Economics, Humanity and Oil

Me · Post by Me » Thu Aug 18, 2005 10:10 am

I haven't been on in awhile as I have alot on my plate, unforchantly it's sometimes hard to digest. I just thought I'd share some opinions that may open your eyes a bit wider.

What's problematic is not so much running completely out of oil but what happens when the global peak production of oil is reached, after which point oil production can no longer keep up with demand for it.
Supply drops below demand and prices skyrocket. It's at that point that the economic crisis of oil as a finite resource will begin to hit, not when the last extractable drop of oil is taken from the ground. This is likely to be pretty drastic: Obviously gas prices will skyrocket, but demand is pretty inflexible. We all have to get to work. Our food typically takes more petrochemical calories to produce than food calories yielded. Our food has to be transported to us on trucks that are owned by small to large businesses that will increasingly not be able to afford diesel prices and will have to lay off workers. A lot of businesses will be laying off workers, leaving people with no means to buy the increasingly expensive commodities on which they depend. This could be politically explosive, if not outright dangerous.
An interesting way to conceptualize this is the "Hubbert's Curve." King Hubbert was a geophysicist who, in 1949, predicted the trajectory of oil extraction in the United States. He figured that the rate of extraction would increase in response to demand, itself fueled
(sorry) by the increasing success in finding oil. This increase would follow a logistic curve, with almost exponential increase at first, followed by a period of increase at slower and slower rates as the easily extractable reserves are tapped out and more expensive technology has to be applied. At some point, extraction would peak and then extraction would drop in a nearly mirror image pattern as the costs of extracting the scarcer and scarcer resource begin to increase exponentially and its success begins to decrease exponentially. The result, plotted through time, looks kind of like the familiar bell curve from the statistical normal probability distribution. In 1949, using this logistic curve, Hubbert predicted that U.S. oil fields would peak around 1960 or so, accurately, it turned out.
Using the same methodology, a number of people have been working on the global Hubbert's Peak. I've heard estimates ranging from 2005 to 2020, so your guesstimate is right smack in the middle of the range.
A very nicely written summary of the situation is given by David Goodstein of Caltech in a popular book entitled, "Out of Gas: The End of the Age of Oil."
Here's a link to the Amazon listing:
http://www.amazon.com/exec/obidos/tg/de ... ce&s=books
Wikipedia has a nice summary, including a few critics of the Hubbert's model:
http://en.wikipedia.org/wiki/Hubbert_peak

Soup4Rush · Post by **Soup4Rush** » Thu Aug 18, 2005 10:29 am

welcome back Kev, where the heck ya been? What about all the Alaskan oil we sell to the Japanese for $45 a barrel. and than we pay $65 a barrel to get it from the Saudis.. I paid a $2.68 a gallon last night and today it was .22 more a gallon. I doubt the world is running out of oil, the A holes in charge of it need to be shot is all. and what about Gasahol? I remember dad using that in our Pontiac Ventura back in the 70's... Dad said the car ran great on that stuff and it burned cleaner. The one thing we have plenty of is corn.

awip2062 · Post by **awip2062** » Thu Aug 18, 2005 10:53 am

Well, Soup, I must admit you are right that the gas prices are out there. And our dear governor here in Washington just forced a tax-increase on us to pay for road work (the vast majority of it to be done only in Seattle, but the whole state gets to pay for Seattle's care). I say forced because the people had voted no to the increase, and she put it through anyway.

awip2062 · Post by **awip2062** » Thu Aug 18, 2005 11:10 am

Kev, I looked over what you sent me about this, and they do have some good points. We will definitely have more troubles as the oil demand exceeds the supply, no matter how that supply is wanting, whether it be from lack of oil in the earth or lack of oil being put on the market for consumption. Things may get pretty ugly if an alternative is not brought to the fore before the public decides it is critical for us to have more than we have. An alternative that is put out where the general public can use it easily and without having to pay more for it than the gasoline. I shudder to think of the chaos that may ensue.

Soup4Rush · Post by **Soup4Rush** » Thu Aug 18, 2005 11:16 am

awip2062 wrote:Well, Soup, I must admit you are right that the gas prices are out there. And our dear governor here in Washington just forced a tax-increase on us to pay for road work (the vast majority of it to be done only in Seattle, but the whole state gets to pay for Seattle's care). I say forced because the people had voted no to the increase, and she put it through anyway.

I heard you guys had to foot the bill for the Mariners and Seahawk stadiums too without public consent.

Walkinghairball · Post by **Walkinghairball** » Thu Aug 18, 2005 11:17 am

Gaaaaaaaaaaaaaaaaaaah!!!

awip2062 · Post by **awip2062** » Thu Aug 18, 2005 11:27 am

Yeah, even Bro pays for that, although it is likely he will never do more than drive by them on his way to my house.

