hi jim_p,
I agree with his moving up to the next level on NG prices, but cycles will always persist at whatever the next level may be.
Groppe stated:
"We think we're probably at about a peak for total world oil production, and we'll see slowly declining long-term production," he said. Prices will rise "high enough to constrain consumption to match that supply,"
while this last sentence is a truism (if there's limited supply, of course demand will have to be constrained by price), i think it is worth noting what he said in the first sentence: We think we're probably at about a peak for total world oil production, and we'll see slowly declining long-term production. he believes in peak oil, which everybody here just got done saying is impossible because their third-grade teacher told them it would happen way back when and it didn't happen, ergo it can't happen now. for people willing to step away from fantasies based on magical thinking, peak oil is here.
this implies, basically, long-term higher prices which will ultimately constrain economic growth and could undermine the whole basis for neoclassical economics--capitalist societies rely on debt, after all, and rely on economic growth to inflate away that debt. no growth, no way to pay off the debt, and the entire basis for our capitalist society starts to fall apart.
thus while it is obvious that price will be the arbitrator which matches supply and demand, ever higher prices--a necessity over time if oil production has peaked--are inconsistent with our economic principles. thus it IS different this time. |
