Some Perspective on Oil Prices
 

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This graph of course assumes that the government inflation data is correct, which is rather questionable at best. (Crude oil prices are now around $70USD/barrel, after highs of $75.)

We are approaching a world of higher fuel prices. It's difficult for the average person to know what to think about whether the Peak Oil hypothesis is a correct explanation for what is happening or will happen. The alternative is to believe that the price of oil is artificially high because of collusion among oil producers, or because of the Iraq war (let me know if there is another reason that would dispel the Peak Oil hypothesis). I suppose there is also abiotic oil. However, if the abiotic hypothesis is correct and there is a lot more oil around than we see, I'd like to know why it isn't being developed fast enough to lower the oil prices.

The Iraq war hasn't really impacted fuel supply that much. Pre-2001, Iraq was producing only 25% more than it is now. On the world scale, the difference between what Iraq could produce and what it does is less than 5% over a total of 4 years. So I don't think that Iraq really explains oil prices.

Anyway, sustained real oil prices will have a huge impact. One real impact will be lower discretionary income for everyone, as the staples of life (food, and fuel costs in everything) increase.

The car necessitated by this climate will be cheap and no frills, much like a commercial version of some of the car prototypes here. One difference between a future we are seeing now and the 1970s is that consumers have the internet, and the early adopters now have means (instantaneous aftermarket fuel economy measuring devices) to compete and compare different vehicles. The smart early adopter is leagues ahead of people 35 years ago.

He can research drag coefficients, effect of weight, engines etc. on fuel economy easily. He can find a site like this one and get the tools to understand FAST. Sooner or later, that will transfer into commercial pressure.

I'll tell yeah why its high. We use more and produce less. And we pay it! Same issues with steel, cast iron and yellow metals. Ive been watching this for years.

Living in Oklahoma, working around and in the the Tulsa metro area gives one a good look at a working model of the indrusty as a hole. Tulsa isnt the oil capital of the world anymore. But the system is still intact and the old money is still here. I myself use to own striper oil lease's and produce. Hell theres a pluged well buried in my back yard where I live in Okmulgee.

We have huge amounts of oil still here in Oklahoma. It just dosent flow anymore. The down hole psi is gone so it has to be pumped. Pumping/lifting oil cost alot of money.

Major oil producers pull out of lease's and formations when the wells no longer flow. They then turn it over to smaller producers to pump the lease's. It's here when the prices of metals came in and hurt the smaller producers. then the well's are left as dormant. The truth is there are still thousands of barrels of oil left in the formation.

Sorry for the ramble.

Point is there are millions of barrels of oil just right around here left setting and billions un tapped. About 50% of the states in the US are oil/Nat. Gas producing states. We have huge reservers.

The problem is we can use it with our Suv's, plastic containers, underware, toys ect. ect. faster than we can find it and produce it in a cost effective manor. I look around my own home and there are barrels of oil and thousands of cubic feet of nat. gas used to make my home.

I applued those here on this site that have picked up there older small cars and refurbed them and are getting good FE. The drivers here that have kept there metro's older civics and other cars going and doing what they do best. The actions of these people has saved more energy than any three current hybrid owners in the big picture. When I found this site it made me long for my old festiva and even spured me into looking for one again to refurb and make a daily driver. But I just cant find one thats even semi straight and worth my effort to rehad.

I honestly beleive we are no where close to running out of oil or nat. gas. I beleive mother earth is always produceing for us. We just need to change how we use it and the levels that we use it at. The last frontier for mankind IMO is the substrate under our feet. We seem to know far more about space than we do the ground we walk on!

In closeing I support the oil company's and producers whole heartly. Nobody gave a crap about us when we where going under. I shut down when oil bottomed out at five dollars a barrel. I could stay alive at six bucks a barrel and do ok at seven dollars a barrel. While everybody was driving around on one dollar a gallon or under gas and living large,, I was looseing my shirt. Even today in our local production around here. Oil is at seventy bucks a barrel,,, the local producers are lucky to get fifty seven dollars a barrel whether there selling out of tanks or on a pipeline. And this is for some of the best crude in the world. Oklahoma sweet is the best in the world,,, bar none. Theres just not enough of it to mandate pricing anymore.

or because of the internet he can ensure that the only pollutants released in the 'commute' to his office are the methane from last nights burrito.

So basically, what you are saying is that the average person can expect rising fuel prices for the rest of their lives? If so, that means that we will soon have the impetus for some decent FE cars being designed. And hopefully, soon we can see the SUVs driven off the road.

