The Oil Drum

From informal verbal discussions (i.e. NOT from the horse's mouth), they anticipate a spike to $250 to $300/barrel which results in about -5% GDP shrinkage. This demand destruction allows oil to drop below $200/barrel and a +2% GDP rebound the following year. This in turn leads to +$200/barrel prices and stagnant economic growth thereafter as oil becomes scarcer and more expensive.

I try, with limited success, to reduce oil demand faster than depletion via higher efficiency and substitution. In the Colin Campbell world, it is a close race ! In the Jeffrey Brown ELM world, I would likely lose (not yet modeled).

The default oil conservation strategy, if all else fails, is reduced economic activity. In the ELM world, I strongly suspect that all the EOT efforts would do is reduce the rate of economic shrinkage and provide a non-oil transportation base with which to one day rebuild the economy around.

Best Hopes,

Alan