tag:blogger.com,1999:blog-8861605.post113733693227993322..comments2024-03-24T11:01:27.668-04:00Comments on Resource Insights: Demand Destruction: Who Gets Destroyed?Kurt Cobbhttp://www.blogger.com/profile/05330759091950742285noreply@blogger.comBlogger12125tag:blogger.com,1999:blog-8861605.post-71597784408212518192008-08-25T10:58:00.000-04:002008-08-25T10:58:00.000-04:00I just want to say that I wrote a promotion for a ...I just want to say that I wrote a promotion for a resource newsletter about peak oil, back in late 2005. <BR/><BR/>The opening line, "One of the most devastating economic events in history will happen on July 2, 2006. That's our best guess..." <BR/><BR/>The promo was a huge hit, even though we took a stab in the dark at the date. Or should I say, we extrapolated based on research. <BR/><BR/>Never imagined we'd get it so right. But in hindsight, I think it's clear we pegged it not just to the month or date... but possibly to the hour (said only half tongue-in-cheek.) <BR/><BR/>Peak oil has come and gone. Now we're enjoying the rush of the breeze past our faces, as we fall off the cliff.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-77461073791617401732008-06-10T00:43:00.000-04:002008-06-10T00:43:00.000-04:00Thank you for this post.Thank you for this post.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-83063612893161852222008-01-16T22:10:00.000-05:002008-01-16T22:10:00.000-05:00Should we have famines? May be we should starve al...<I><BR/>Should we have famines? May be we should starve all economists to death!!</I><BR/>Economists who are predicting peak oil are simply describing the way things <I> are </I>, not the way things people wish them to be. <BR/><BR/>Do not blame the economists for telling the truth.Michael Ejercitohttps://www.blogger.com/profile/10707862691472293497noreply@blogger.comtag:blogger.com,1999:blog-8861605.post-70513698035801233772007-04-15T03:44:00.000-04:002007-04-15T03:44:00.000-04:00how to achieve demand destruction. The key issue s...how to achieve demand destruction. <BR/><BR/>The key issue seems to be how to make the japanese export the same quality finished goods, yet live a very rudimentary life style that doesn't make unjustified demands on world commodities, in other words, the koreans and japanese should be made to produce the same quality export goods but their lifestyle should be reduced to that of ethiopia and somalia. They should only need to import just enough world commodities to justify assembly of finished goods and parts for export to the west. <BR/><BR/>They should not be driving Audis and BMWs or flying to europe and america by the millions for luxury vacations, yet they should still be able to stamp and cast their toyota and honda parts and send them to the west for final assembly. How can this be made to happen? The point is, their excessive demand on basic world commodities is not legitimate or justified considering western interests, and the value of their finished goods. <BR/><BR/>China, japan, and south korea don't need to consume half the world's oil supply just to assemble large flat panel TV's or to stamp and cast car parts, or to produce the plastic junk for walmart's shelves. If china, japan and south korea are denied unjustified oil and commodity imports, the west will once again become the only market available for oil exporters of the middle east to sell into. <BR/><BR/>The USA, canada, the UK, new zealand, australia, amd mainland europe can combine military power to permanently blockade all oil tanker and raw commodity imports into china, japan, and south korea that are in excess of that needed for the legitimate production of finished export goods for the west. This demand destruction will allow oil prices to fall dramatically and the problem of permanent depletion of easily extracted oil will be pushed considerably into the future. <BR/><BR/>The western military should be rationalized by restructuring itself into a biased profit making organization that rations the flow of commodities and finished goods on the worlds oceans and thereby adjusts the economies of china, japan and south korea to best serve the interests of the west. The current occupation of iraq is a clumsy attempt to regulate the influence of china, japan and korea in the oil rich regions around the persian gulf. A much more comprehensive plan should be implemented to modify the oil and commodity consumption patterns of china, japan and korea. <BR/><BR/>It's interesting to know that china, japan, and korea collectively own a quantity of dollar denominated assets that approach the size of the GDP of the united states, the US government should simply repudiate those dollar claims in order to prevent china, japan and korea from retaliating by disrupting dollar denominated markets.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1142510802588070332006-03-16T07:06:00.000-05:002006-03-16T07:06:00.000-05:00Patrick's penultimate sentence is also a magnifice...Patrick's penultimate sentence is also a magnificent giveaway, undermining most of his previous argument. If "the market has gone from signalling long-term crude oil prices of around $30 3 years ago, to [now] showing long-term energy prices in the $55+ range (looking out 3-5 years)", then<BR/>1. "long-term" in market terms is clearly not long enough for market signals to produce the technological and organisational changes required to overcome problems associated with decreasing supply without 'demand destruction'<BR/>2. The market , 3 years ago, was giving an incorrect price signal, by a factor of 80-100 percent. Which is quite a lot, IMOAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1142360413220756292006-03-14T13:20:00.000-05:002006-03-14T13:20:00.000-05:00Patrick's last sentence is interesting: ...signal...Patrick's last sentence is interesting: ...signalling oil companies to invest. Indeed, they are *not* increasing investment in exploration, nor making *any* investment in new refining. They are investing in known reserves - by acquisition - and transport, particularly pipelines. There has not been a giant/super giant oil discovery in 20 years anywhere in the world. Saudi Aramco has spent billions on exploration and not found any signicant, producible new reserves since the '70s.<BR/><BR/>The oil companies already know that the game has changed.