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TheDude
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Joined: Apr 06, 2006
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Location: 3 miles NW of Champoeg, Republic of Cascadia
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 Posted: Fri May 30, 2008 9:57 am Post subject: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| Quote: | How big is the problem? Multiplying production (barrels per year) times the oil price (dollars per barrel) gives a total cost in dollars per year. It's an enormous number; tens of trillions of dollars per year. To put a scale on it, the three thin curves on the graph show the oil cost in contrast to the total world domestic product; the annual value the goods and services added up for all the world's countries. The three curves show the oil cost at one percent, two and a half percent, and five percent of the total world economic output. At $130 this morning, we are at six and a half percent.
Oil production obviously cannot consume 100 percent of the world's income. My intuitive, uninformed guess is that it cannot go above 15 percent. If we see oil at $300 per barrel, we will be looking out over the smoldering ruins of the world's economy. |
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Cogito, ergo non satis bibivi
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Cashmere
Light Sweet Crude
Joined: Mar 27, 2008
Posts: 1971
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| Posted: Fri May 30, 2008 12:00 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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I don't understand the graph.
Can you link to the original?
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Massive Human Dieoff must occur as a result of Peak Oil. Many more than half will die. It will occur everywhere, including where you live. If you fail to recognize this, then your odds of living move toward the "going to die" group. |
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MD
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Joined: May 02, 2005
Posts: 3426
Location: Oh really?
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| Posted: Fri May 30, 2008 12:17 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| Cashmere wrote: | I don't understand the graph.
Can you link to the original? |
Each point represents the price and production level at a given time. Each points position can then be compared to the curved lines to show what percentage of total economic activity is related to oil sales at that given point in time.
I'm more interested in seeing how production has hit a wall despite price.
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"It's not demand; It's not supply.
It's coming up with credit to buy"
10-Oct-2008
Schultz: I see NOTHING! I know NOTHING!
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RdSnt
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Joined: Feb 02, 2005
Posts: 1251
Location: Canada
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| Posted: Fri May 30, 2008 12:29 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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It's a very useful graph. The 3 curves represent a specific percentage of global GDP. The cost of oil is then measured against GDP. So at the moment oil cost represents 6.5 percentage of GDP.
What isn't mentioned is that this graph provides an unambiguous proof of peak oil.
Price of oil is moderated by increases in supply. Normally as prices go up supply goes up.
Now think of the point at which production can no longer increase as a wall. Price meets that wall and has two directions it can go in. If we abandon oil then the price can go down, but if oil is essential (which it is) then the price can only go up.
Now, one more step, consider that the wall moves. In the case of the graph, to the left which represents a decline in supply.
Even though there will be some demand destruction due to high prices, since supply is going to decline the wall move to compensate for the drop in supply. Thus, prices will continue to rise.
Plus there is a limit to demand destruction because the majority of the fuel is consumed in essential services.
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Gravity is not a force, it is a boundary layer.
Everything is coincident.
Love: the state of suspended anticipation.
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TheDude
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Joined: Apr 06, 2006
Posts: 3401
Location: 3 miles NW of Champoeg, Republic of Cascadia
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| Posted: Fri May 30, 2008 1:38 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| Cashmere wrote: | I don't understand the graph.
Can you link to the original? |
Hubbert's Peak, Current Events
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Cogito, ergo non satis bibivi
Could you slide your shorts down please? |
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arretium
Heavy Crude
Joined: Apr 04, 2005
Posts: 473
Location: Seattle, WA
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| Posted: Fri May 30, 2008 2:21 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| RdSnt wrote: | It's a very useful graph. The 3 curves represent a specific percentage of global GDP. The cost of oil is then measured against GDP. So at the moment oil cost represents 6.5 percentage of GDP.
What isn't mentioned is that this graph provides an unambiguous proof of peak oil.
Price of oil is moderated by increases in supply. Normally as prices go up supply goes up.
Now think of the point at which production can no longer increase as a wall. Price meets that wall and has two directions it can go in. If we abandon oil then the price can go down, but if oil is essential (which it is) then the price can only go up.
Now, one more step, consider that the wall moves. In the case of the graph, to the left which represents a decline in supply.
Even though there will be some demand destruction due to high prices, since supply is going to decline the wall moves to compensate for the drop in supply. Thus, prices will continue to rise.
Plus there is a limit to demand destruction because the majority of the fuel is consumed in essential services. |
Can you link to the graph and article please? |
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MD
Community Manager
Joined: May 02, 2005
Posts: 3426
Location: Oh really?
