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Peak Oil: Net Exports Aren't Everything

Forbes -- I think everyone’s wallet should have convinced them by now that the days of cheap oil are over.

Compared to the end of cheap oil, “peak oil,” or the moment when worldwide production hits its peak, is irrelevant, at least from an economic standpoint. What we really care about is how much we’re paying for the oil that keeps our economy running.

As I demonstrated in my most popular article to date on Forbes, The End of Elastic Oil, the global market for oil has had a regime change in the last 10 years.

In the old regime, oil production was flexible, with plenty of spare capacity in places like Saudi Arabia, and supply easily adjusted to accommodate changes in demand. In the new regime, that is no longer the case. Today, oil supply shifts in response to demand only slowly, so demand has

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Submitted Apr 28, 2012 By: ccf_jeff

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Eliano Champion Author Baltimore Posts:1,412 Points:388,100 Joined:Jun 2011	Message Posted: Apr 30, 2012 2:01:36 PM Ignore Eliano Report Abuse well, well
ccf_jeff Champion Author St. Louis Posts:15,292 Points:2,565,550 Joined:Sep 2005	Message Posted: Apr 29, 2012 4:21:13 PM Ignore ccf_jeff Report Abuse Well said, orphancarguyPE. btw, thanks for the links on a couple of VW's diesel hybrid's in a post yesterday: VW’s Diesel-Electric Hybrid Coming to North America in 2013 VW Hybrid Diesel Cross Coupé Promises 157 MPG Cars like that ought to take out a lot of the sting of higher gas prices... depending upon how much they cost.
jeyrivera89 Rookie Author Boston Posts:40 Points:57,520 Joined:Nov 2011	Message Posted: Apr 29, 2012 12:48:23 PM Ignore jeyrivera89 Report Abuse /yawn
TomT2Lee Champion Author Cincinnati Posts:5,357 Points:1,597,980 Joined:Sep 2005	Message Posted: Apr 29, 2012 9:57:29 AM Ignore TomT2Lee Report Abuse Until people wake up and stop trying to apply old rules to the current situation, they will continue trying to live in a dream world, unable to grasp why things around them are coming apart. The longer people continue to live in their dream world, the more likely civilization will collapse.
CorvairHaven Champion Author Cleveland Posts:4,359 Points:1,454,915 Joined:Sep 2008	Message Posted: Apr 29, 2012 8:55:29 AM Ignore CorvairHaven Report Abuse "...the days of cheap oil are over" I don't think so. Wait until the economy totally collapses and see what happens. Just keep Obama in office and you'll see.
coughlin Champion Author San Jose Posts:5,190 Points:1,118,840 Joined:Sep 2009	Message Posted: Apr 29, 2012 8:55:13 AM Ignore coughlin Report Abuse Cheap oil (and gasoline) are gone forever.
Track79 All-Star Author Maine Posts:802 Points:601,140 Joined:Mar 2010	Message Posted: Apr 29, 2012 8:41:35 AM Ignore Track79 Report Abuse We have plenty of oil....and plenty of greedy people
dave27johnson Champion Author Chicago Posts:1,788 Points:409,345 Joined:Feb 2012	Message Posted: Apr 29, 2012 8:23:34 AM Ignore dave27johnson Report Abuse Keep pumping oil and the prices will go down.
Evilmaddog Champion Author British Columbia Posts:3,327 Points:958,525 Joined:Aug 2010	Message Posted: Apr 29, 2012 8:07:28 AM Ignore Evilmaddog Report Abuse speculation and manipulation of oil prices
orphancarguyPE Champion Author PEI Posts:3,853 Points:735,965 Joined:Jan 2011	Message Posted: Apr 29, 2012 7:55:40 AM Ignore orphancarguyPE Report Abuse Even Forbes is nailing it. Cheap conventional oil is over--well, it is sloooowly declining year after year. It won't be entirely over for decades yet, but as the cheap portion declines in output, we will notice the expensive portion more and more. No significant amounts of new oil have been found for decades--significant means replacing the oil used each year and at best we have been finding an average of 1/3 of what we use over the last 3 to 4 decades. Don't get fooled by reading headlines of billions of barrels in discoveries--it doesn't all come out at once, and the world uses over 3.2 billion barrels a year. The new oil coming on-stream be it deep ocean far offshore, tar sands, or tight oil, is all a LOT more expensive