Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (7426)	4/16/2008 11:31:34 AM
From: Wharf Rat	Respond to of 24233

April 15, 2008, 9:17 am Oil wells that don’t end well One of the defining features of the last 8 years or so has been the way ideas go from crazy stuff that only DFHs* believe to stuff everyone knows, without ever going through a stage in which the holders of conventional wisdom acknowledge that they were wrong. Oh, and the people who were right are still considered DFHs; you see, they were right too soon. It looks as if peak oil may be going that way: Russian oil production has peaked and may never return to current levels, one of the country’s top energy executives has warned, fuelling concerns that the world’s biggest oil producers cannot keep up with rampant Asian demand. ==April 15, 2008, 9:02 pm Oil numbers There are two basic facts that would seem to explain a lot about what’s happening to oil prices. First, Gross World Product growth has accelerated — from 2.9 percent in the 90s to almost 5 percent in recent years, according to the IMF. All of this is because of growth in emerging economies, largely China. Second, world oil production has stalled — after growing around 1.6% a year in the 90s, it’s been basically flat for the last three years. So we’ve got rapidly growing demand due to industrialization in Asia colliding with stagnant supply, basically because oil is getting hard to find. (The demand shock is probably even bigger than the GDP number suggests, because China’s economy is highly energy-inefficient). And the demand for oil is price-inelastic — that is, it takes big price increases to persuade people to use significantly less. There’s probably more to the story, but that seems to be the basic thrust. And it seems to be a recipe for rising prices for a long time to come. This is what peak oil is supposed to look like — not Oh My God We’ve Just Run Out Of Oil, but steady pressure on the economy and the way we live from rising energy prices and their consequences. And it doesn’t matter much whether we’re literally at the peak, or whether production can rise by a few million more barrels a day; unless there are big sources of oil out there, we’ll be feeling peakish for the foreseeable future. krugman.blogs.nytimes.com *DFH dirty fuckin' hippies, to wit, Cassandra Dee Rat