Hypocracy

[Xiahou]

I'm not aware of them actually predicting we would be out by now, nor are they saying we will run out in the near future. The case is really an economic one. However this clearly shows the fallacy in your thinking. Unlike you and some other "experts," they have an understanding of the impact oil demand's inelasticity to pricing. You believe we have to run out before we are in serious trouble. That's not what they are saying, nor is it what I am saying.

One of these days perhaps you will start to put the economic concepts together.

Oh Red, you do make me laugh sometimes.
Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

I'm split as to whether you are being dishonest by trying that tactic, or if you are being dense.

Maybe I'm stupid and lying? That's certainly a mature way to handle an argument regardless.

There is a lesson to be learned from those spikes, however.

Yep, and that is that when cost spikes- consumption eventually drops as it did.

[Red Harvest]

Oil is only inelastic in the short term. History has shown that in the long haul there is indeed elasticity in demand- if prices stay high for a prolonged period people will begin to buying more fuel effecient vehicles such as diesel or gas/electric. In the mean time, work can continue on alternative fuels- I read that fuel cells could be ready for primetime in another 10-15 years. Now, even if we buy into the 'doom and gloom'ers (which I think are clearly underestimating reserves), we still have another 40-80yrs worth of oil and these predictions are even taking into consideration consumption growth rates are they not? Now, explain again to me why I need to fork over more of my hard earned money to a government sponsored corporate welfare plan?

You are still fooling yourself. Nothing will be ready if we aren't more active in working on it. That's the rub. The gap between what corporate research and what many believe it to be is enormous. U.S. research in general has been in a state of decline.

No, the 40-80 year supply estimates are not realistic. Why? They imply that oil will be pumping at near full rates to meet demand the whole time then just shuts off. They ignore the truth that production will be declining which is what peak oil is about. They ignore the price inelasticity--which is why it is not mentioned in their articles. The adjustment that is achieved comes at the expense of the economy through recession to support the vastly increased price. I remember the economic malaise of the 70's and early 80's. I would prefer not to repeat the experience.

Unfortunately, we are all in this together. I wish there was a way to let you have your extra 18.4 cents per gallon in Federal gasoline taxes in gas taxes, and for you to lose access to the interstate highway system, and other things Federal gas taxes support. Unfortunately, it isn't practical so you'll have to live with the massive burden of an extra $100/year or so in operating expense. Be thankful you aren't using local toll roads, that can run you into thousands per year and is very inefficient--with a bunch of extra employees and effort to maintain a few miles of road.

Yep, and that is that when cost spikes- consumption eventually drops as it did.

We had a major recession and hyperinflation. Whole industries failed. The decline in consumption was slight for the magnitude of the spikes. It took a decade to start to respond meaningfully. That is the reason for getting in front of this. You want to save a few cents per gallon and perhaps $100/yr so that you can spend several dollars per gallon more indefinitely. No, thanks.

[Xiahou]

Unfortunately, we are all in this together. I wish there was a way to let you have your extra 18.4 cents per gallon in Federal gasoline taxes in gas taxes, and for you to lose access to the interstate highway system, and other things Federal gas taxes support. Unfortunately, it isn't practical so you'll have to live with the massive burden of an extra $100/year or so in operating expense. Be thankful you aren't using local toll roads, that can run you into thousands per year and is very inefficient--with a bunch of extra employees and effort to maintain a few miles of road.

You're a real cut-up, did you read any of the highway bill and see what our tax dollars are going towards? As I've said, the Interstate system as it was intended is complete. If Dallas needs a bigger capacity beltway, that's really not my problem- let Texas deal with it. The highway bill is chock full of pork and shameless vote buying by our legislators- that's what our fuel tax is funding, a big government slush fund. It was originally promised as only a temporary tax but, suprise, suprise- Congress keeps re-authorizing it. I wonder, has there ever been a case in the history of our government of a temporary tax that ever was actually temporary?

