The Oil Drum

I have also given thought to an agent based modeling approach to understand the behavioral response (or lack thereof) to peak oil.

Think for a minute about the major players (agents) in such a model--and what drives them. There are oil companies, who seek to maximize shareholder value. Higher prices generate short-term profits, but long-term value depends on the value of their reserves.

Then there are oil producing (net exporting) countries, who depend on oil revenues to maintain their economies. Their access to oil also gives them a bargaining chip in the world, but also makes them vulnerable to invasion by large, oil consuming countries (i.e. the next agent described).

Major oil consuming (net importing) countries have their own set of agendas. Their economies are / were built by cheap oil. Without cheap oil, their massive economies come to a screetching halt. Leaders in these countries may (or may not) understand the gravity of the energy situation, however, are personally motivated to stay in power. The need for votes may contrain what they are able or willing to do.

Then there are investors, who seek to maximize short and long term financial returns. However, their decisions are only as good as the information they are provided. In the case of oil, much of this information is provided by estimates and forecasts by major oil companies, oil exporters and oil consuming nations.

For each of the described agents (and there are more), several key question stand out. 1. Are each of these agents aware of the peak oil threat? 2. If so, what is their likely response based on what motivates them? 3. How do the combined responses work together to explain our current situation? 4. What are the likely scenarios going forward?

Simple rules, but complex outcomes to be sure!

Debbie

Edit - I left out one of the most important agents--John or Jane Q Public.