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post #1 of 11 Old Apr 23rd, 2006, 10:29 am Thread Starter
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Interesting...oil crash

Just something to help with those lazy days when yer not out ridin...

http://www.lifeaftertheoilcrash.net/

Gotta go to my sister's 50th Anniversary. Ketcha later!
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post #2 of 11 Old Apr 23rd, 2006, 11:02 am
 
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Whooooaaaa - that certainly gives me something to think about. We have been riding the "boom" for so long that we forget that the economy does (and will) "cycle".
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post #3 of 11 Old Apr 23rd, 2006, 1:31 pm
 
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The US and the world for that matter will change methods of pimary energy source long before the oil dries up. The world just needs a nudge, which we in the US may be seeing right now, it's been expensive in Europe for years. I think it's funny when people complain about the price of gas here. It's been too cheap, for too long and that's why we still need it so much. It's about time.
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post #4 of 11 Old Apr 23rd, 2006, 3:22 pm
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Quote:
Originally Posted by Jerrod Maguire
The US and the world for that matter will change methods of pimary energy source long before the oil dries up. The world just needs a nudge, which we in the US may be seeing right now, it's been expensive in Europe for years. I think it's funny when people complain about the price of gas here. It's been too cheap, for too long and that's why we still need it so much. It's about time.
I see you enjoy reading The Economist. But to understand the oil problem, you've got to go beyond traditional economics for a moment. Oil will not "dry up" for hundreds of years, so that's not the problem. The problem is that we are now producing the most oil per day that the earth EVER will. In simplistic terms: for every oil well we drill, two dry up. Nevertheless, our economy requires growth to sustain itself. If it does not grow, it dies. Even during the great depression, we had slower growth, but growth nonetheless. Economic growth requires energy. Our infrastructure is set up to run on oil, and we're not going to just switch out our gas stations for hydrogen stations. There is a gap between the oil we have and what we need. That's scarcity - supply & demand - typical economics stuff. The higher prices we're seeing now is a result. But what's not typical economics is the idea that nothing - no combination of "alternative fuels" can make up the growing gap. So, what you have is not only higher prices, but a REAL physical (non-economic) deficiency, and nobody knows what happens to a global growth economy when the engine of that growth (oil) no longer grows along with it. Nobody knows because it's never happened before. We might extrapolate the conditions in North Korea and Cuba to a global scale for some idea of what oil-starved nations go through (doctors & lawyers working in the fields with hand tools - yuck), but we don't really know what a global economy does. One thing is for sure, access to dwindling oil production is a national security issue for all nations, and this fact places our activities in the middle-east in perspective. It places the geopolitical maneuvering in Eurasia (the color revolutions) in perspective. It places the US radar station in Baku in perspective. It places our friction with Venezuela in perspective. The time to implement alternative energy has come and gone. Nothing we do now can avert a major period of paradigm change.

Let me reiterate something I said in a previous chit-chat post: the video End of Suburbia is a life-changing introduction to the hardships that await. Our way of life is ending.
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post #5 of 11 Old Apr 23rd, 2006, 10:17 pm
 
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I don't subscribe to your point of view.

As first world countries become more numerous... or the standard of the world's countries or GDP increases, we [first world countries] will require more energy or more importantly... more efficient sources of energy for our continued productivity. Of course, we'll need a continual flow of relatively inexpensive, efficient energy to prosper; on this we agree.

However, we will become more efficient with our current oil resources due to high worldwide demand and ever increasing higher prices. For example, each car or truck will require less crude oil to operate (hybrids for example) and we will continue to explore alternative methods of relying less and less on crude oil for our energy needs (hydrogen, wind, solar, hydro, used vegetable oil, etc).

The end result will be multiple energy sources and technologies running parallel with one another, competing within specific geographical areas and/or particular categories of use, until one or some become the clear winner in any given category or area.

Your doomsday scenario is no different than past authors stating that the world population will out-strip the earth's ability to provide for them. This was based on the shear number of births versus deaths. Well, humans adapted and we require a lot less land and resources than once predicted to make even larger amounts of food. Thanks to advances in technology, we can feed the world many times over. Of course, getting the food into the right hands is another thing all together, but I digress.

Crude oil will no longer be the heavy weight champion of the world; there are better sources currently available and more to come I'm sure.

Quote:
Originally Posted by midwilshire
I see you enjoy reading The Economist. But to understand the oil problem, you've got to go beyond traditional economics for a moment. Oil will not "dry up" for hundreds of years, so that's not the problem. The problem is that we are now producing the most oil per day that the earth EVER will. In simplistic terms: for every oil well we drill, two dry up. Nevertheless, our economy requires growth to sustain itself. If it does not grow, it dies. Even during the great depression, we had slower growth, but growth nonetheless. Economic growth requires energy. Our infrastructure is set up to run on oil, and we're not going to just switch out our gas stations for hydrogen stations. There is a gap between the oil we have and what we need. That's scarcity - supply & demand - typical economics stuff. The higher prices we're seeing now is a result. But what's not typical economics is the idea that nothing - no combination of "alternative fuels" can make up the growing gap. So, what you have is not only higher prices, but a REAL physical (non-economic) deficiency, and nobody knows what happens to a global growth economy when the engine of that growth (oil) no longer grows along with it. Nobody knows because it's never happened before. We might extrapolate the conditions in North Korea and Cuba to a global scale for some idea of what oil-starved nations go through (doctors & lawyers working in the fields with hand tools - yuck), but we don't really know what a global economy does. One thing is for sure, access to dwindling oil production is a national security issue for all nations, and this fact places our activities in the middle-east in perspective. It places the geopolitical maneuvering in Eurasia (the color revolutions) in perspective. It places the US radar station in Baku in perspective. It places our friction with Venezuela in perspective. The time to implement alternative energy has come and gone. Nothing we do now can avert a major period of paradigm change.