Speaking of on the way to my house, Bro, Dan says anytime you want, you all are most welcome here. All you need do is get here and we will take care of the rest.

Kares4Rush · Post by **Kares4Rush** » Thu Aug 18, 2005 12:58 pm

That was a very thought-provoking read, Me. Thanks so much. I remember that "bell curve" from college. It's also scary.

I was watching the TV the other day and I think I heard the term "peak oil" on one of those politcal shows but I'm not sure. I know I've heard the term before, though. They were talking about why the prices are skyrocketing each day. One said that just China itsself in the past year has increased the world-wide demand for oil by 3% (!!!) because of the huge demand and production of SUVs over there now. It affects the prices of oil all over the world. And, of course, affecting the price of everything "touched" by oil from milk and bread delivery to airline travel.

Yah, and even Domino's has put a surcharge of $1.25 on it's deliveries to cover increased gas prices of the driver. Domino's is part of the DOMINO effect!

My folks just called from Canton, Ohio (dining in the FBHOF, Soupy!) on a Midwestern car-ride visit of our relatives. Gas: $2.79 this morning at the pump!!! They hope they can afford to make it back to NY!!!

Grandpa Grizz · Post by **Grandpa Grizz** » Thu Aug 18, 2005 4:36 pm

I guess I need to fix that flat on my bicycle.

Kares4Rush · Post by **Kares4Rush** » Fri Aug 19, 2005 1:45 am

grizz, I remember riding my bicycle to "horse riding" lessons I earned with after-school jobs--which was my PASSION as someone who grew up in the Bronx and moved into a wealthier community (only the "rich" kids could afford it and they were "driven" there) but it was MOY passion since I was small and someday wanted to ride hossies. (ask Imm)

I guess between the bicycle and the horse there may have been some "energy" there that may have been useful--or at least saved. (heh heh)

Kares4Rush · Post by **Kares4Rush** » Fri Aug 19, 2005 2:47 am

OK, I'm gonna go out on a limb, here and face ridicule out of ignorance but at least may hope to get info.

Here's my ignorance but I'm trying to learn. That's why it's koo that a board like this may shed light?

It's been known (at least since I was in High School) that fossil fuels were limited. Not necessarily its quantity but in how it was derived. If I had to hear ONE more time about how much oil THIS country had in stock but capped it because it wasn't "economically feasible" to tap it anymore (thus rely on foreign oil) well....

Unfortunately this country as does many others rely on oil from the Middle East as it is easier and cheaper (believe it or not) from here. Here, I believe we run into more of the "jihad" problems than we might otherwise were we not dependent on such an instable environment.

If this country (and others) weren't so reliant on such day-to-day stuff such as the ENERGY to RUN our country with such Arab Nations then perhaps the world wouldn't be in the "pickle" it is.

I have nothing against Arab countries nor their culture (CULTURE!!! HAS ANYONE LOOKED AT THIS LATELY?? THE CULTURE IS COOL!) but it is an undeniable truth that the West is dependent on the Middle East. Arab countries, poor a few years ago, have some of the highest wealth imaginable on the planet Earth. Why? Oil.

In my opinion we cannot "fix" the problems in the Middle East. I know Jewish people in this country may feel otherwise and continue to rely on our support...or else...or something...but really...

Reliance on oil makes it worse.

Again, I have no solutions myself but I'm not an engineer. I would like to hug a tree and all and support solar energy but it is still in its infancy...even if it were a solution.

But there are too many involved on both sides that are afraid their effords might go unlauded. Bad term. Don't need "laudation" but support and funding, perhaps. It is tough to get one's ego out of the way to do something. I'm talking American, Arab and yes (hee hee) even Swedish!

Me · Post by Me » Fri Aug 19, 2005 4:29 am

http://en.wikipedia.org/wiki/Hubbert_peak

Thanks for all the replies... read the link, it's long but well worth the read.
For one you'll learn that it takes oil to grow the mass quanties of food we enjoy in todays markets and that most pesticides use oil in them. There's alot of infomation there, one can even decide where it's best to invest that extra dollar they found in the dryer, being that there's power in knowledge.

With that, I got to go! I'll pop in from time to time and even stay awhile if "RUSH" ever tours again.

I got to put my ding, ding bell and basket on my push bike now.

And one last thing for now, a truely gratefull THANK YOU!

PEACE

Walkinghairball · Post by **Walkinghairball** » Mon Aug 29, 2005 10:40 am

I got this pic in an e-mail from a bud here in town, I think it sums it up quite nicely.

awip2062 · Post by **awip2062** » Mon Aug 29, 2005 11:44 am

LOL hilarious, but true

awip2062 · Post by **awip2062** » Sun Sep 04, 2005 4:02 pm

The price for regular at our usual station went up 21 cents one day, then six more the next day.