The Oil Drum

70 comments on Can Acts of God and Bush Explain the Plateau?

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Stuart Staniford on January 4, 2006 - 4:37pm

I guess my current view is my own particular mix of pessimism and optimism. The balance of the evidence at the moment suggests to me that there is likely to be a near-term peak in crude production (something that Freddy would not agree with), but that the post-peak decline rates will, at least for some time, be within the adaptive capacity of the economy, allowing at least some continued economic growth (possibly after a nasty short-term setback or two). That is something few "doomers" would agree to. I reserve the right to update my opinions based on new evidence at any time, however.

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Agric on January 4, 2006 - 10:09pm

Respect, Terrier, for doing the work and making such a good post when you already knew how it would turn out. The crux should come within the next year or two at most, can we increase from this plateau level or do we continue to bobble along it until we fall off steeply or gently? It looks like a plateau regardless of whether you stroke it or kick it.

Decline rates will be the key and I am less sanguine on that than you currently seem. My brain is semi-functional atm so I haven't responded on Dave's "The Extraction of Exhaustible Resources" which could be the most significant post I've read here. I fear what that implies, and think it will be = steeper than expected.

Like infrastructure, the economy is less flexible and adaptive than you presume, though that lesson may be a year or two ahead in its knowing - laws which appear true in an equillibriam state are sometimes found wanting when that equillibriam is disturbed.

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Jack on January 5, 2006 - 12:49am

Thanks Stuart. My own view mirrors your almost exactly. My faith in the adaptive capacity of the economy comes more from a belief that we can sheer off significant amounts of current use, rather than an expectation that alternatives can be put in place in the near term.

So, I do not think the optimistic demand and supply projects from EIA, IEA and others will be met. Rather, I think we will make do at a lower level of consumption and production. I agree that a nasty short-term set back is a distinct possibility. I also think it is likely that the impacts are not uniformly distributed. I don't see a global crash, but do expect that those who are more dependent on cheap oil (McMansions/SUV owners, Some Asian economies) will be hurt worse.

However, I am still optimnistic enough to think that the ignorant will be hurt less than the overreacters.

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SRSrocco on January 5, 2006 - 1:27pm

Stuart, you bring up an interesting theory that post-peak oil will allow some economic growth due to the adaptive capacity of the economy. This might be true. Is that you're idea of optimism? I mean, what is the use, if there is some economic growth for a tad bit more, while the whole American system of daily living implodes just a few years later?

The banking sector is built upon the fact that energy must be increased in order to keep the system going. What will people do when those few years of the so called "economic growth" are gone...and we are in a long depression? Things today are much different than in the 1930's. We won't be able to ramp up the industrial factories or build large infrastructure projects...as the cheap energy will not be available.

If one's idea is to make as much money as possible before the collapse really starts to take place....buy a small farm in the country as well as gold and silver...I don't know what a few more years of economic growth will do to people who want to live a long life and watch their children grow.

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