The Oil Drum

197 comments on DrumBeat: May 21, 2007

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GreyZone on May 21, 2007 - 4:50pm

Let's state your proposition the other way around - a 3% shortfall in meeting demand caused a doubling in price. What will another 3% shortfall cause? And another? And another?

Also, you are nitpicking. It's still exponential growth. A 4% projected growth rate results in doubling of demand in 17.5 years. A 1.5% projected growth rate results in doubling of demand in 46 years. Do you seriously think petroleum production can grow to 170 million barrels per day by 2053?

Ghawar Is Dying
The greatest shortcoming of the human race is our inability to understand the exponential function. - Dr. Albert Bartlett

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TechGuy on May 21, 2007 - 8:06pm

>Let's state your proposition the other way around - a 3% shortfall in meeting demand caused a doubling in price. What will another 3% shortfall cause? And another? And another?

It won't be linear. Once past peak production, economic growth will slow or end. This will put a crimp on demand growth. Thus the price of oil will not go to infinitely as supply slowly dwindles to zero.

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“This order [i.e. capitalism] is now bound to the technical and economic conditions of machine production which today determine the lives of all the individuals who are born into this mechanism, not only those directly concerned with the economic acquisition, with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt.”

—Max Weber, 1905