204 comments on A further comment on "That's Oil, folks . . ."
Comments can no longer be added to this story.
Search The Oil Drum with Google
Recently on TOD:World
TOD:Local
- Streets: Utilitarian Corridors or Livable Public Space
- Summer Streets a Success!
- Plan for Hydro-Fracture Drilling for Unconventional Natural Gas in Upstate New York
TOD:Europe
- Oilwatch Monthly - November 2008
- The 2008 IEA WEO - Production Decline Rates
- The EU Strategic Energy Review: maybe not so depressing after all
TOD:Canada
- The Round-Up: October 24, 2008
- Compressed Air Energy Storage - How viable is it?
- Oil Megaproject Update (July 2008)
TOD:ANZ
Blogroll
Energy Sites
- The Coming Global Oil Crisis
- Die Off
- Dry Dipstick
- Energy Bulletin
- From the Wilderness
- Life After the Oil Crash
- Peak Oil Crisis
- Peak Oil News and Message Boards
- Powerswitch
- Rigzone
- Matthew Simmons
- Wolf at the Door
Environment & Sustainability Sites
- The Daily Green
- EcoGeek
- Eco Street
- Green Car Congress
- Green Options
- green.alltop.com
- Gristmill
- RealClimate
- Sustainablog
- Treehugger
- WorldChanging
Blogs
- The Big Picture
- Casaubon's Book
- Cleantech Blog
- Clusterf
k Nation (Jim Kunstler) - The Cost of Energy
- David Strahan
- The Energy Blog
- Entropy Production
- European Tribune
- GraphOilology
- jeffvail.net
- Mobjectivist
- Peak Energy (Australia)
- Peak Energy (USA)
- R-Squared
- Resource Insights
Finance & Economics Blogs
- Calculated Risk
- Ecological Economics
- Econbrowser
- Environmental Economics
- Infectious Greed
- The Mess That Greenspan Made
- Mish's Global Economic Trend Analysis
Organizations
“Data always beats theories. 'Look at data three times and then come to a conclusion,' versus 'coming to a conclusion and searching for
some data.' The former will win every time.”
—Matthew Simmons, ASPO-USA conference, Boston, MA, October 26, 2006
User login
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
Personnel
- Editors: Prof. Goose, Heading Out, Stuart Staniford, Nate Hagens
- DrumBeat Editor: Leanan
- Contributors: ace, Engineer-Poet, Gail the Actuary, jeffvail, JoulesBurn, Khebab, Robert Rapier
- TOD:Local: Glenn
- TOD:Europe: Chris Vernon, Euan Mearns, Francois Cellier, Jerome a Paris, Luís de Sousa, Rembrandt, Rune Likvern, Ugo Bardi
- TOD:Canada: benk, Libelle
- TOD:ANZ: Big Gav, Phil Hart, aeldric
- Technician: Super G
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
Step:There are a few like myself that are almost in the "save yourself" category yet notice that the link between oil supply/consumption and economic growth is extremely tenuous. The global oil supply plateau is now 2.5 years old and during that period global GDP has not plateaued, it has actually grown rather sharply.The link between global oil supply and GDP growth appears to rest upon the importance of the global auto industry and related expenditures.IMO, the old saying "what is good for General Motors is good for America" is still resonating through the subconscious of many posters (with slight variations). The economic model based on selling more cars every year globally is going to come to an end (and all the expenditures related to that).Is that the only basis for economic growth and wealth creation? Maybe. Maybe not.
What I would contend is more tenuous is the link between GDP and the "real" economy. I not refering to some bootleg off-the-books exchanges, but rather just the part of the "measured" economy where something of real value is created. All lot of what transpires now, in terms of money flow, provides little net benefit yet shows up as evidence of economic vitality. If we suddenly stopped making anything new, we could continue selling each other our accumulated stuff on Ebay and keep the GDP robust for awhile.
What constitutes value in a real economic context? Something (whether it be extracted energy, raw materials, a product, a service, or information) which enhances society's ability to produce or do more of the same. Otherwise, it's like an expensive fireworks display; entertaining for awhile, but then the lights go out and all that's left is the acrid smoke and diminished ability to hear.
I agree that there's more to life than "value" as defined above, and we will need to embrace that more in a future economy since the usual fix of "more stuff" always costs energy.
A few years ago I tried to get information on how many dollars changed hands in the NYSE, Nasdaq, and the Merc. I couldn't find the data on the internet or at the public library. The question arose after a talk with a stock broker who said the entire federal budget could be paid for by only a 2% tax on the stock market. After a little extrapilation I concluded that at least 90% of all economic activity in the US was not included in the GDP. Government taxes the dimes which change hands on Main Street and turns a blind eye on the dollars that change hands on Wall Street. Somehow the paycheck of the stockbroker is counted as production but what he sells isn't consider a good or a service. The King never taxes himself.
At the core of the correct answer to the problem rests the simple historical observation that "what kills GM is good for Toyota, Honda, insert any other car company name except "Ford" here". Since Toyota, Honda etc. all produce in America, the overall impact of the demise of a few players with crappy management will be small. More cars will be sold globally, despite PO. More cars will be sold which will use less energy on average and then overall. Energy to power these cars will be generated from renewables. There are no physical energy limits here that we could reach with our current technology. The only thing that has reached an inflexion point is the hydrocarbon mining industry.