[muon]

I doubt $300 oil means "smoldering ruins" for the world economy. A paradigm shift certainly.

If this paradigm shift isn't going to look like smoldering ruins, what will it look like?

People talk about demand destruction, but this isn't making much sense right now to me. Demand destruction for one person means trading in their SUV and for another means no heating oil in a northern winter. The person who traded the SUV for a push bike might consider the world has undergone a paradigm shift, the person who died of hypothermia might use different terminology (if they weren't dead).

Looking from an economic standpoint, what kind of paradigm shifts occur if oil hits $300 a barrel in the next 3 years? 10% of drivers can't get to work? That's ok if they are the same 10% who are made unemployed and no longer need to drive to work, but what if they aren't? 20% of home owners waiting for repossession because their expenses have risen by 25% with their wages rising 6%, which leads to a stock market crash and banks either going under or bailed out by governments somehow?

This just sounds like what the Hirsch report says... if you have a 25 year plan, you can make the adjustments necessary, but if peak hits tomorrow (or yesterday), you're screwed. You can't do anything because the public wants relief now, they don't want you to spend 10 years building a nuclear power station that ends up not working because of a drought, they might think they want you to open up ANWR but they don't actually want to wait eight years for that oil to come online. The public wants lower oil prices, but what they ask for is tax relief so they can carry on using the same amount of oil they're using today when they should be asking for help on how to use less oil. If the public uses less oil you invoke Jevons paradox and more oil goes into something else in an unplanned market driven way so we spend trillions on white elephants while not addressing the actual problems. If the public gets clued up and pays off their debts and buys less 'things' then the banks and stock market break down and the public lose their jobs (which saves oil but doesn't put it to good use in mitigating peak oil) and those jobs that are lost might be in industries that are needed for the 25 year plan.

[VMarcHart]

Someone please double-check my math: If oil is at $136/bbl and gasoline is at $4, wouldn't $300/bbl yield $9-$10 gas?

Sure $10 gas is going to be a hardship to many, yours truly included, but world's economy in smoldering ruins?

Also, is the assumption we'll wake up Monday morning with $300/bbl or will it be a gradual increase over the next 12-24 months? The latter will give (a tiny little) time for people to prepare.

Thanks!

[yesplease]

VMarcHart, you can look at the posts of drifter and I to compare figures. Drifter also posted a very useful graph that could be used to extrapolate similar prices. And lastly, the EERE states that $138/bbl would result in $4.15/gallon gasoline, so 300/138=2.17 times $4.15 is a bit over $9/gallon average. Course, if gasoline prices disconnect from oil prices, as was seen via refinery problems a year or so ago, the price of a gallon of gas can increase past the price of oil.

As for how quickly we'll get there, I imagine an international "incident" could get it really high really fast if the ramblings of an Israeli official over military involvement in Iran can increase the price ~$10 in a day, or quite simply steep enough decline rates could push it to ~$300/bbl in a year. Otoh, we supposedly saw a peak in conventional liquids during 2005 and peak (technically as of now peak was Feb 2008) of all liquids in 2006, but here we are still at ~85mbpd w/ demand of the world's largest consumer looking like it'll behave as it did during the last time prices got this high this fast. Also, given projections as to crude pricing, it looks like EVs are going to be released in the countries currently paying ~$9-10/gallon since at those prices they are a slam dunk financially. Thus far companies have been guarded about introducing radically different products, instead increasing production of more efficient models in markets and recently closing down plants that produce the relatively inefficient models due to lack of sales even w/ huge discounts. While we won't completely switch over to more efficient uses/alternatives overnight, at the same time oil production won't cease overnight, at least not w/o something like a all out nuclear blitz. Not that it's (nukes) something I'd look forward to.

[dohboi]

We've seen prices double in the last year, and increase by 50% in three months this year, all with no major above-ground events driving the rise. We could see another doubling to about $300 this year even without new wars, hurricanes, or other calamities.

EVs won't be ready on any significant scale over night. The '07 models of the Zenn didn't even sell out. There is growing interest, but also a lot of resistance to buying a vehicle with significantly lower ranges and mph than people are used to.

But maybe everyone will wake up tomorrow and fully realize what an incredible hole we are in, stop digging (massively over consuming and over-procreating), and start climbing out.

Maybe.

[Serial_Worrier]

I refuse to accept the idea that gas will ever reach more then $5/gallon.

[VMarcHart]

I refuse to accept the idea that gas will ever reach more then $5/gallon.

I like your optmism. Let's hope you're right.

[dohboi]

You will see prices higher than $5/gallon within weeks, pretty much guaranteed. Start adjusting your life now to be ready for it, please. Your denial will not help you.

Gas is still very, very cheap. You will soon look back on $4 gas as the golden days, just as we already look back fondly on $3 gas, even though it was looked on with much horror only months ago.