Now, back to peak oil... I invite everyone to read this rebuttal of the Hubbert curve model as it's being currently applied. As is the case with many climate models, it seems that it takes too many assumptions as given and historically, has shown itself to be error prone. Sure, oil is finite and production is bound to fall off sometime for one reason or another- but the Hubbert curve has too many unknowns and has been wrong too often to expect it to predict when oil will begin to deplete with any accuracy.

[Demon of Light]

Funny that you guys should happen to be discussing this. I recently asked a British Economics professor a few questions on the same subject. Here is the reply I got. You should be able to recognize the questions I asked in the text.


Hi Alberto,

Thanks for your e-mail. Oil is not something I’ve studied, so I can only speak from first principles. It’s hard to talk about demand exceeding supply in a market where prices are flexible, as with oil.

>>Are we truly in a situation where demand far exceeds supply where oil is concerned or am I being decieved by various politicians and media outlets?

If the domestic price of oil were controlled, as in Zimbabwe, then demand could exceed supply and there could be a shortage of oil in the sense of people wanting to buy it at the prevailing (official) price but being unable to get it. But most countries take the world price for oil, slap on varying taxes and let the market clear through imports or exports. The world price adjusts so that demand equals supply. So I think you might need to reformulate your question - maybe to “are world oil prices rising because demand growth exceeds supply”? In which case, I think the answer would be yes. World demand for oil has been rising fairly rapidly - driven in part by the US and China - and supply has not kept pace. Hence rising world oil prices. I found a nice graph on world oil prices with a chronology:

http://www.eia.doe.gov/emeu/cabs/chron.html

>>If there is a supply shortage, is it based more on how much oil is made available or more on our ability to process and refine the oil we have?

Again, I’d put it in terms of price, rather than physical constraints like availability or ability to process. As the price rises, its worthwhile extracting oil that is more costly to mine. Oil reserves that are cheap to exploit are the first to be mined, so as these are exhausted, supply factors will push up the price of oil. Some people say we will never run out of oil, as when it gets very scarce, it will become extremely expensive and so not be demanded.

You could think of the above analysis in terms of supply and demand. The world demand for oil shifts out due to economic growth. The world supply is upward sloping, as it gets more costly to mine more oil. Hence world prices of oil rise as demand increases.

>>Is there reason to believe that there is some degree of collusion between energy companies to artificially inflate prices and create artificial energy shortages?

As I understand it, the key factor is how much supply is released onto the world market. OPEC effectively controls this and so artificially inflates prices. Going back to your first question, it’s not necessarily a shortage but it does push up the price. If you’ve done some economics, you’ve probably come across the free rider problem with cartels - it can pay individual OPEC members to cheat and sell more than the cartel agreed. One interpretation I’ve heard of Saddam’s invasion of Kuwait in 1991 was that he was trying to punish such cheating by Kuwait. I would not blame energy companies - these are often little more than middle men - it’s the governments of oil-exporting countries that are crucial - notably Saudi Arabia, which tends to play the key role in adjusting its production so that world supply matches that planned by OPEC.

I don’t know if these answers are of any use.

best wishes

(name deleted)

[Papewaio]

So your name is Alberto and the Economics professor likes you?

Well XXXXX at the bottom of an email or letter is normally kiss kiss kiss... or is that hug hug hug hug?

[yesdachi]

Not sure why this has been such a topic of discussion. As oil continues to become more expensive due in part to availability for whatever reason, people will just find alternatives. Just look at the number of emerging alternatives to appear on the scene in the last year. When there is a need for something, anything, someone develops it. Should an oil alternative been developed years ago, sure, but the demand was not as urgent. I think I will just sit back and watch capitalism work. Besides I’m busy worrying that the sun only has a few trillion years left before it burns out.

[Gawain of Orkeny]

Well said and directly to the point.

[Demon of Light]

So your name is Alberto and the Economics professor likes you?

