Comments on: Commentary: Oil, Economics, and Politics–a tangled web of consequences http://www.aspousa.org/index.php/2009/12/commentary-oil-economics-and-politics-a-tangled-web-of-consequences/ Truth in Energy Thu, 09 Feb 2012 04:43:13 +0000 http://wordpress.org/?v=2.6.2 By: Peter S. Hunt http://www.aspousa.org/index.php/2009/12/commentary-oil-economics-and-politics-a-tangled-web-of-consequences/#comment-3736 Peter S. Hunt Mon, 28 Dec 2009 17:17:51 +0000 http://www.aspousa.org/?p=3111#comment-3736 What deeply disturbes me is the absence on any unsubsidized exports. In a world economy one as an advanced nation can not long survive without them. Other than a few plastic wrapped apples, for high end Japanese consumers, we have few if any exports that can stand on their own two feet. We have been living on borrowed money and that will soon end. China is dumping the dollar with long range U.S. dollar fixed price contracts for raw materials. Thus, they are shifting the dollars decline risk to other nations and avoiding the open and self destructive sale of our bonds. Our labor and fixed obligations must be revised for us to remain competitive. It will be a tumoultous transition. No happy thought here I regret to say. What deeply disturbes me is the absence on any unsubsidized exports. In a world economy one as an advanced nation can not long survive without them. Other than a few plastic wrapped apples, for high end Japanese consumers, we have few if any exports that can stand on their own two feet.

We have been living on borrowed money and that will soon end. China is dumping the dollar with long range U.S. dollar fixed price contracts for raw materials. Thus, they are shifting the dollars decline risk to other nations and avoiding the open and self destructive sale of our bonds.

Our labor and fixed obligations must be revised for us to remain competitive. It will be a tumoultous transition.

No happy thought here I regret to say.

]]> By: Glenn http://www.aspousa.org/index.php/2009/12/commentary-oil-economics-and-politics-a-tangled-web-of-consequences/#comment-3729 Glenn Thu, 24 Dec 2009 18:56:01 +0000 http://www.aspousa.org/?p=3111#comment-3729 It's no surprise to thinkers that oil will run out (IBM ads not withstanding); what is surprising is how few realize that humanity is running out of everything. Also what surprises, with all the talk about the "economy" and the "environment", is that very few have made the connection between the two. Not yet ready to suggest that they are one and the same, but without a resource laden environment, there is no economy (could Dubai be a pointed reminder of this?). Mines (oil, gas, iron, copper, etc) are inevitably depleting, forests and waterways are being overdrawn/over harvested, populations keep increasing, while our humanity expects ever increasing growth and higher standards of living. Although the time frame is illusive, the inevitable outcome isn't difficult to predict. The biggest weakness of humanity appears to be its inability to develop and stay with long term plans, a particular problem in democracies which continually change leadership. It is exacerbated by selfish individual interests (corporate globalization, financial institutions and big oil come to mind). Does Copenhagen come to mind? In human history, small empires developed and flourished, only to disappear when resources were outstripped by unsustainable population growth or climate change. Europe and to some extent Asia, solved the population problem by colonizing the Americas, Africa and Australia (displacing the indigenous populations). This provided relief from crowding (and new rich, resources). Are we running out of options? It’s no surprise to thinkers that oil will run out (IBM ads not withstanding); what is surprising is how few realize that humanity is running out of everything.

Also what surprises, with all the talk about the “economy” and the “environment”, is that very few have made the connection between the two. Not yet ready to suggest that they are one and the same, but without a resource laden environment, there is no economy (could Dubai be a pointed reminder of this?).

Mines (oil, gas, iron, copper, etc) are inevitably depleting, forests and waterways are being overdrawn/over harvested, populations keep increasing, while our humanity expects ever increasing growth and higher standards of living. Although the time frame is illusive, the inevitable outcome isn’t difficult to predict.

The biggest weakness of humanity appears to be its inability to develop and stay with long term plans, a particular problem in democracies which continually change leadership. It is exacerbated by selfish individual interests (corporate globalization, financial institutions and big oil come to mind). Does Copenhagen come to mind?

In human history, small empires developed and flourished, only to disappear when resources were outstripped by unsustainable population growth or climate change. Europe and to some extent Asia, solved the population problem by colonizing the Americas, Africa and Australia (displacing the indigenous populations). This provided relief from crowding (and new rich, resources).

Are we running out of options?

