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Title: from Texas_Engineer, posting at The Oil Drum
Source:
drumbeat, December 26, 2011
URL Source: http://www.theoildrum.com/node/8766/860272
Published: Dec 26, 2011
Author: texas engineer
Post Date: 2011-12-26 18:29:06 by lead.and.lag
Keywords: None
Views: 1745
Comments: 87
Human beings are not creatures of facts and logic - they are people who live in stories. This is not new - it has always been that way. We have certain collective narratives that almost everyone automatically accept without further thought. It is how we make sense of the world. These narratives keep us sane by allowing us to filter out the hurricane of information swirling around us daily and making some sense of it. The current narrative that most people subscribe to is that economic growth will eventually return or we have plenty of oil but the government is not letting is drill for it. For that reason I am not convinced that you will ever convince the average citizen (not a technical person) by showing them data. I am a data person and I have tried it with my family and their eyes glaze over. So I think you can only change people's views is by constantly telling them a different story - one that is consistent with their current experience. It worked pretty well with my family. A story something like this: If peak oil is a possibility - what would it be like? Well for starters the peak oil story is not about potential oil under the ground. That oil is irrelevant because it cannot be used. Peak oil is only about one thing - the ongoing flow rate of oil into the economy. For all of the last century and up until about 2005 that flow rate grew steadily. But that flow rate pretty much came to a halt in about 2005 and for the last half decade could not grow. And as you would expect the global oil price started to rise. That's what happens when supply cannot keep up with demand. Economists told us not to worry - Mr. Market would immediately react with increased supplies, reducing price - but it did not happen. The global oil price (Brent Crude) is now consistently above $100 per barrel after staying below $20 for most of the last century. This is what peak oil is like. This is what peak oil was predicted to be like. High energy prices eat away at the economy by pouring sand into the gears of the economy. Every country in the world tried to compensate for this slowdown by increasing debt. The world is now ludicrously broke - with no chance of paying off this debt bubble. This is peak oil - it is not about resources under the ground - it is about oil production rate - and high oil prices. Don't tell me peak oil cannot happen - it is happening. I have personally found that my family is stumped when I present this story in this way. They don't have an answer. But the story caused a few of them to ask to see some data. Then I showed them the data. Now they are worried and they hate me :-)
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Begin Trace Mode for Comment # 19.
#3. To: all (#0)
"Peak Oil" is a bs theory used by people with a vested interest to keep oil and gas prices high. Do you recall the so-called "gas shortage" of the early 70's? I do and I remember it well. Long lines of people waiting for gas and actually getting into fights over it. And for what? I told people at the time that it was a scam by the oil companies and when they got the price where they wanted it--which at that time was about one "dollar" a gallon--the gas would flow freely again and you wouldn't hear any more bs about any "shortage." Exactly what happened. There is plenty of oil and gas and lots of it here in the US.
why were oil prices so low for so long? what changed? whatever changed, why did it change?
whatever changed, why did it change? Rapid devaluation of the dollar which is propped up by dollar for oil hegemony. All pay more to prop up the dollar, which is the currency for oil exchange and is in rapid decline because it is a FIAT currency.
does a BMW or toyota cost five times more now than it did in 2001?
In 1971, prior to Bretton Woods Oil/Dollar hegemony deal, a stamp was eight cents and today it is 44 cents. The same analogy can be made in cars, coffee, metals, clothes, power tools, etc. This is because the DOLLAR IS DECLINING IN VALUE. Actually, the goods should cost less due to less labor intensive mechanisms to create goods......however the increase is on average 400% since the great oil/dollar hegemony deal. In 1971, you could buy a Toyota Corona for $2150 new.
the value of the dollar, as measured against the euro and the yen and a few other currnencies, has been flat since oil production peaked in 2004. the price of oil, since 9/11, has gone from $20 a barrel to a peak of $147 a barrel before the crash of 2008, and is now at $100 a barrel. since 2004, the dollar has been more or less flat when measured against the euro and the yen.
Let's take it back a few years there lead.and.lag. Note the STABILITY OF OIL PRICES at $20 a barrel right up until the Oil/Dollar Hegemony deal in 1971. What you refer to as a "big deal" since 2001 is simply manipulation of the markets so that the rich can get richer and the middle class can be eliminated. ALL of the volatility in this market has occurred since the oil/dollar hegemony began in 1971.
#21. To: abraxas (#19)
you got a story you can believe in... that's the important thing nothing else matters.
Top • Page Up • Full Thread • Page Down • Bottom/LatestThat oil is irrelevant because it cannot be used. Peak oil is only about one thing - the ongoing flow rate of oil into the economy. For all of the last century and up until about 2005 that flow rate grew steadily. But that flow rate pretty much came to a halt in about 2005 and for the last half decade could not grow. And as you would expect the global oil price started to rise. That's what happens when supply cannot keep up with demand.
#4. To: James Deffenbach (#3)
"Peak Oil" is a bs theory used by people with a vested interest to keep oil and gas prices high
#15. To: lead.and.lag (#4)
#16. To: abraxas (#15)
Rapid devaluation of the dollar
#17. To: lead.and.lag (#16)
does a BMW or toyota cost five times more now than it did in 2001?
#18. To: abraxas (#17)
(Edited)
#19. To: lead.and.lag (#18)
Replies to Comment # 19.
End Trace Mode for Comment # 19.