Well XXXXX at the bottom of an email or letter is normally kiss kiss kiss... or is that hug hug hug hug?

My name is Alberto and XXX signifies a deleted name. But you knew that (insert a smilie that sticks out its tongue here)

[Red Harvest]

The highway bill is chock full of pork and shameless vote buying by our legislators- that's what our fuel tax is funding, a big government slush fund.

Yep, the GOP has proven itself to be all pork--the ultimate hypocrisy. However, the fuel tax is not a big government slush fund, nor is it restricting your way of life unnecessarily. I would like to set up a model community of likeminded folks for you to live in. There you would all get to chose what you want to pay for in govt, then you get the level of service you are willing to pay for. We could call it "Backwater, USA." There is really no debating with someone who thinks the govt shouldn't spend money on anything.

Now, back to peak oil... I invite everyone to read this rebuttal of the Hubbert curve model as it's being currently applied. As is the case with many climate models, it seems that it takes too many assumptions as given and historically, has shown itself to be error prone. Sure, oil is finite and production is bound to fall off sometime for one reason or another- but the Hubbert curve has too many unknowns and has been wrong too often to expect it to predict when oil will begin to deplete with any accuracy.

Classic. This is the PERFECT specimen to illustrate typical rebuttals of trends that are real but folks don't want to accept. I've faced the same before many times at work. Lynch exemplifies those types of rebuttals: point to admitted flaws (hidden/proprietary data problems that are behind this debate in the first place), ignore well established things (like the decline in lighter crude discoveries, despite very great desire to find them...this is a lead indicator for the heavy crude by the way), end the "rebuttal" without really offering any better idea of what is going on.

Also funny...it stops in 2002...hmmm, and the peak predictions are largely after that. I can find you piles of reports like this that have all been proven incorrect in their projections, but strangely they aren't coming from the Hubbert side.

The most telling part of all is that without artificial restriction, supply is groaning to keep up with demand. In fact, it is falling behind and thereby driving up prices rapidly. Where is all that oil that was supposed to be waiting on tap when we hit $50/bbl (a doubling of recent prices?) It hasn't appeared and oil price is continuing to rise. Production has been boosted but it hasn't been able to keep pace.

[Xiahou]

Yep, the GOP has proven itself to be all pork--the ultimate hypocrisy. However, the fuel tax is not a big government slush fund, nor is it restricting your way of life unnecessarily.

You just contradicted yourself. More sweeping, unsubstantiated generalizations- as Im sure people have come to expect from you.

Also funny...it stops in 2002...hmmm, and the peak predictions are largely after that. I can find you piles of reports like this that have all been proven incorrect in their projections, but strangely they aren't coming from the Hubbert side.

If you can't find wrong projections on the Hubbert side, you just plain aren't looking.

The recent authors, notably Campbell and Laherrere have apparently rediscovered the Hubbert curve, but without understanding it, at least initially. Campbell and Laherrere initially argued that production should follow a bell curve, at least in an unconstrained province. But this is demonstratively not the case in practice: most nations’ production does not follow a Hubbert curve. In fact, Campbell (2003) shows production curves (historical and forecast) for 51 non-OPEC countries, and only 8 of them could be said to resemble a Hubbert curve even approximately.

The authors initially responded to this weakness by arguing that the Hubbert curve could have multiple peaks, which of course means it would not follow a bell curve at all, and destroys the explanatory value of the bell curve.

Multiple peaks- that's hilarious. The very idea that there could be multiple peaks destroys the idea of a bell curve, which then ruins any accuracy in the peak oil theory in predicting the 'final' peak- since you have no idea if a peak is the last one or just one of a sucession.

Not sure why this has been such a topic of discussion. As oil continues to become more expensive due in part to availability for whatever reason, people will just find alternatives. Just look at the number of emerging alternatives to appear on the scene in the last year. When there is a need for something, anything, someone develops it. Should an oil alternative been developed years ago, sure, but the demand was not as urgent. I think I will just sit back and watch capitalism work. Besides I’m busy worrying that the sun only has a few trillion years left before it burns out.

