Exploring Hydrocarbon Depletion
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jaws wrote:The important thing is that oil demand is only inelastic within a short timeframe. Over the long-run it becomes more elastic. That's true for any point in time. If the oil supply were to suddenly fall by half, the price would still shoot up catastrophically. But if the oil supply we to fall by half over 20 years, we would see much more elasticity.
untothislast wrote:One of the great things about these forums, is that if you approach other people's submissions with an open mind, you can learn a lot.
The one thing which troubles me, is that we're applying our main focus to the energy capacity derived from oil, when it's also important to consider that most of our material goods rely on derivatives - such as plastics.
I can well imagine a world learning to cope with less energy - or indeed developing new or alternative means of producing it - but unless we're considering going back to manufacturing everything out of wood and stone, what do we do when scarcity renders the price of our material goods prohibitive?
MrBill wrote:I am not a chemist. Introductory Organic Chemistry was the hardest two years of my life! However, I believe there are many organic feedstocks for plastics that are non-petroleum based such as carbon (C), hydrogen (H), nitrogen (N), chlorine (Cl) and sulfur (S)]
MrBill wrote: And, what about sources of organic plastic like corn starch? Are they price competitive or do they produce inferior quality plastic (i.e. limited uses)?
If it was possible to refight WWII without socialism, and the results turned out worse, maybe you would have a point. On their own price controls create more problems than they solve. The last time they were tried, the 1970's, it created a gas crisis. When they were lifted the gas crisis went away.donshan wrote:Only if you use price to control consumption. During World War II the supply of gasoline available to the Civilian economy probably dropped by more than half. The price did not rise, because laws were passed to ration fuel to essential needs, and the price was fixed. This controlled economy not only worked, it soared to production levels that won World War II.
Applying that idea to coming fuel shortages, it "is possible" for example to give diesel trucks hauling food to the city priority on diesel fuel at acceptable prices to control food costs, while trucks hauling the non-essentials pay market prices.
Don't get me wrong. I believe in free markets. I was just pointing out that there are other ways to control consumption other than just price, such as tax policy and rationing. Price controls alone will increase demand (effectively lowers the price) and make a shortage worse as it did in the 1970s.
The WWII model also had enforced demand destruction-rationing, that was not done in the 1970s. Under a rationing plan, it forces people to park their car and ride public transport, use a bike or walk. That produces demand destruction. Even a liberal gas rationing program (pick any number you want) such as 100 gal a month scheduled to decline each year would cause slowing of gasoline use by changing both buying and driving behavior. It would also affect our shopping and business strategies, on how to keep sales up with people driving less, instead of today's business model based on growth every year. A controlled reduction in gas demand could keep a dropping supply in balance with demand and make price controls unnecessary. A system that rations gas by price, say gas is $25/gal and only the rich can drive, is a formula for riots, just like VIPs going to the head of waiting line is resented.
BTW I was there for BOTH the WWII gas rationing AND the 1970s gas lines. No fun either time. During WWII the typical family got by on about 3 gallons a week. Gas ration coupons were saved up and trips very carefully planned. There were plenty of buses available. always full, so that one could totally avoid driving a lot of the time. People were no different, the day rationing stopped, it was Party time.
Personally, I like a little Socialism in public transport systems.
The privatised free-market model, as imposed in my part of the UK, has been a disaster. We used to have a fully integrated network of buses, ferries and trains - all running to a timetable with clockwork precision. My first job, in 1980, was viable only because I could cross a peninsula by bus, catch a train, then travel on another bus to my workplace - all with full confidence that each of my connections would be there on time. In over eighteen months in the post - and over a cumulative journey of 20 miles - I think I was only ever late once.
The new bus companies surveyed the travellers on a daily basis, establishing at which times of day the buses were relatively highly patronised, or when they ran near empty. Within a few months, half the services had been withdrawn, and to some rural destinations there were no services at all after 7pm. The highly prized, and incredibly ingenious timetabling system, went completely out of the window. A transport network run on the undersatnding that it primarily be utilised as a public service, became just another means by which venture capitalists could squeeze some money out of the local citizenry. By the way, the much touted claim that 'competition will keep prices competitive and low' - has been complete crap.
The happy results? Under usage of buses and trains, which run well under possible capacity. Increased congestion, as travellers flock to buy cars instead (people no longer even sharing journeys with their own family members - it's strictly one person per car). Boomtime for people constructing car parks and new roads - and unnecessary depletion of a much-prized resource. Which is the reason why we're all here in the first place.
Entrepreneurs can be wonderful, in their place, but not necessarily as providers of public transport networks.
MrBill wrote:So the passenger could take the bus, train or ferry anytime as before, but now there was no public subsidy.
Doly wrote:MrBill wrote:So the passenger could take the bus, train or ferry anytime as before, but now there was no public subsidy.
I'm not sure that trains are not subsidized now. Can anybody clear this one up?
But how many Londoners would be willing to pay more for trains that were only full to capacity in rush hours, instead of having half the people standing? I think a significant amount would be happy to pay double. Unfortunately, such a service does not exist. And I think it doesn't exist because of physical constraints of the rails. There are only so many rails and so many trains that can run through them at a given time. Another proof that when free market fights against physics, physics always wins.
untothislast wrote:The new bus companies surveyed the travellers on a daily basis, establishing at which times of day the buses were relatively highly patronised, or when they ran near empty. Within a few months, half the services had been withdrawn, and to some rural destinations there were no services at all after 7pm. The highly prized, and incredibly ingenious timetabling system, went completely out of the window. A transport network run on the undersatnding that it primarily be utilised as a public service, became just another means by which venture capitalists could squeeze some money out of the local citizenry. By the way, the much touted claim that 'competition will keep prices competitive and low' - has been complete crap.
aahala wrote:Rationing by allotment rather than price only is superior in the very short
run to control consumption of the underlining product. Black markets soon
Rationing by allotment of one thing to control consumption of another can
work for extended periods. The WWII example is the classic example.
Gas rationing had almost nothing to do with gasoline, but rather rubber,
which was necessary for the war effort and in short supply.
People who didn't need all their gas allotment could transfer the gas
to another illegally, but what they couldn't transfer, unless they gave
up driving entirely were their tires.
This all makes it difficult to predict what would happen if we reform the public transit. I think if more people would use the public transit, the public transit system would be able to improve a lot. If the public transit system would improve a lot, a lot more people would be willing to use them. (A chicken and egg problem). I'm hoping the state will start such a project, I doubt the privatized public transit companies are willing to make such an investment (in time).
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