Comments on: The Narrow Ledge of Oil Prices http://www.getreallist.com/the-narrow-ledge-of-oil-prices.html Deal With Reality or It Will Deal With You Fri, 19 Mar 2010 00:25:40 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: Half Empty http://www.getreallist.com/the-narrow-ledge-of-oil-prices.html/comment-page-1#comment-1616 Half Empty Tue, 27 Oct 2009 16:17:39 +0000 http://www.getreallist.com/?p=1373#comment-1616 This chimes with what I've come to believe, which is that the cheap energy age will slowly suffocate from oil at the equivalent of $90-$100, rather than be bludgeoned into submission by wild spikes of £300 or more. That's in 2009 dollars, of course. Lord knows what the nominal figures will actually be. All the levers that are thought to control the world economy - currency systems, capital flows, trade balances - operate on the assumption that "right priced" energy inputs will be there as and when necessary. That assumption is already being tested. Take away even a little of the massive cheap energy subsidy required by our 350-year-old system and the control gyros will first wobble then let go of big pieces of BAU. The destruction when these large, dead-but-still-deadly, chunks of the old order start flying around the room will be truly Schumpeterian! I work in the car leasing business. Recently I've noticed that big fleet customers are coming up to speed pretty quickly with peak oil. Strikingly, they quickly 'get' that a low carbon future isn't "today-lite" but a totally changed game. One or two talk in terms of a wispy green electric car fleet model but most expect that the mass market new car business - electric or otherwise - will be dead within a decade. They're already thinking hard about what parts of their businesses' current worldview will be revealed as 'fluff' by de-carbonisation. They clearly expect their organisations to shrink in line with the disappearance of cheap energy. A lot of people will be left a lot less well off than today by this process. I think their version of transportation 'cleantech' will, perforce, mean keeping their current car going for decades rather than years, Cuba style, using it only for special occasions and emergencies. This chimes with what I’ve come to believe, which is that the cheap energy age will slowly suffocate from oil at the equivalent of $90-$100, rather than be bludgeoned into submission by wild spikes of £300 or more. That’s in 2009 dollars, of course. Lord knows what the nominal figures will actually be.

All the levers that are thought to control the world economy – currency systems, capital flows, trade balances – operate on the assumption that “right priced” energy inputs will be there as and when necessary. That assumption is already being tested. Take away even a little of the massive cheap energy subsidy required by our 350-year-old system and the control gyros will first wobble then let go of big pieces of BAU. The destruction when these large, dead-but-still-deadly, chunks of the old order start flying around the room will be truly Schumpeterian!

I work in the car leasing business. Recently I’ve noticed that big fleet customers are coming up to speed pretty quickly with peak oil. Strikingly, they quickly ‘get’ that a low carbon future isn’t “today-lite” but a totally changed game. One or two talk in terms of a wispy green electric car fleet model but most expect that the mass market new car business – electric or otherwise – will be dead within a decade. They’re already thinking hard about what parts of their businesses’ current worldview will be revealed as ‘fluff’ by de-carbonisation. They clearly expect their organisations to shrink in line with the disappearance of cheap energy.

A lot of people will be left a lot less well off than today by this process. I think their version of transportation ‘cleantech’ will, perforce, mean keeping their current car going for decades rather than years, Cuba style, using it only for special occasions and emergencies.

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