5 ms·
Oil has highly inelastic demand in the short term. People need to drive to work. Goods need to be transported either by train, ship, or truck. Planes are still
by zrail 10y ago
Oil has highly inelastic demand in the short term. People need to drive to work. Goods need to be transported either by train, ship, or truck. Planes are still jam packed with people.
In the long term high oil prices will modify demand because people will start buying more efficient vehicles. You can see this happening in the decade starting in 2001 because prices spiked and stayed above $3/gal for the entire decade and fuel efficiency rose to match it.
- e12e 10y agoNot to forget one of the most "insidious" uses/dependencies of oil: food production in general and agriculture in particular. No oil, means, as far as I know, without radical change, less (as in not enough) and (much) more expensive food. That's even before one considers transport etc.
- 08-15 10y agoI really wonder why farmers don't run their equipment on biodiesel or bioethanol. (Actually, the answer is bloody obvious. Admittedly somewhat off-topic, too.)
- e12e 10y agoAFAIK there's been some success in Germany with being able to combine a big enough crop devoted to biodisel along side a meaningfully size crop for food - but oil, especially subsidized oil, is really cheap energy. But there was recently a big scare connected to farmers taking subsidies to produce biodisel - and biodiisel production out-competing food production and/or leading to hike in food prices... so yeah. If you have X square meters in which to grow food, you can't readily use some large percentage of that for "growing" biodiesel, without cutting into your food grow area. I'm sure there are certain biomass that will work as both, but it's not trivial to "just use biodisel".