The part I don't understand is what Matt is saying is the cause of the price drop if not demand drop. It doesn't hang together.

The other part I have always disagreed with: we should be working fast and furious to retrench, to change our way of life to one far less dependent on energy in ways I have described previously. It doesn't make any sense to spend 50-100 trillion trying to delay the unavoidable, and indeed steppen it when it does occur.

I wonder if Matt's post isn't like some of the EIA talks I heard by economists. We made Hypothesis A, B, and C. (The price run up and decline was caused by speculators; the price run up and decline was caused by companies acting as oligopolists. etc.) None of them worked. I think all it proves is that the approach being suggested isn't right, or perhaps isn't being measured correctly. It doesn't seem like it gets Matt very far.

I think I agree with you on the second point, but many disagree. Why spend trillions on wind turbines and other infrastructure that is expensive and may not last very long. We just have to power down from perhaps a bit higher, but on a steeper slope.

Hello;
Long time reader, first time poster. While I agree that society needs to power down, I think Matt realizes this also. In many speeches, I have heard him say that his big worry was true oil shortages. While most people on this site realize that our “Just In Time” world leaves us vulnerable to many single points of failure, the average person just assumes things will be BAU. Most cities have only about a week’s worth of food on hand. Things could get real ugly real fast if the transport trucks stopped because of fuel shortages. How many meals are we away from collapse?

I think Matt wants to make people realize that things are bad and are going to get worst. The problem is that nobody truly believes him. They are hoping for some miracle solution that will allow BAU. The problem is how do you get people to face problems they don’t know exist and they feel powerless to change?

All solutions for alternate energy will take decades to make a real difference to society as a whole. How do we get from here to there? How do we convince people and governments that we need radical change? Remember it is not only the king who shoots the bearer of bad news. I know, I have the scars to show for trying to talk to people. I have lost more than a few good friends when I tried to talk to them about the coming problems. I now only say that “I will be damn if I give the greedy oil companies one penny more than I have to.” This is acceptable but all talk of oil shortages is not.

I think Matt is trying to change the “Happy days are here again” attitude by harping on the aging workforce and rusting assets. This is a message that is not too far out in left field for most of his audiences but he still is mentioning that there no magic Shangri-La of oil that will save our behinds.

I don’t blindly accept everything Matt says but I respect his attempt to get people to stand up and take a clear look at our energy situation. It is blacker than Matt lets on but it would only turn off the audience and they would stop listening if he was talking about how bad things are really going to get.

I think we can power society down and it does not have to be a collapse but only if we have very great leaders. So I guess it is time to find a quiet hidey hole. :)

I really enjoy the web site, lots great information. Keep up the good work!

Thanks for your thoughts, Peter. You make some good points. Matt works hard at what he does. We probably see so much of Matt that we become more critical than we should be.

Matt is one of the peak oil greats, along with Deffeyes, Campbell, and several others. There's no disrespect in disagreeing and questioning them on this or that. In that sense, there's nothing wrong in being critical (or getting criticized in turn for that matter!)

I think he doesn't think the demand drop was that bad to cause a 75% drop in price. Sure there was price drop due to "demand drop" but not 75% percent.

I agree on that "+50Trillion" -- no point of building things that will be obsolete in 20-30 years. But I think his audience is a bit different from TODers -- probably mostly oil/gas people and the investors. So he told them - "here is the cost". It's up to them to spend or not spend if they think they can recover it.

Another interesting point is -- what is the true cost/value of oil? Surely, at +$100/bbl we saw a huge drive to exploit this resource and thus saw a nice gain in the economy at the expense of the environment and future cost. Yet, he thought it was good b/c the economy was "good". So for Matt, he still tried hard to make sure this engine of "growth" running -- but for most of us, we want a different engine all together.
It's weird -- we all are in this catch-22. On one hand, the low price of oil stopped people from exploring more resources but yet it encouraged people to spend wastefully. But for sure, we all know that even at $150/bbl; enough people are willingly to pay for it. For a 100% increase in price; the demand destruction is just 5% (or even less). If you manage to monopolize the oil market --- then even at $300-$500/bbl, there are still a huge huge demand for the drug.

I think part of the problem is that demand destruction that takes place with high priced oil is not toward the oil products themselves. Instead, people cut back their purchases of restaurant food, new cars, and all kinds of goods that they can easily cut back on. One ends up with a round about cutback in oil. In the US, the cutback is clearly there, if you measure it correctly. Part of the problem may be the confusing EIA weekly statistics, that are often revised downward.

It doesn't take a very big drop in demand to cause a big drop in the price of oil.

According to the EIA's STEO, last month, the previous 4 months had seen consumption above production. This would normally result in much higher prices but there is obviously some other factor at play. Speculation?