]]> By: captain Rick http://www.aspousa.org/index.php/2009/12/commentary-oil-economics-and-politics-a-tangled-web-of-consequences/#comment-3723 captain Rick Wed, 23 Dec 2009 12:34:46 +0000 http://www.aspousa.org/?p=3111#comment-3723 what is really behind the national Park oil reserve to not tap that oil in Ecuador? For exchange in compensation?$350 million????????? Why would any country keep oil in the ground to prevent release of carbon, when the world is hungry for it? Suspicious..... what is really behind the national Park oil reserve to not tap that oil in Ecuador? For exchange in compensation?$350 million?????????
Why would any country keep oil in the ground to prevent release of carbon, when the world is hungry for it? Suspicious…..

]]> By: Bill Simpson in Slidell http://www.aspousa.org/index.php/2009/12/commentary-oil-economics-and-politics-a-tangled-web-of-consequences/#comment-3721 Bill Simpson in Slidell Wed, 23 Dec 2009 06:48:19 +0000 http://www.aspousa.org/?p=3111#comment-3721 WOW! I've read a lot of articles on the economy in my 100,919 Internet page visits over the last two years, but this might just be the best one. What will actually happen when world oil production begins to decline, probably sometime between 2015 and 2020, is anyone's guess, but it won't be fun. You can be absolutely certain of that. A staghyperflationary collapse is possible, although recent technological developments in drilling, offer the possibility to substitute some natural gas for oil, as a transportation fuel. People were already starting to do it in Utah, back in 2008, when gasoline hit $4 a gallon. When millions of people are desperate and organized, it is amazing what can quickly be done. Think what the Russians did during the first two years of WW II. Siberia isn't an easy place to work when the temperature is minus 30. But many factories were relocated there, and new ones built. Of course, you need political leaders who are willing to put the welfare of the many, ahead of that of the few politically well connected. With thousands of well funded Washington lobbyists handing out cash, along with the promise of future jobs, I won't hold my breath for that. If all that isn't bad enough, think what will happen after the peak, when each and every oil exporting country realizes that they can now jack up the oil price, just by cutting back on their exports. What incentive will they have to export today, when, if they wait a few months, the oil price will be even higher. Possibly a LOT higher. This will be a new oil market paradigm. I can't think of another market like it, but I'm certainly no economist. It will be kind of like owning the only copper mine on Earth. Want more money? Sell less copper. We can live without diamonds, but not without oil. At least, not yet. Should several exporters begin holding oil off the market in an effort to drive the price way up,(Wouldn't you, if you were in their place, and you knew that your main source of income was running out?) I see little chance of avoiding an economic collapse. If you have the means, you may want to have some food stockpiled before that day arrives. I'm sorry to be such a downer, but something needs to be done to plan for this, and soon. We can't simply rely on the development of some as yet undiscovered technology to save us. Finally, I wish all of my fellow peak oilers a Merry Christmas, or other holidays that you may be celebrating. And may you all have a prosperous 2010. WOW! I’ve read a lot of articles on the economy in my 100,919 Internet page visits over the last two years, but this might just be the best one.
What will actually happen when world oil production begins to decline, probably sometime between 2015 and 2020, is anyone’s guess, but it won’t be fun. You can be absolutely certain of that. A staghyperflationary collapse is possible, although recent technological developments in drilling, offer the possibility to substitute some natural gas for oil, as a transportation fuel. People were already starting to do it in Utah, back in 2008, when gasoline hit $4 a gallon. When millions of people are desperate and organized, it is amazing what can quickly be done. Think what the Russians did during the first two years of WW II. Siberia isn’t an easy place to work when the temperature is minus 30. But many factories were relocated there, and new ones built. Of course, you need political leaders who are willing to put the welfare of the many, ahead of that of the few politically well connected. With thousands of well funded Washington lobbyists handing out cash, along with the promise of future jobs, I won’t hold my breath for that.
If all that isn’t bad enough, think what will happen after the peak, when each and every oil exporting country realizes that they can now jack up the oil price, just by cutting back on their exports. What incentive will they have to export today, when, if they wait a few months, the oil price will be even higher. Possibly a LOT higher. This will be a new oil market paradigm. I can’t think of another market like it, but I’m certainly no economist. It will be kind of like owning the only copper mine on Earth. Want more money? Sell less copper. We can live without diamonds, but not without oil. At least, not yet.
Should several exporters begin holding oil off the market in an effort to drive the price way up,(Wouldn’t you, if you were in their place, and you knew that your main source of income was running out?) I see little chance of avoiding an economic collapse. If you have the means, you may want to have some food stockpiled before that day arrives.
I’m sorry to be such a downer, but something needs to be done to plan for this, and soon. We can’t simply rely on the development of some as yet undiscovered technology to save us.
Finally, I wish all of my fellow peak oilers a Merry Christmas, or other holidays that you may be celebrating. And may you all have a prosperous 2010.

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