Breaking point $10/gal. gas minimum

GotWind · Coal Joined: Jun 20, 2005 Posts: 5

That is just my opinion. When I say breaking point I mean severe demand destruction, depression era unemployment etc. People will be FORCED to change.Ever since investigating PO I have sort of looked at things differently. I really see a lot of slack in the system.
Examples:
Look around at the cars on the highway- 85% during rush hour have one occupant- Slug lines could work everywhere and pop up almost immediately
How many airplanes are there in the sky on a daily basis? How many are needed?
People driving hundreds of miles for weekend getaways?
Homeowners & businesses firing up the AC & Heat very early in the hot & cold seasons
Minimal recycling even though plastic is made w/oil and recycled goods save energy.

THere is a lot to be done. We can all be thankful that at this point there has been a gradual run-up in energy prices and not a superspike.

Such · Posted: Tue Jun 21, 2005 8:59 am Post subject:

I consider that price is probably largely irrelevant.... people will find ways to compensate. it's physical shortage that marks the problem. now, granted that a physical shortage should push the price up as well, but a high price doesn't necessarily mean physical shortage.

fletch961 · Tar Sands Joined: Jun 05, 2005 Posts: 93

$10 gas implies oil price of around $320 a barrel. I think you get quite a bit of demand destruction before hand. The housing bubble will pop before $4 gal. gas/$100 barrel oil.

RonMN · Posted: Tue Jun 21, 2005 10:30 am Post subject:

I can't even imagine what the price of food would be if gas was $10 a gal.

GotWind · Coal Joined: Jun 20, 2005 Posts: 5

You are probably right about $10 being on the high side. I guess I just did some quick calculations that 3/4 of the passenger cars/trucks on the road today do not even need to be on the road and 2.50/gal hasn't changed a lot of habits unfortunately. Of course, well before you hit $10/gal US you have a whole lot more people not going to work/traveling/making senseless trips anyhow.

cube · Fusion Joined: Mar 12, 2005 Posts: 3822

turmoil · Posted: Tue Jun 21, 2005 3:31 pm Post subject:

for the fellow visual monkeys

pictures are great

Source

matt21811 · Heavy Crude Joined: May 21, 2005 Posts: 174

At $420 a barrel. I can grow Palm oil at $4000US per acre.
Many farmers will already happily grow crops at $600US per acre.
If oil hits only $100 a barrel, Brazil will tear down the Amazon and plant Oil Palms. A few years later they will become one of the richest contries in the world using nothing but farm labour and lucky geography.

Insanely high estimates for oil price estimates ignore market realities.
$100 a barrel is a realistic long term target.

I_Like_Plants · Posted: Tue Jun 21, 2005 5:07 pm Post subject:

Compared to the 70s, it's amazing, huge vehicles, all single-occupant. Some are fairly thrifty, some of those older Toyota vans get amazing mileage, I know, I had one, and my Saturn Vue gets very good mileage because it has the small engine in it. But it's amazing, our last real oil shock people changed over to driving much smaller cars than people drive now, they carpooled, cities/counties set up bus systems or rejuvenated the ones they had, etc.

We're not doing any of those things now, in fact while we stew and steam here on the net right now, the gas prices at the stations up the street here are 25 or 30 cents cheaper than they were a few months ago.

fletch961 · Tar Sands Joined: Jun 05, 2005 Posts: 93

cube
your forgetting the 50 cent or so in taxes plus all the production cost that go into making a barrel of oil into gas. You are are also making the assumption that a 42 gal. bar. of oil yield 42 gal of gas. It doesn't. If your formula was right $55 oil would equal $1.30 gas. It's closer to $2.20 here. The $320 was an appoximation. The rule of thumb I was using is that every $1 rise in oil equates to about a 3 cent rise in gas.

Jdelagado

jdmartin · Posted: Tue Jun 21, 2005 10:02 pm Post subject:

I think it will be bad much before 6 or 7 dollars a gallon, at least here in the US. Everyone says "well look, 2 dollar gas didn't change anyone's habits". Think about 3 or 4 dollar gas, though. People will be having heart attacks. At 4 dollar gas, a 20 gallon fillup costs 80 bucks. If that vehicle gets 20 miles to the gallon, you've got 400 miles of driving, which I think for most Americans these days equals about 1 1/2 weeks. That means you'll be spending 200 bucks a month just in gas. Now multiply that by 2 cars, since most people both man & woman work, and you're up to 350 bucks (assume car 2 doesn't drive quite as much).

Most of the lower middle class and all of the poorer class are already at the breaking point. There is no reasonable way they can absorb those energy costs. I see people in my field of work every day who can't even pay their water bills, which average 30 bucks a month. They're driving vehicles that look like they may self-implode any second. At that point they may not even be able to afford to go to work.

And the upper middle class will be hurting, too. Most of them are maxed out on credit cards and only appear to be doing well.

I think that if gas gets to 4 bucks a gallon you're going to see serious demand destruction in the US, because businesses will be folding up left and right. Only the basics will be affordable to most, meaning that more and more people will be walking the street with no jobs.

One thing I do know: regardless, it's gonna get ugly.
_________________
After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.

Tyler_JC · Posted: Tue Jun 21, 2005 10:06 pm Post subject:

The question we have to ask ourselves is, "will the extra slack created by an American recession be eaten up by China/India?"

If the answer to that question is yes, we are in serious trouble...

Not to suggest that PO was going to be a picnic without an Oil-Hungry China. Evil or Very Mad

_________________
"www.peakoil.com is the Myspace of the Apocalypse."

cube · Fusion Joined: Mar 12, 2005 Posts: 3822

jimmydean · Heavy Crude Joined: May 05, 2005 Posts: 226