I posted this earlier this week, but Roach in his editorial had this to say.





I commented before PO becomes a major issue, economics of high oil prices will put the hurt on many. ROACH

I agree about diminishing returns.

Not only appliances, homes and manufacturing (or the export thereof) but Agriculture and rail transport as well are much more efficient. I assume microprocessors have made a big difference.

So where the supply problems in the past led to economic growth as new energy saving products became popular or mandatory, the solutions to the supply problems of the future may mean the opposite since many of the affordable and easy fixes have already been made. The result may be simply spending more on energy at the expense of everything else.

And of course more and more of those energy dollars are going elsewhere instead of staying at home.

The argument that energy efficiency advances have already been made is true to a large degree, but it is being misapplied.

Those advancements in large part are not being utilized. Vehicles today are indeed far more efficient than the vehicles of the 1980s, and yet we get worse gas mileage than in the 1980s. The simple reason is that the efficiency advances have been used to make faster, heavier, more powerful vehicles.

Case in point, I was looking at corvettes recently. The base covettes from the late 80s made about 245hp and got 17-24 mpg. In 1992, the base LT1 got 300hp and made 17-24mpg. In 1997 that went up to 345hp and 17-24mpg. That is a 40% increase in efficiency, with none of it being used for gas savings and all of it being used for speed.

The same thing has happened in all segments of the auto industry. Today, a taurus with a 200hp engine will get 20-30mpg. In 1990 that would have been great for a full sized family car. However, that advance has been nullified by the many SUVs and large trucks that get 14-18mpg.

And to state the obvious - demand destruction can and will happen and it will not matter what people want. Bankrupt and unemployed people do not drive SUVs. People with bad credit and no solid income do not go around buying TVs, iPods, and computes. All the energy that is currently being spend on making and transporting those items will drop off. The amount that energy can drop off is going to be directly related to the amount we spend on non essential items like that, and right now it can drop off one hell of a lot. I can easily envision a 25 or 30% decline in fuel use in 2 or 3 years if the economy really tanks hard.

That is what people are so worried about it. Peak oil. When TSHTF. That kind of economic chaos is going to result in a lot of social unrest.

$66 last i checked...

Natural gas is just zooming! UP!

What happened? The blackout in Iraq?

The stock market was rallying, and oil was holding steady. Then all of a sudden, oil's going up and the stock market's in negative territory.

I am really worried about natural gas this winter. More than oil, I think natural gas will be a problem.

I dunno about the blackout but this site was down this AM and so was the New York Times article at around 9:00 AM EST.

Sorry to hear that you will freeze to death in 2006 winter.
May you have enough $$ for gas this year.

Maybe you can send the warm tropical air from Borneo over here in Minneapolis!

I wish to do that Mr. lotrfan55345. As you already knew the temperature here is as hot as in Manila except it is 33 Celcius every single day. Many girls wears hot pants here, man.. It is really HOT here.

However, the Islam conservatives here asked every XX to cover up or received punishment. They have to cover from head to toe. This is the Pandora box I am talking about.... Because Malaysia is a multi-racial multi-religion nation. They talked about Heaven and hell for so called body advertisement. Rape of hot pant girls not considered as sin.

Hot pant is practical post peak and the butts look good too. Yeh, the only peak oil advantage that I can think of... Come on , peak oil. With less air -con , Wow. I cannot wait...

Yes I heard it to be case in strict muslim countries that if a women shows an inch of flesh even accidentally then its like a green light to the men that it is ok to rape her.

Because even though Islam states that women are weak and inferior and need to be guarded and controlled by men for their own sakes, it is accepted that islamic men should lose all self-contol presented with even an inch of woman bare skin.

The women is then kicked out by her family in disgrace and probably falls to prostitution on the way side.

Oil is up again already this morning. 65.85 and nat gas is already @ 9.93..up a quarter ...ouch

Oil prices are now taking a beating (-$0.90), any clues?

Nobody really knows what to do at the moment in oil.

There are worrys about supply disruptions in venezuala and iraq that drive the prices up but then they look like nothing to worry about and it crashes back down.

There is also the supply report coming tommorrow that is really hard to predict.

We're in that no mans land of not knowing.