I suspect this is going to mean a bit of a die off is due. That won't be pleasant.

Thisisntjared:
You have a point about telecommuting. However, it will be limited to mainly information workers. If you understand the IQ bell curve, you will also understand that not everyone can be an information worker, so this isn't a total solution. (Yep, no magic bullets. You need a full clip.) And sometimes I forget this is actually gassavers.org, not buildyourownFE car.org

Another point is that at the moment, the primary export of the USA is debt. Eventually someone is going to want their debt paid in real goods, not paper, as all creditors eventually do, and especially when there is more debt floating around than the ability of Americans to pay it back. When they do, the "service economy" of the US will go belly up, and telecommuting will be less viable. However, this will also result in a move to closer to third world status, or early 20th century American living, and consequentially, less gas used.

Debt is 40 Trillion + 40 Trillion in medicare/social security, 11 Trillion actual (M3), 12.5 Trillion GDP (which is likely overstated). The US needs to borrow money just to keep the economy going, otherwise interest payments eat up the money circulating in the economy, no one spends any money/gets paid, system collapses.

In borrowing more money, the system becomes more insolvent, until a point where you have either hyperinflationary or deflationary collapse. I suspect this time we will see hyperinflationary collapse as more money is printed, devaluing the dollar. Anyway, at that time no amount of talk on CNN about America's strong economy will enable Americans to buy more cheap oil and fund their lifestyles.

Thats a ugly picture you painted there. But not real at all. The fact is America's debt is the worlds debt. Canada, the UK, Downunder all the major players are willfully and in ubber debt. If the dooms day you painted was real it would have happend 100 years ago. If America called in all thats owed to her in loans and development alone we have sponsored the world would crater. The money at the levels folks make a big deal about really isnt money at all. Its trust and action. Theres not enough gold or silver in the world to fund what we in America use muchless the world. It then becomes no more than a notion of action. Or better yet working fiction.

i was just joking man...

either way those that can telecommute are still really having trouble affording that liberty. as for the rest of the economics discussion, im out.

Actually, more like 75 years ago. The last time the US debt/GDP ratio got over 250% was back in 1932. It's now around 400%. (And it has only been higher than 250% since about 1998 or so.) However, the unfunded liabilities of medicare and social security bring that figure in reality to more like 800%.
Perhaps. Although not a necessary condition for collapse.
?
You got that right. Eliminating the gold standard and transitioning to pure fiat bought some extra time - at least a generation. We've suckered or coerced the rest of the world into holding worthless US paper assets - a fiction. Meanwhile the majority of America's industry has been exported to Chinese slave labor camps.

So when it comes time to call in those loans, for the holders of US debt to actually get something for their money, good luck. It will be like trying to get a penny from a drug addict who has hundreds of thousands of debts and no means to pay any of them.

America (and the world) is kind of like a nest of ants who have discovered a massive pot of honey (oil) that someone has left open in a house while they were on vacation. But imagine that the pot is shaped like an inverted cone. When the ants first come to feed, there is plenty of room at the edges. So the queen is going overtime, manufacturing more children.

The exponential birthrate causes more and more ants to line up at the sides of the honeypot, until no more can fit. Meanwhile the queen has a huge number of eggs waiting to be hatched, and several new colonies are coming online, also wanting to feed at the honeypot.

Of course, the ants don't want to believe that the honey is going to run out, any more than a plague of mice wants to believe that the freak summer is ever going to end, or deer in the absence of predators (both wolves and humans) want to believe that there isn't enough grass to go around for everyone.

And we don't want to believe that our own honeypot may, and most likely will, splutter out. We (except for people here) don't make plans for this eventuality. Rather than lowering our consumption, we call a Cd of 0.3 low and pay more attention to "styling cues" than mpg. Rather than suffer through the ignominy of wearing three or four layers of clothes in the winter, we walk around the house in a T-shirt (or something fashionable that costs three times as much and warms us less!) while our central heating does the work of warming us.

This sort of thing will be reflected in interest rates and rising inflation. As those lenders see that there is no reasonable way that future dollars will buy what they once did, they will require yet more future dollars to give you some money now.

For example, say that there are 80 million barrels of oil per day being consumed (and of course, all the follow-on products that these virtual slaves produce such as food, clothing, plastic trinkets, various other resources mined etc), and 11 Trillion dollars of US dollars.

In the future, say there is an extra 50% of world population, 20 Trillion US dollars, chasing that same 80 million barrels per day. What happens is that the real price of oil goes up and the nominal price of oil more than doubles.