 | 2007 - The Year in Review | The Oil Drum: Europe | New Nuclear Reactors For The UK: Is This Really A Good Idea? |  |
51 comments on Demand Destruction: Myths and Reality
Comments can no longer be added to this story.
| Show without comments | PDF version
51 comments on Demand Destruction: Myths and Reality
Comments can no longer be added to this story.
| Show without comments | PDF version
User login
Personnel
Editors
Contributors
Peak Oil Primers
Archives
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
- November 2008
- October 2008
- September 2008
- August 2008
- July 2008
- June 2008
- May 2008
- April 2008
- March 2008
- February 2008
- January 2008
- December 2007
- November 2007
- October 2007
- September 2007
- August 2007
- July 2007
- June 2007
- May 2007
- April 2007
- March 2007
- February 2007
- January 2007
- December 2006
- November 2006
- October 2006
- September 2006
- August 2006
- July 2006
- June 2006
- May 2006
- April 2006
- March 2006
Vital Trivia
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
GAIA Host Collective
My interpretation of this factoid is that today a much larger percentage of GDP is dependent on a smaller amount of crude. One result of this is that a smaller dip in crude availability will likely affect a larger portion of GDP, opposite of what many pundits are implying.
The other implication of this factoid is that in the 70's, since less GDP was dependent on each barrel of crude, a greater cutback in crude consumption could happen with a smaller impact on GDP. I believe that the statistics bear this out. In fact many optimistic economists point out this fact about the 70's 'big dip' in crude consumption without making the connection that now things are different and a given drop in crude consumption will affect a large portion of GDP. This pressure, along with the decades of cheap credit, is keeping our consumption high in spite of the prices.
This may be a reason why the economics of the situation are going to reach a different kind of breaking point than we reached in the 70's. A family's actual cash available to spend is easy to calculate if there is little or no credit involved, and spending stops abruptly with a drop in consumption like the 70's crude oil 'dip'. With lots of credit, a family (or society as a whole) can continue spending until the whole credit structure freezes up. We seem to be approaching this point rapidly. It is economic overshoot.
Nice concepts. Maybe it makes sense to take a harder look at other countries say Japan ? Europe's a bit warped in a good way because of the high fuel taxes. I think Japan/Korea might have similar dynamics to the US but both places in general have better public transport and thus substitution.
I think maybe one of the big issues that your saying in a round about way is the US may be sensitive to oil prices since it has a small cushion for substitution. Substitution includes conservation and alternatives. So the real issue is as oil prices rise how well can a given economy substitute and keep its economic vigor if you will. Off the top of my head the US and Australia are probably the least flexible economies vs oil.
Europe can at some point start scaling back taxes or better aggressively pour gasoline taxes into mass transit and localization.
I think that increasing oil prices are going to uncover structural problems in various economies over time. Even though the OECD economies are similar the ability to substitute for oil seems to vary fairly dramatically across countries and even regions.
Take Arkansas my home state a lot of the poor people live in rural areas with inefficient large trucks as transportation. These people will be hard hit by rising fuel costs. The inner cities and even close in suburbs are in poor shape and this is in general where a lot of the black population lives. Something called white flight played a large role in the shifting demographics of the cities and its still a force.
What I find interesting is that fuel prices will force the poor whites to move back into and integrate with the poor black population. Also the wealthy will reverse their migration back towards the close in suburbs.
You can see that attempts to move to lesson dependency on oil can have some real social implications esp in areas that have large rifts.
Knowing the south what will probably happen is the government will mark a neighborhood as being revitalized and will emminent domain most of the homes and take them at low prices then the builders will refurbish and sell them to the wealthy. I can't imagine that the poor blacks will be allowed to profit by this change of fortune.
I too am from Arkansas and have seen the same trends.
Reverse white flight from Benton, Conway, and Cabot?
Everything from Shackleford out to Pinnacle and Ferndale
will die on the vine.
Asher, University, to Baseline and Mabelvale will be
refurbished.
I got that right?
Yes thats pretty much what I figure.
My parents live out Col. Glenn :)
I grew up in Twin Lakes for example and I think that area would grow.
When I was a kid white flight was at Baseline for example.
And sorry to the rest of the world but Southern Racism is complex.
Now wealthier blacks and whites are pretty much fully integrated and not a lot
of racism outside of the older people. But the poor have some serious racism poverty issues.
The white flight situation in Little Rock is also closely tied to some very messed up
schools. You have something similar in California actually but at least CA kept neighborhood schools so its possible to have decent schools if a area gets refurbished.
I was actually surprised to find CA had problems similar to Arkansas.
In general public education and our "hidden" class system have never worked well together.
One reason I like smaller towns is the rich and poor are forced to work together since they
cannot afford two schools. Anyway suburbia and class problems and education and tax revenue are tightly linked. At least in the South the suburban sprawl is driven by white flight and associated attempts to localize tax money.
The whole cesspool is going to be forced open as peak oil advances.
And gasoline prices will cause further division between classes and damage tax revenues.
I don't think Americans realize how much rampant suburban expansion has allowed us to avoid dealing with our internal problems. Now not only will we have to deal with them but they will worsen.
Small cars are cheaper than trucks. Motorcycles are cheaper still. Scooters are even cheaper. I do not see how poor people will be unable to adapt.
Plus, rich people selling big cars will have to sell them for less in order to sell them. That'll cut transportation costs for poor people.
People have many ways to adapt.
I would say that in many ways the economy is less vulnerable because we waste more. Look at car fuel efficiency, vehicle size, and acceleration. If we returned to the average vehicle weight of 1985 and to 1985 average acceleration with today's technologies for using fuel efficiently we could probably boost fuel efficiency by 30% to 50%.
We have lots more technologies available to use energy more efficiently. We have new types of insulation. We have much more efficient ground sink heat pumps. We have hybrid technology and much better batteries coming.
I'm more optimistic by nature. I see big problems and wrenching adjustments coming. But I also see vast capabilities we can bring to bear and lots of ways we can adapt.