I never could get my head around that the model said low prices would be what ended the oil age. But here we are, with all energy prices too low to spur new production because the end user can't pay a higher price at the margin.
Being a statement of the 2'nd Law, the Etp Model is a non linear energy function. Economics, on the other hand, is a linear estimation of a non linear process. Straight lines can go on forever, curves in the real world sometimes circle back to their zero bound where they started. Following a straight line can take you nowhere. The real world went the other direction! Economic models never told us how much oil could actually be extracted. They were a straight line to nowhere; which is exactly where we are now.
Oil powers an economy that creates goods and services which are represented by an abstraction called money. Creating an abstraction does not translate into goods and services. That only works in Fairy Tales. Money can never have more value than the actual amount of goods and services that exists. No matter how much is created only the amount of it that is being used determines prices. Only then does the Supply/Demand rule hold. Money sitting in a FED reserve account is not being used. We can see that in the velocity of money. The FED has been pumping money into the system for a decade, and yet there is no inflation? Most of what they create never enters the goods and services circulation system. That is determined by the strength of the economy, and the strength of the economy can be measured by the amount of energy that enters, and exits it. The Etp Model does that for petroleum; which is a reasonable proxy for the entire energy system.
Depletion is like a rotting 2X4 in the back yard. There becomes less and less of a 2X4 as time passes. Declining energy availability resulting from depletion translates into deflation. Petroleum is saying that availability is going down, and so is the price. That includes the price of petroleum. To keep the petroleum industry operating, which is essential, would require a huge decline in energy availability used from other sources, and a huge input into petroleum. To do that would require shutting down a large sector of the world's economy. Something like what is taking place right now.
The Theory is that we will have to kill the economy to save it; color me doubtful . According to the Model that will require an 18% decline in GDP and oil production to accomplish. GDP $69 trillion, oil - 82 mb/d. 27.2 quad BTU/ yr. With OPEC in disarray, and Putin seeing a golden opportunity to kick is primary source of aggravation, the US, right in the Butt, some of them are going to have to go broke; permanently.
It is time to replace oil before the Bubonic Plague really arrives. The first thing that we have to do is de-globalize. Flying lettuce in from South Africa is a waste of good energy that could be used to produce oil.