends on whether you are an exporter or not. But if energy becomes a too-large part of the economy it does so at the expense of the rest of the economy. The same can be said about health care: Health is good. So spending on health care is good. Until it exceeds what other nations pay to get the same health. Similarly, a healthy financial sector is good, unless it drifts into excessive financialization. Illustrating how one economic sector becomes a vampire is useful because it illustrates how raw GDP can hide vampires that suck the blood out of quality of life.
- ArkyBeagle 11y ago
  Who gets to say what "too big" is? I'd rather see a healthy energy sector than the continued eclipsing of everything else by finance. Health care will eat everything now anyway. Medicaid is going to be the real estate purchaser of last resort - if you live long enough to outrun Medicare, the State (not the Federal gov't ) will get your house. No amount of estate planning will prevent it. High energy prices could be quite useful right now - we'd seen actual drops in measures proportional to carbon being added to the atmosphere. I'd rather see that done in the market than by government fiat. It is just that government fiat takes a couple-three generations to get calibrated. And I have a really funny feeling about your "at the expense of the rest of the economy". I didn't buy that in the 1980s and I don't buy it now. We're not exactly seeing an explosion on consumer spending.

roymurdock 11y ago

Warning: autoplaying video w/ sound on. Here is the main takeaway: YoY EPS Growth S&P 500 With Energy: -2% S&P 500 W/out Energy : 5% "We commonly hear that corporate earnings are 'rolling over,'" wrote the analysts. "It may be more accurate to say that commodity sector earnings are collapsing, while profits for the remainder of the market are still posting moderate growth." These short Bloomberg pieces have truly perfected the art of explaining nothing but looking like its explaining something, then slapping a clickbait title on top of everything. They've stripped out 3 quotes from an analyst report that they don't bother linking to, and tenuously tied together brief blurbs on the industrial production index, EPS growth, and core inflation without explaining any of them in a satisfactory manner.

tomc1985 11y ago
> without explaining any of them in a satisfactory manner. Welcome to finance... Financial feels so full of decoy material, designed to keep minds weak and preoccupied so the elites can do their thing without interference...
- kaybe 11y ago
  Does anybody know better sources?
  - tomc1985 11y ago
    The hardest part is recognizing the good material from the bad. In my experience its less about feeding for information from a single source, and more about separating useful market information from stories full of chaff. Advice can be tricky but IMO the best information are plain, boring whiteboard lectures explaining investment fundamentals. (This guy, who I've enjoyed a few of his tutorials, as one example: https://www.youtube.com/user/MoneyWeekVideos https://www.youtube.com/user/MoneyWeekVideos) I avoid fruity, feel-good financial gurus because I see a lot of the same mannerisms and personality types as I encountered amongst the con artists in the 'financial seminar' and MLM scenes. Also, market commentaries from conservative brokerages are good for figuring out the macro picture

exabrial 11y ago

Yah, because we don't need plastics or synthetics. We don't need lubricants for electric motors. We don't need coolant, we don't need lightweight composites and we don't need solvents. Where do you think all this stuff comes from?

samstave 11y ago
You're missing the point! GS is basically saying we should all invest in Amish.io!!!
jfoutz 11y ago
Had a tough time finding the statistic, maybe it has changed a bit since 2009 [1]. It seems like those uses are a tiny fraction of what we use oil for. Transportation is like 70% of the usage. 1 cent worth of lubricant turning into 10 cents worth of lubricant doesn't seem like a big deal when you buy a $10 electric motor. Oil got expensive. People and industry got more efficient at using oil. Oil is cheap. who cares? we're much more efficient at using oil. The painful part is switching to 30mpg cars. To put it another way, pre-boom you budget $100/month. gas gets expensive, and turns out to be $200/month. People carpool, or turn down the thermostat, or get a more efficient car, to get back to the $100/month budget. Gas prices, fall so under the new system it's only $50/month.[2] That $50 is nice, but not as nice as that $100 was painful. [1] http://alternativeenergy.procon.org/view.resource.php?resourceID=001797 http://alternativeenergy.procon.org/view.resource.php?resour... [2] https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMM_EPM0_PTE_NUS_DPG&f=M https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=E...
- exabrial 11y ago
  You're right! Much like helium, we burn away an important resource. It cracks me up still we tax (non-fuel) uses of oil.
djcapelis 11y ago
> Yah, because we don't need plastics or synthetics You know there are other non-petroleum oils that can provide some of these needs, right? As for lubricant uses, looks like that can work too: http://www.sciencedirect.com/science/article/pii/S0020740311000919 http://www.sciencedirect.com/science/article/pii/S0020740311...

kwoff 11y ago

There seem to be a lot of bloomberg articles recently.

erikb 11y ago

Didn't understand at all how a world without oil looks like. How is the title even connected to the article? The article talks about all these commodities, including electricity and co, not just oil. And there is nothing about how any world looks like it just describes how to analyse numbers differently.

kmonsen 11y ago

This is what the world looks like with abundant cheap oil, not what it looks like without oil.

dovdov 11y ago

Coal it is then.