<Hurricane Dean Update and Resource Aggregation Post The Oil Drum The Economics of Oil, Part I: Supply and Demand Curves>

62 comments on The Economics of Oil, Part I: Supply and Demand Curves (Detached Comment Thread)

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andytk on August 19, 2007 - 10:54am Permalink | Subthread | Parent | Comments top

I don't understand why you've picked $200/barrel.

Pretty much all of Europe's road transport fuel is taxed to the point where it would appear to be refined from $200 oil and Europe's economy hasn't fallen into a black hole in the last 20 years.

I'm thinking $1,000/barrel is more of an interesting breaking point.

I guarantee I'll still be driving my car at $500/barrel oil with today's salary.

Andy

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NeverLNG on August 19, 2007 - 11:28am Permalink | Subthread | Parent | Comments top

Today's salary will not be the same when oil is $200/barrel.

Also, at some point, animal and human power becomes cost competitive with oil. That might be $1000/barrel. It will also depend on the application. Tractors are cheaper than agricultural laborers right now -- that seems to be changing.

Of course, no matter how hard slaves flap their arms for however little pay, they will never be able to power airplanes, so oil will become a magical tool for the ruling wizard class.

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auntiegrav on August 19, 2007 - 11:44am Permalink | Subthread | Parent | Comments top

Today's salary will not be the same when oil is $200/barrel.

Something's gotta give along the way. I wonder where the breaking points are going to be. Housing bubble? Military costs? Medical costs? Weather/Hurricane/Climate costs? Social unrest?

When will the price of our lifestyles cause upheaval in those lifestyles? When will the market for 5000 sq ft environment blisters cause people without homes to finally pick up stones and rocks and Molatov cocktails and declare independence from the oppression of the petro-fired System of Systems?
When it does, at what point will they realize that fully 50% of them are only alive simply due to the cashflow of that System? Will the last gasoline be used to burn the last checkpoint? Or will the checkpoints prevail, with half of the people standing guard over the other half who are working in the fields?

Dire prediction? I don't think so. The market loves to create demand once it finds the most popular product. When the most popular product becomes violence, the market will sell to both sides every time until the "market clears".

Yeah, I think that is a good term. I'll say it again. "The Market Clears". Think of humans as being yeast, growing across the planet, consuming everything in the Earth market. Eventually, "The Market Clears".

Perhaps there is something wrong with waiting for the market to decide.

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JWhitland on August 19, 2007 - 3:18pm Permalink | Subthread | Parent | Comments top

Human and animal power will never again be competitive with machinery except in cases where flexibility (for example, mobility) is key. Even machines powered by bio-diesel are more cost-competitive and efficient than human beings in converting food (for example, sunflower oil) to work. Solar electric devices are even more so. Someone with a small engine and a few liters of oil, or with a solar cell and motor, will be able to outwork someone pedaling hard.

Remember, people have to eat all year round, and they need to eat even more when they are working. The caloric efficiency of human beings isn't that great (maybe 20-25%?).

One exception might be concentration camps, where the human beings in question are being worked to death.

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artaxt on August 19, 2007 - 5:14pm Permalink | Subthread | Parent | Comments top

It depends on how you measure efficiency. If you're talking about time efficiency, then I agree with you. If you're talking about energy efficiency, then I have to disagree. It is more energy efficient to make something by hand than using a machine.

- Scott
"Try sour grapes; you might like them."

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auntiegrav on August 19, 2007 - 10:14pm Permalink | Subthread | Parent | Comments top

Yes, but it isn't black and white. Even for energy efficiency, there are degrees of mechanization which enhance human productivity with very little resource consumption when compared with their use. Windmills to pump water, drills to get water, make holes in wood, saws, etc. Simple machinery can be more efficient than hand labor alone. The target resource consumption vs. future usefulness is what I refer to as Net Creativity. The most useful way I know to determine sustainability of a particular machine is whether or not the resources to build it can be made/obtained within a reasonable time and distance/transportation constraint, such as within 6 months and within a national border.
Animal power is often a poor substitute for machines. You don't have to feed the machines when they aren't being used. The ox doesn't work as hard as a horse, but can be milked most of the year. Humans are notoriously unreliable, especially if entertained and infatuated with machines. Proper application of machinery to enhance human ergonomics is something we have learned through overmechanization that can be very effectively applied to Descent Planning.

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wkwillis on August 19, 2007 - 10:37pm Permalink | Subthread | Parent | Comments top

You won't have much luck milking an ox. An ox is a castrated bull.

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62 comments on The Economics of Oil, Part I: Supply and Demand Curves (Detached Comment Thread)

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