Let me reiterate something I said in a previous chit-chat post: the video End of Suburbia is a life-changing introduction to the hardships that await. Our way of life is ending.
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post #6 of 11 Old Apr 23rd, 2006, 11:05 pm
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Your reaction was the same as my initial reaction. I then set out to disprove a very smart (and very wealthy) friend's odd-sounding arguments, but I become convinced of their veracity.

Buy and watch the above-mentioned dvd as an intro, and if you still think alternative energy will get us over this obstacle comfortably, I'll buy the dvd off you + shipping. What's 90 minutes of your time to quell my "doomsday scenario?"

And what if I'm right?

BTW, the "past authors" to which you refer were three MIT scientists who wrote a 1972 report called The Limits to Growth for a group of businessmen called the Club of Rome. It has been updated as of 2005, and you may obtain a copy here.
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post #7 of 11 Old Apr 24th, 2006, 12:18 am
 
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We have a deal

I ordered the DVD. We'll talk in a couple of weeks.
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post #8 of 11 Old Apr 24th, 2006, 8:49 am
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face the nation

i find that riding the LT through twisty mountain roads helps me to forget about oil crisis and world economics and other probably right but painful discussions....

gas is going up because the rate at which China is buying and using it using it is accelerating faster than the rate at which it is being produced.......a guy named Adam Smith put that all in perspective a long time ago

since we Americans have such a powerful lust for cars, motorcycles, boats and other fun toys....and since we all have plenty of money.....we will probaly maintain our addiction to oil.....

if Adam had had an LT he probably would have been more concerned about whether to run metzlers or bridgestones .....or what kind of GPS he liked best


Kip
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post #9 of 11 Old Apr 24th, 2006, 1:13 pm
 
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I LOVE your solution. If more folks did in fact ride motorbikes it would have an impact on demand which has more to do with this "crisis" than supply (this is my line of work).

Have read most of what has been suggested in this thread (although not the DVD) to include the most recent "Twilight In The Desert" only because most in the industry were more than curious about the forward production schedules posed by it's author than anything else.

If one looks at the DOE demand/inventory levels on a weekly basis then short term we could easily see 85/bbl crude oil. Could easily go higher if certain political events take place (terrorist bombing at Ras Tanura, Iranians actually do something,etc). On a purely seasonal basis we are now BEGINNING the spike period associated with heavy gasoline demand which normally peaks Aug-Sept.

One does not need charts to see what China has done thus far and will continue to do; just watch the tanker traffic and it is proof-positive they are gobbling up very large chunks of oil (and investing downstream which is their long term solution). A quaint phrase I use occassionally is that "there was one dog in the waterbowl and now there are 2." One can argue 9.5% GDP growth until they are blue in the face but the Chinese have not even begun to build their Strategic Petroleum Reserve. Ours in the States is nearly full at close to 687.5 mm barrels of oil (as of this morning) at an average price of $27.73/barrel (we are printing $73.15/barrel as I speak on the New York Mercantile Exchange). In the grand scheme of things this is not all that much (345 tankerloads).

Put in perspective with other things (YTD basis)?

Zinc up 71%
Silver up 62%
Copper up 49% (you can melt a penny and get more selling on the COMEX)
Crude oil up 26%
Gold up 20%
Sugar up 18%
Corn up 10%
Goldman Sachs Commodity Index Return up 8%

Again I would suggest that any solution is going to have to begin with U.S. citizens dumping SUV's and buying Hybrids and:

K1200LT's
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post #10 of 11 Old May 5th, 2006, 6:01 pm
 
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As mentioned earlier... I purchased and watched the above mentioned video as you suggested "The End of Suburbia". IMHO, it's a bunch of hysteria and I don't give it much credibility.

There's plenty of time and oil left before the sh*t hits the fan; as the supplies grow more precious, the prices will reflect that and we will have to make adjustments to the higher prices. The whole world will... including China.

Everyone involved - world wide - from the supply of the oil, to the demand of the oil are dependent on one another and this relationship will not end abruptly.

The wheels of change have already been set in motion and modifications to our energy infrastructure are being studied, changed and met out of pure necessity - capitalism at work; somebody (person or organization) wants to get rich from this predicament and will.

Strict internal combustion engines will slowly be phased out over time, making way for more efficient methods of propulsion, but even then, many people will pay the extra cost to operate the less efficient and nostalgic vehicles of this era.

I would be happy to take you up on your initial deal. I won't watch this video again nor share it with anyone. I'll send it over to you, if you still want to buy it, but I won't hold you to it.

Quote:
Originally Posted by midwilshire
Your reaction was the same as my initial reaction. I then set out to disprove a very smart (and very wealthy) friend's odd-sounding arguments, but I become convinced of their veracity.

Buy and watch the above-mentioned dvd as an intro, and if you still think alternative energy will get us over this obstacle comfortably, I'll buy the dvd off you + shipping. What's 90 minutes of your time to quell my "doomsday scenario?"

And what if I'm right?

BTW, the "past authors" to which you refer were three MIT scientists who wrote a 1972 report called The Limits to Growth for a group of businessmen called the Club of Rome. It has been updated as of 2005, and you may obtain a copy here.
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post #11 of 11 Old May 5th, 2006, 10:29 pm
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Of course! Thanks for watching it, and I value your opinion. I hope I'm just lured in by hysteria, but I can't disprove it, either. At any rate... PM Sent
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