That's exactly what me and Gawain are saying. This is all so similar to the Kyoto protocol nonsense- we are trying to be convinced to spend truckloads of money on solutions for a crisis that doesn't exist.

[Goofball]

Okay, to the original question.

Hypocrisies that bug me from "the right:"

1) Christians and Pro-Lifers who also support the death penalty. C'mon folks, give your heads a shake...

2) Folks who will cheer and hurrah about how the war in Iraq is about preserving American freedoms, but fully support things like the Patriot Act and "no-fly" lists. Puh-leaze...

3) People who complain that liberals are trying to force "the gay lifestyle" on them while on the other hand supporting every attempt by Christians to force their own dogma on everybody else. Infuriating.

4) Chickenhawks. Self-explanatory.

Hypocrisies that bug me from "the left:"

1) Folks who claim to be abhor racism, but will sit quietly or even laugh "politely" at a racist joke because they are too weak-spined to tell the teller of the joke that their "humor" is bigoted and not funny in the slightest. These people think they're part of the solution, but they're really part of the problem.

2) Unions. They claim to be fighting for the rights of the workers against "big business," but the unions themselves are just as "big business" as the companies whose morale and productivity they do their best to sabotage. Unions are leeches that suck blood from both the workers and the businesses.

There. There should be something to piss everybody off in there...

[Gawain of Orkeny]

There. There should be something to piss everybody of in there...

Not really I pretty much agree. Im glad someoone gets the idea off this thread at last. Although it has been one of the best debates Ive seen on oil here.

[drone]

1) Christians and Pro-Lifers who also support the death penalty. C'mon folks, give your heads a shake...

Actually, I've always thought the liberal pro-choicers who opposed the death penalty were worse. The convicted criminal being executed has more right to live than an innocent fetus (who may or may not be "alive", depending on your viewpoint)?

On the left: Liberal Hollywood actors saying "Save the Planet" while driving their Hummers and Escalades around.

On the right: Declaring a war on terror while doing nothing to cut off the opposing sides funding (back to oil again, now how did that happen ).

[Red Harvest]

You just contradicted yourself. More sweeping, unsubstantiated generalizations- as Im sure people have come to expect from you.

No, it is not a contradiction, because I believe in reasonable spending projects, not PORK. You on other hand LIKE having the wool pulled over your eyes. If they say what you want to believe, you believe it. I'm used to it, worked with plenty of the same.

Your "unsubstantiated generalizations" comment is WEAK in the extremis. Have you actually looked at Federal spending under the Bush administration? They guy operates under the, "give borrowed money to everyone" premise. Look, FREE MONEY!!! Ain't I great!!! His party understands that and that's why we have a 2 trillion dollar addition to the national debt. I have $2 trillion reasons to support my statement. The GOP is buying votes by going into debt.

The last highway bill had 6,000 earmarks, including two $230 million dollar bridge projects. Total political pork = $30 billion.

Bush Pork Highway Bill

or

Another Bush Pork Hotlink Sandwich

Unlike pseudo-"fiscal conservatives" I've been watching the wreckless spending by the GOP from the start. They have less than zero credibility when it comes to financial issues compared with the Democrats. Never thought I would be saying that...but it has been a case of live and learn.

[Xiahou]

You know the highway bill is almost exclusively funded by the federal gas tax don't you? You say the gas tax isn't pork- but everything Bush does is pork and you use the highway bill as proof. Comical really.

I'm not going to defend the highway bill- it's a waste of money and I've said that from the beginning. You're arguing in circles here.
I've also never said the Bush admin has been fiscally responsible in domestic spending- in fact, I've said the opposite on many occasions. But feel free to keep putting words in my mouth if it makes it easier to win your debates.