Multi-dollar increases are already in the pipeline. It isn't a matter for speculation. It's just plain fact. Adjust as quickly as you can and get over denial as quickly as you can. You seem to feel stuck in a situation were you must have cheap oil to survive. We are all in that situation to one degree or another (even though some of the survivalists on the forum would deny it).

Best wishes on the downslope of Hubbert's Peak.

[medicvet]

okay, so what I want to know is HOW FAST is this projected to happen? Faster than we can drill new wells on the west and east coasts? Faster than we can put windmills and solar panels everywhere? Or faster than we can do is reasonably and still remain somewhat of a free country?

Or do we simply wake up one day and say hello to Mad Max?

[Ferretlover]

okay, so what I want to know is HOW FAST is this projected to happen? Faster than we can drill new wells on the west and east coasts? Faster than we can put windmills and solar panels everywhere?

Medicvet, at this point, nobody knows how fast this is going to proceed; logic dictates that it IS happening. Drilling new wells? That is like giving cough medicine to a lung cancer patient. You can suppress the coughing for a short time period, but the patient still is going to die of cancer. Elsewhere, on this website, you will find info on how long it takes to get a nuclear plant up and running; and, how much energy/oil it takes to make those windmills and solar panels (not to mention increasing scarcities as more people start to panic and try to acquire those items). There's also the unknown factors of depletion by other countries, especially China and India, just to name a few. And a lot of things could change in a hurry if Bush&Co succeeds in provoking Iran into war/nuclear war (ie: the proposed blockade).

Or faster than we can do is reasonably and still remain somewhat of a free country?

Free country? And, just where might that be? Again, elsewhere on PO.com, there are discussions and lists of liberties that have been have already been severely curtailed or have been set up (needing only the stroke of the presidential pen) for the removal of many liberties.

Or do we simply wake up one day and say hello to Mad Max?

No, I don't think we will wake up one morning and be in a Mad Max situation. I give it two to four years before restricted-everything is in place. It is a case of the slow-boiled frog.
You are in at the ground-floor, as the old saying goes. Either prepare for a vastly different world, in your lifetime, or become one of the "WTF is happening?!?" people who will be existing at the mercy and whim of TPTB (and the zombie hordes-had to include that! ) We are now at the stage of collecting information to fine tune our timeline of this event.
Variables that make it difficult to accurately predict the timeline with any high degree of accuracy at this time include climate change, possible nuclear war, the reactions of people & countries to the situation, and unknown remaining reserves of all resources.
Good luck to all of us..........
Edited to add: As PrairieMule stated elsewhere: "We have gone beyond Failsafe."

[yesplease]

EVs won't be ready on any significant scale over night. The '07 models of the Zenn didn't even sell out. There is growing interest, but also a lot of resistance to buying a vehicle with significantly lower ranges and mph than people are used to.

They won't need to be, at least from an economic perspective. Lets say oil reached ~$200/bbl and stayed there, then an EV might make financial sense, but if everyone suddenly jumps over to them assuming they were ready on a significant scale, then the price of oil would fall through the floor. What's happening is that EVs will be introduced gradually depending on local policies and secure a market share proportional to consistent fuel prices, which depend on oil prices and taxation. That's why Mitsubishi is bringing their EV to the UK, but not America. ~$10/gallon makes for a pretty wide margin of error even if oil prices drop.

[dohboi]

"EVs will be introduced gradually"

Right, that's what I just said. Somehow you seem to find that comforting. Do you think oil depletion is going to happen at a nice, stready, gradual pace? It may, but the people in the field are saying that every trick in the book has already been used to lengthen the plateau, so now when it crashes, its going to crash fast and hard.

Maybe it won't, but so far things have been developing faster than many on this forum thought they would. And this is about the doomiest crowd in town.

[Serial_Worrier]

"EVs will be introduced gradually"

Right, that's what I just said. Somehow you seem to find that comforting. Do you think oil depletion is going to happen at a nice, stready, gradual pace? It may, but the people in the field are saying that every trick in the book has already been used to lengthen the plateau, so now when it crashes, its going to crash fast and hard.

Maybe it won't, but so far things have been developing faster than many on this forum thought they would. And this is about the doomiest crowd in town.

Yup, it will go from 85 bbd to 50 bbd in 24 hours.

[dohboi]

hmmmm. Did I say that? No, I didn't think so.

As I said, we can't know for sure, but many of the smartest posters here and over at TOD--posters who have been mostly right about longer term trends even when all of the very well paid pundits have been consistently 180 degrees wrong ( not newbies who seem to be able to rarely come out with anything better than snipes and innanities)--are seeing declines in the double digit percentages starting soon. Going from 85 to 55 bbd over two to three years after a long, fairly steady rise over the last century will feel pretty much like it was over night.

Maybe it won't happen that fast. Or maybe industry will suddenly and rapidly retool and consumers will rapidly readjust expectations.

In the interest of full disclosure, I should say that I do have an EV. Do you folks? If not, why haven't you put your money where your happy talking mouths are?

[Revi]

hmmmm. Did I say that? No, I didn't think so.