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| Posted: Fri May 30, 2008 2:31 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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This chart tells the story. You all need to reflect on its implications.
_________________
"It's not demand; It's not supply.
It's coming up with credit to buy"
10-Oct-2008
Schultz: I see NOTHING! I know NOTHING!
md@peakoil.com |
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MD
Community Manager
Joined: May 02, 2005
Posts: 3426
Location: Oh really?
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| Posted: Fri May 30, 2008 2:59 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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This one is stickied. Great catch Dude and much thanks Ken Deffeyes.
ERoEI right in in your face people. Wake up. The horizon, she's receding very fast now.
_________________
"It's not demand; It's not supply.
It's coming up with credit to buy"
10-Oct-2008
Schultz: I see NOTHING! I know NOTHING!
md@peakoil.com |
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essex
Heavy Crude
Joined: Jul 12, 2004
Posts: 171
Location: New Zealand
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| Posted: Fri May 30, 2008 3:37 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| Thanks for the graph ! |
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syrac818
Heavy Crude
Joined: Jun 01, 2005
Posts: 113
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| Posted: Fri May 30, 2008 5:04 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| MD wrote: | This one is stickied. Great catch Dude and much thanks Ken Deffeyes.
ERoEI right in in your face people. Wake up. The horizon, she's receding very fast now. |
LOL.... why is it necessary to constantly put some bitchy, elitist line into these posts. "Wake up people!", "The end is nigh people!", "You're just rearranging deck chairs on the titanic sheeple!"...
Oh man, please shut the f*ck up with that. So, so tired. We get it, that's why we're on this site. Thanks. |
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MD
Community Manager
Joined: May 02, 2005
Posts: 3426
Location: Oh really?
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| Posted: Fri May 30, 2008 5:07 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| syrac818 wrote: | | MD wrote: | This one is stickied. Great catch Dude and much thanks Ken Deffeyes.
ERoEI right in in your face people. Wake up. The horizon, she's receding very fast now. |
LOL.... why is it necessary to constantly put some bitchy, elitist line into these posts. "Wake up people!", "The end is nigh people!", "You're just rearranging deck chairs on the titanic sheeple!"...
Oh man, please shut the f*ck up with that. So, so tired. We get it, that's why we're on this site. Thanks. |
I am glad you are awake and aware. Last i checked there were significant portions of the population that aren't up to speed yet.
Elitist line? hmm...might want to look at the fingers pointing back your way, friend.
Sorry for your bad day!
_________________
"It's not demand; It's not supply.
It's coming up with credit to buy"
10-Oct-2008
Schultz: I see NOTHING! I know NOTHING!
md@peakoil.com |
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TheDude
Expert
Joined: Apr 06, 2006
Posts: 3401
Location: 3 miles NW of Champoeg, Republic of Cascadia
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| Posted: Fri May 30, 2008 9:16 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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Oh...that graph!
Makes me think of those movies where you see a submarine starting to capsize.
"One ping only!"
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Cogito, ergo non satis bibivi
Could you slide your shorts down please? |
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cube
Fusion
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Joined: Mar 12, 2005
Posts: 3586
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| Posted: Fri May 30, 2008 10:35 pm Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| MD wrote: | ...
ERoEI right in in your face people. Wake up. The horizon, she's receding very fast now. |
remember folks if there's ever a disagreement between an engineer and an economist ---> the engineer always wins. *points to graph*  |
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TreebeardsUncle
Intermediate Crude
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Joined: Jun 15, 2006
Posts: 579
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| Posted: Sat May 31, 2008 12:36 am Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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| Saw an article in the SF Chronicle a few days ago that said over the past few (maybe 4 years),supply has come up maybe 1.5%, demand at least twice that much (somewhere around 3.6 to 3.9%), but price has come up at least 300% from $45 to $135/barrel. That means that the ratio of price increase to supply increase is on the order of 200 to 1. What does that tell you all? |
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wisconsin_cur
Moderator
Joined: May 10, 2007
Posts: 2996
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| Posted: Sat May 31, 2008 12:38 am Post subject: Re: Deffeyes: $300/bbl=world's economy in smoldering ruins |
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Every time I go there I get the current event from April titled "7 deadly sins". Is any one else having this problem?
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Nature is complete because it does not serve itself.
The sage places himself after and finds himself before,
Ignores his desire and finds himself content.
He is complete because he does not serve himself. -Lao Tze |
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