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137650174261788912006-01-19T00:56:00.000-05:002006-01-19T00:56:00.000-05:00Another point:Oil is "scarce" largely because POLI...Another point:<BR/><BR/>Oil is "scarce" largely because POLITICS gets in the way of proper use of resources.<BR/>Cases in point - <BR/>1. ANWR. <BR/>2. Iran.<BR/><BR/>Stopping the drilling in ANWR and Iran's threat to cut off oil both increase the price of oil. The first case, $600 billion worht of oil (whose revenues could help US government quite a bit) has been taken off the table. So too offshore drilling, which holds about $1 trillion worth of gas off the Cali coast, etc.<BR/><BR/> oil is high right now because of a threat of future supply disruption - Iran. Again, politics creates that threat. In Nigeria the supply disruption is real.<BR/><BR/>Governments have (ab)used their powers to nationalize or extort the wealth of oil producers for their own benefits. The consequence of that is that in many countries, the investments are not made to improve the extraction and use of oil.<BR/><BR/>It's a sad fact that oil is so valuable, it encouarges power-mongering (eg Iran and Chavez in Venezuala), this creates socialism in many countries, which leads to poverty. Ironically, most OPEC nations are poor nations, while resource poor countries like Japan, Taiwan, Ireland, South Korea, now do well.<BR/><BR/>The world's lack of faith in the free market is bizarre and disproven by history time and time again ... why do so few people turn away from the engine of prosperity and cling to philosophies that produce misery tyranny and poverty?<BR/><BR/> this disagreement with the 'market' is mistaken:<BR/><BR/>"Market participants are unlikely to see the peak coming. This means that prices will only start to signal that alternatives are needed for oil long after it is too late to prevent tremendous disruptions."<BR/><BR/>if the 'market' disagrees with you, CONSIDER AT LEAST THE POSSIBILITY THAT YOU ARE WRONG AND THE MARKET (wisdom of crowds) IS RIGHT.<BR/><BR/>In any case, the market has gone from signalling long-term crude oil prices of around $30 3 years ago, to nove showing long-term energy prices in the $55+ range (looking out 3-5 years). Big change and a signal to oil companies to invest.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137485762938402392006-01-17T03:16:00.000-05:002006-01-17T03:16:00.000-05:00There are multiple milestones on the way to the wo...There are multiple milestones on the way to the world's oil production rate hitting a peak. One of them is that conventional light, sweet crude oil (from pressurized oil fields on dry land in a moderate climate) will (has?) peaked before the sum of the remaining conventional oil plus harder-to-get (offshore, deep water, polar, etc.) and harder-to-refine (heavy crude, tar sands, shale oil) combined production rates peak and go into decline.<BR/><BR/>During this phase after conventional light, sweet crude oil production rates peak and before total oil production rates peak there will be price increases and price instability (already happening now) inflation (already happening now) wars over oil (already happening now.)<BR/><BR/>Based on the 200 day moving average price of light crude oil on NYMEX having gone up with no signs of going down continuously since the start of 2004 it is quite possible that we have reached this intermediate stage.<BR/><BR/>All hell has yet to break out as we are still able to raise total oil production rates.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137393763190566952006-01-16T01:42:00.000-05:002006-01-16T01:42:00.000-05:00Even during a famine, there is a balance in demand...Even during a famine, there is a balance in demand and supply of food. Some just don't eat and starve to death (according to economists, this is called 'DEMAND DESTRUCTION').<BR/><BR/>When there is oil shortage, some will freeze to death and some will starve to death -- it is that simple -- that is how you destroy demand.<BR/><BR/>Should we have famines? May be we should starve all economists to death!!<BR/><BR/>Romesh ChanderAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137384504273295682006-01-15T23:08:00.000-05:002006-01-15T23:08:00.000-05:00I think that the peaking of conventional oil produ...I think that the peaking of conventional oil production is important. There is no substitute for conventional oil when you look at the cost to extract it. Demand destruction for conventional oil is occuring. Most people reading this blog are probably in a position where they do not feel it much, but the effects of the conventional oil peak are being felt by poorer people in poorer countries.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137354216317290392006-01-15T14:43:00.000-05:002006-01-15T14:43:00.000-05:00There's no evidence, actually, that the peak has n...There's no evidence, actually, that the peak has not already occurred or won't occur this year, 2006. (It is famously seen only in hindsight. Thus it is too soon to say that 2005 wasn't the peak year). Some reports say that the peak for conventional oil production took place in 2004! That's not synonymous with the total peak, but it's an indication to me that the total peak is close at hand. Given this, the notion that we have 10 or 15 years before peak seems optimistic, even if it, too, is too close at hand to help us avoid destabalizating demand destruction. <BR/><BR/>What I'm saying, actually, is that your perspective on demand destruction --as a societally-destabalizing hardship for millions of people-- seems right on. And as other articles have pointed out, much of the USA population, at least, has very little leeway in the amount of oil consumption they can let go of (e.g., for commuting to work, for affording food, and for heating their homes) without triggering big destabalizing forces in the USA culture/economy as a whole. <BR/><BR/>I think this means that pillagers do have some sort of future --even if it's ultimately at the receiving end of another destabalizing factor: a shotgun blast.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8861605.post-1137352135786131432006-01-15T14:08:00.000-05:002006-01-15T14:08:00.000-05:00I take it you think the Capital One commericals ar...I take it you think the Capital One commericals are incorrect, and the pillagers actually do have a future.Anonymousnoreply@blogger.com