4 ms·

Oil is the rate limiting reagent for industry, so causation goes the other way. A rapid oil crash is a clear indicator of a slowdown.

by api 11y ago

cubano 11y ago
That is only one side of the equation. Due to rapid technological advances in shale oil extraction (ie fracking), North American companies have radically changed the daily global supply of oil, which of course puts downward price pressure on it. Much of the recent price drop can be defined in terms of Saudi's getting into a price war with these NA companies, trying to push them off the market. Not only that, but this technology is a long-term game changer, ie it will be only a matter of time before all the world oil players (Russia, Venezuela, etc) co-opt this tech and start extracting much cheaper oil from their fields, which of course the markets are anticipating as well.
- api 11y ago
  Hmm... and combine with EVs coming of age, a Moore's Law type growth curve for solar (and solar EROEI), etc., and perhaps the high energy costs of the recent past are gone for a while. I have to admit I'm surprised. I totally bought the idea that oil would never be this cheap again for fundamental physical reasons. But perhaps that made it a bubble. A true bubble must have a "story" about how it's "different this time" that manages to convince huge numbers of people.
  - cubano 11y ago
    You wouldn't be the first person to be on the losing side of a bet against the technical and capitalistic abilities of American business.
    - api 11y ago
      Luckily, I made no (financial) bet. :)
ajmurmann 11y ago
Why do people keep saying this? I thought it was agreed on that production had already gone up a lot months ago due to fracking and now due to Iran. Many posters also seem to completely ignore the supply side of the equation. Why?
- api 11y ago
  I think I'm in disbelief that there can possibly be so much of this stuff. I recall years ago though reading a debate between a peak oil "doomer" and someone saying climate change was the bigger problem. The latter kept saying we have more oil at higher prices and that the real problem is we have "enough carbon to destroy the world." If we really got desperate and decided we didn't want Florida we could do deep in situ conversion of massive conventionally unreachable reserves of very deep coal into gas ("water gas reaction"), then liquids. That could, he said, keep our liquid based transport economy going for thousands of years but would send Earth back to the Permian.
  - reality_czech 11y ago
    Your climate change friend was right. The technology for converting coal into oil has existed for decades. Nazi Germany used it during WWII. Peak oil is a scientifically illiterate concept. Of course, these days, it would be smarter to use micro-orgranisms to create oil from some energy source and feedstock (like solar).

Oil is the rate limiting reagent for industry, so causation goes the other way. A rapid oil crash is a clear indicator of a slowdown.

by api 11y ago

Oil is the rate limiting reagent for industry, so causation goes the other way. A rapid oil crash is a clear indicator of a slowdown.

cubano 11y ago

That is only one side of the equation. Due to rapid technological advances in shale oil extraction (ie fracking), North American companies have radically changed the daily global supply of oil, which of course puts downward price pressure on it. Much of the recent price drop can be defined in terms of Saudi's getting into a price war with these NA companies, trying to push them off the market. Not only that, but this technology is a long-term game changer, ie it will be only a matter of time before all the world oil players (Russia, Venezuela, etc) co-opt this tech and start extracting much cheaper oil from their fields, which of course the markets are anticipating as well.

api 11y ago
Hmm... and combine with EVs coming of age, a Moore's Law type growth curve for solar (and solar EROEI), etc., and perhaps the high energy costs of the recent past are gone for a while. I have to admit I'm surprised. I totally bought the idea that oil would never be this cheap again for fundamental physical reasons. But perhaps that made it a bubble. A true bubble must have a "story" about how it's "different this time" that manages to convince huge numbers of people.
- cubano 11y ago
  You wouldn't be the first person to be on the losing side of a bet against the technical and capitalistic abilities of American business.
  - api 11y ago
    Luckily, I made no (financial) bet. :)

ajmurmann 11y ago

Why do people keep saying this? I thought it was agreed on that production had already gone up a lot months ago due to fracking and now due to Iran. Many posters also seem to completely ignore the supply side of the equation. Why?

api 11y ago
I think I'm in disbelief that there can possibly be so much of this stuff. I recall years ago though reading a debate between a peak oil "doomer" and someone saying climate change was the bigger problem. The latter kept saying we have more oil at higher prices and that the real problem is we have "enough carbon to destroy the world." If we really got desperate and decided we didn't want Florida we could do deep in situ conversion of massive conventionally unreachable reserves of very deep coal into gas ("water gas reaction"), then liquids. That could, he said, keep our liquid based transport economy going for thousands of years but would send Earth back to the Permian.
- reality_czech 11y ago
  Your climate change friend was right. The technology for converting coal into oil has existed for decades. Nazi Germany used it during WWII. Peak oil is a scientifically illiterate concept. Of course, these days, it would be smarter to use micro-orgranisms to create oil from some energy source and feedstock (like solar).