Re: Will gas be over $20 a gallon by Christmas?

In <431496f4$0$69115$892e7fe2@xxxxxxxxxxxxxxxxxxxxxxxxxxxxx>, Ted B. wrote:
>> Obviously oil will eventually run out, and nobody is saying that it
>> won't. You seem to be stuck on that one thing. But you seem to
>> believe we'll go from pumping 18 million barrels a day or whatever it
>> is, to drops overnight.
>>
>> That's not how it will work. Oil wells will dry up, gradually, in
>> which time it will be worthy for investors and companies to develop new
>> and better technology which will edge into the market, and consumers
>> will evetually, without any cohersion, move to different sources for
>> their power. The free market works, and it will work for this too.
>
>The problem is that the free market is going to work too slowly. When oil
>production drops (permanently) by 10% or more, that will cause worldwide
>economic disaster. It will be the same as if the oil dried up overnight.
>The results will be EXACTLY the same. We need shitloads of money to build
>infrastructure that is non oil-dependent. In the middle of a world-wide
>economic crisis, where is that money going to come from?
>
>Free market forces can help turn a viable economy. Free market forces
>cannot save an economy that has already collapsed. Having trouble
>visualizing this? Then consider the following . . .
>
>Oil production drops 10% (in roughly 2013). At that point, there is near
>100% unemployment (not just in the U.S.).

I only see a 10% drop in oil production causing something no worse than
WWII or the Great Depression.

> Somebody THEN comes up with the brilliant plan to mass-produce hydrogen
>powered vehicles (of all types, commercial, agricultural, and personal)
>to restart the economy. Now who is going to finance this plan? Would-be
>Investors are broke, as they lost everything in the recent stock market
>crash.

Not with the total US stock market having a value about 80% of the
peak of around 2000. Down a mere 5-6% counting dividends and reinvesting
them - source: Prospectus for Vanguard's "Total Stock Market Index" fund.

>Potential customers are unemployed (leading any would-be investors to be
>very wary, in addition to being very broke).

75-80% were employed during the Great Depression.

>In short, when the oil production starts slowing down (as it WILL), it is
>too late to try to implement a plan "B". Market forces alone will not solve
>the problem of the impending oil crisis. If gas prices were to slowly rise,
>market forces might help spur competing non-oil-dependent solutions. But we
>aren't going to see a SLOW rise in oil prices when production starts falling
>off. I wouldn't be surprised at all to see crude oil at $7000 per barrel
>before 2014, though it might still be trading below $100 per barrel in
>13. -Dave

People will cut demand by something like 99% and make do with
alternatives and scround oil out of the oil shale, woodwork, etc. to keep
prices from jumping to $7,000 per barrel.

- Don Klipstein (don@xxxxxxxxx)
.

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