As I said, we can't know for sure, but many of the smartest posters here and over at TOD--posters who have been mostly right about longer term trends even when all of the very well paid pundits have been consistently 180 degrees wrong ( not newbies who seem to be able to rarely come out with anything better than snipes and innanities)--are seeing declines in the double digit percentages starting soon. Going from 85 to 55 bbd over two to three years after a long, fairly steady rise over the last century will feel pretty much like it was over night.

Maybe it won't happen that fast. Or maybe industry will suddenly and rapidly retool and consumers will rapidly readjust expectations.

In the interest of full disclosure, I should say that I do have an EV. Do you folks? If not, why haven't you put your money where your happy talking mouths are?

We're getting one of these:

www.sunnev.com

I think that things are always later than you think. The time to dump the SUV was a year ago. Now they won't even take them as trades. I talked to a friend in NJ who told me that all the car dealers rejected a 2 year old Toyota SUV as a trade.

I would say that those 2007 Zenn's that didn't sell are the thing to get now. Grab one before everyone else realizes what's going on. This peak oil thing is like a window into the future. Even if the Zenn doesn't work for your lifestyle just yet, wait a couple of years. It will.

I think we'll be getting around our communities in smaller cars, and riding the bus to get to more distant places. I see this happening really soon.

The other thing to do is to get to know the bus schedule.

It's later than you think.

[yull]

If Israel carries out its Iran plans then $300 could be next week...

[VMarcHart]

So what I want to know is HOW FAST is this projected to happen? Faster than we can drill new wells on the west and east coasts? Faster than we can put windmills and solar panels everywhere?

Yes, way faster. It takes 3 years to install a wind turbine generator. I do that for a living.

...remain somewhat of a free country?

It will be free, alright, just not the way we're used to.

Or do we simply wake up one day and say hello to Mad Max?

It won't be overnight, but gradually over the next 5-10 years.

[yesplease]

So what I want to know is HOW FAST is this projected to happen? Faster than we can drill new wells on the west and east coasts? Faster than we can put windmills and solar panels everywhere?

Yes, way faster. It takes 3 years to install a wind turbine generator. I do that for a living.

Do you mean construct/fabricate/transport/install, or just install like you said?

[TheDoctor]

I'm not so sure there is any magical price at which the world economy is in ruins. A fast rate of increase is what will likely get us, and keep in mind the devaluation of the dollar.

Ex: If the US dollar were to loose over 50% of its value in a month, oil would be near $300, the US economy would look like the 70's, but for the rest of the world oil would be no more expensive than today.

If their is a true sudden shortage or panic (say due to Iran war, attack on Saudi facilities, etc.), oil could triple or worse overnight against all currencies. The third world is then completely priced out. Most auto manufacturers and airlines are toast within months. Suburbia real estate collapses. Banks and hedge funds collapse. Global depression is a real possiblity - which would fairly quickly decrease demand and bring back balance to supply/demand. Even once oil prices declined back to 'reasonable' levels in the 1XX's, demand would not pick up for years due to the global financial devastation - 30-40% unemployed would not be buying much gasoline or heating oil.

However, if oil 'slowly' rises to $300 over say the next five years, the financial impact will be less as it will allow time for global finance, individuals and the governments of the world to react. They will keep the system going for yet a few more years. (who among us can honestly say that 5 years ago they would have believed we could have $140 oil in 2008 and still have relatively low unemployment and, at least on the surface, a fairly healthy global economy). A slow rise in oil prices is thus actually far worse for humans in the long run - people/socitieis won't change their behaviors fast enough to avoid an eventual total catastrophe (in say circa 2020-2030). The old slowly boiling frog analogy. Pray for a true oil price shock if you want humanity to survive; pray for a slow rise if you want to stay employed and enjoy the "good life" for a few more years but at the price of billions dying of starvation in the decades ahead.....

[Revi]

I'll pick the slow rise in prices. I don't want to be around for all the misery.

$300/barrel could be just a few years away in any case.

Heating oil at $5 a gallon is a nightmare already. How is anyone going to pay more than twice that?

The average house uses around 800 gallons around here. That would be over $8000 just to heat the house.

Fuggedaboudit!

[Dan1195]

One thing that is not mentioned often is the fact that for the last 18 months we have basically been draining worldwide oil stockpiles. This can only continue for so long. At some point stockpiles get drained and MOL's begin to be breached. This will basically be the start of the next stage to the Peak Oil saga, where countries that have SPR's like the U.S. start to release that oil while beginning to institute rationing of some form. I would also expect a rapid rise the price of oil at this time as a supply shock occurs as a result of the loss of the stockpile "cushion".

The answer as to how long until this occurs, of course, no one really knows. I cannot imagine barring a major economical collapse in a short time scale that worldwide demand could drop enough to prevent this from happening.

This is what will be the death knell to the economy, as fuel limitations combined with rapidly rising prices disrupt the normal flow of business.