4 ms·

I see peak oil differently. Peak oil/energy really is meaningless as an absolute. The only thing that really can matter is peak supply relative to demand, bec

I see peak oil differently. Peak oil/energy really is meaningless as an absolute. The only thing that really can matter is peak supply relative to demand, because this is what forces prices up and market changes. Oil hit this peak decades ago and is continuing to crunch slowly. Coal is likely to hit this peak soon, primarily because the cost of extraction is going up compared to yields. This means relative shrinking in supply regardless of what is in the ground. What this means to me is that energy prices, which have been supply constrained since the mid-1970's are going to continue to go up by fits and starts, and occasionally go down but it's a ratchet overall. This does have huge ramifications all across the economy. It won't be a drastic end like many of the peakers predict but a very slow crunch. In other words, the current economic troubles will continue by fits and starts more or less since they have since oil stopped being a demand-constrained commodity. I think you can trace most of the economic problems in recent decades to instability and supply constraints regarding energy. This has also helped fraud along, as in the case of Enron. The more we can do without oil, the more we can do. But energy return on investment is an important problem to solve and it isn't clear we have sufficient solutions available.

grammaton 14y ago
Your definition of Peak Oil is not the accepted definition. Peak Oil literally refers to the production curve of a single - or set of - oil fields, and the point at which their production is maximized, and then declines sharply thereafter. Supply and demand are secondary considerations until demand destruction is so far gone that no one wants oil anymore. Until then, the questions are, have we arrived at the peak yet, and if so, how fast do we end up falling down the decline curve?
- einhverfr 14y ago
  I know it is not the accepted definition, but peak production doesn't really matter in and of itself. If as economists suggest, we have to expect that supply will continue to rise to power an ever-growing economy, one will find the effects hit before the absolute peak in production, therefore expecting to see drastic changes when production starts to decline is a bit late. I think you have to look at this relative to demand because the end of cheap oil requires demand exceed supply which it appears to have done since the oil crisis of 1973 (the oil crisis itself may have been political) but it only could have happened because there was a growing understanding that oil was a limited and finite resource (discovery had already peaked and reserves were about to). This has lead to a post-1973 world where oil producers do not increase production to meet demand, leading to price instability and little changes resulting in occasional price spikes, something we never saw before '73.

grammaton 14y ago

Your definition of Peak Oil is not the accepted definition. Peak Oil literally refers to the production curve of a single - or set of - oil fields, and the point at which their production is maximized, and then declines sharply thereafter. Supply and demand are secondary considerations until demand destruction is so far gone that no one wants oil anymore. Until then, the questions are, have we arrived at the peak yet, and if so, how fast do we end up falling down the decline curve?

einhverfr 14y ago
I know it is not the accepted definition, but peak production doesn't really matter in and of itself. If as economists suggest, we have to expect that supply will continue to rise to power an ever-growing economy, one will find the effects hit before the absolute peak in production, therefore expecting to see drastic changes when production starts to decline is a bit late. I think you have to look at this relative to demand because the end of cheap oil requires demand exceed supply which it appears to have done since the oil crisis of 1973 (the oil crisis itself may have been political) but it only could have happened because there was a growing understanding that oil was a limited and finite resource (discovery had already peaked and reserves were about to). This has lead to a post-1973 world where oil producers do not increase production to meet demand, leading to price instability and little changes resulting in occasional price spikes, something we never saw before '73.