to produce, and won't get produced unless the price makes sense. "Sense" means that the minimum floor price now ranges from $40-50 a barrel, to way above $100, for an average of $70-100 a barrel just to produce. "Peak oil" as has been commonly misunderstood, is not just the top sustained peak of physical production; it actually refers (by the people who first used the phrase) to be more about the 'economic cost' of producing that additional oil once that peak/plateau is reached. The Peal Oil theorists don't mean that we will run out of oil--there is no doubt that there is lots of oil left--just that the increasing cost of additional units of production will rise enough over time as it becomes more costly to extract that total consumption will fall, not because it wants to, but because it becomes less and less affordable to use oil and other alternatives become considered. The 'alternatives considered' might be very harsh over several decades after 'peak': -suburbs (and the lots of unavoidable driving because of sprawl) become unsustainable. Goodbye suburbs, hello self-sustaining small towns and small (walkable) cities just like the old days. -flying once again becomes a rare event, or only for the very wealthy. -exotic fruits and vegetables once again become exotic, like oranges only at Christmas used to be. No more raspberries flown in from Chile in February.
mike1881 Champion Author Fayetteville Posts:1,300 Points:565,400 Joined:Feb 2011	Message Posted: Apr 29, 2012 7:07:18 AM Ignore mike1881 Report Abuse Speaking of regime, make sure to vote out the regime in November.
LEGION57 Champion Author South Carolina Posts:1,676 Points:283,110 Joined:Mar 2011	Message Posted: Apr 29, 2012 3:47:38 AM Ignore LEGION57 Report Abuse It's not over till I SAY it is over! Did we quit when the Germans bombed Pearl Harbor? NO!
kitty1750 Champion Author Kitchener-Waterloo Posts:2,199 Points:470,675 Joined:Jun 2011	Message Posted: Apr 29, 2012 3:25:36 AM Ignore kitty1750 Report Abuse Bring on the cheap oil!!! Hey.......apparently they're now making good grade oil out of recycled plastics.
wegman Champion Author Twin Cities Posts:7,813 Points:2,089,545 Joined:Jun 2001	Message Posted: Apr 29, 2012 3:09:55 AM Ignore wegman Report Abuse You see peak oil in the headline, you wonder if you have a rational actor debunking the concept OR a Malthusian trying to defend the debunked concept and you get something that doesn't even talk about peak oil. Huh?
CarolinaBlue150 Champion Author North Carolina Posts:1,430 Points:300,000 Joined:Aug 2011	Message Posted: Apr 29, 2012 2:21:26 AM Ignore CarolinaBlue150 Report Abuse November can't come soon enough.
TRYWI All-Star Author Appleton Posts:898 Points:282,150 Joined:Jan 2012	Message Posted: Apr 29, 2012 2:16:40 AM Ignore TRYWI Report Abuse okay
USAv8tor Veteran Author Long Island Posts:348 Points:138,665 Joined:Mar 2012	Message Posted: Apr 29, 2012 1:56:15 AM Ignore USAv8tor Report Abuse Regime change 2012!
jwkycola All-Star Author Columbia Posts:817 Points:533,150 Joined:Jul 2011	Message Posted: Apr 29, 2012 1:13:13 AM Ignore jwkycola Report Abuse I don't think cheap oil will be back.
anascom Champion Author Hamilton Posts:1,593 Points:553,115 Joined:Feb 2011	Message Posted: Apr 29, 2012 1:08:24 AM Ignore anascom Report Abuse i don't agree that the days of cheap oil are over. it's about predictions and unreasonable bidding in wall street! Plus printing excess of paper money by the federal reserve!
ccf_jeff Champion Author St. Louis Posts:15,292 Points:2,565,550 Joined:Sep 2005	Message Posted: Apr 29, 2012 12:21:01 AM Ignore ccf_jeff Report Abuse Of course those views aren't mutually exclusive, Jeff4U.
Jeff4U Champion Author Atlanta Posts:8,762 Points:1,853,345 Joined:Nov 2004	Message Posted: Apr 29, 2012 12:18:18 AM Ignore Jeff4U Report Abuse No Forbes, I'm not convinced that cheap oil is over. But I am convinced that socialist leadership that deters use of our resources and wants us to depend only on government handouts are definitely a problem. OMG!
Blue_Cruzer Champion Author Lexington Posts:7,525 Points:1,670,560 Joined:Mar 2007	Message Posted: Apr 29, 2012 12:10:31 AM Ignore Blue_Cruzer Report Abuse The old days are forever gone
1momsunshine Champion Author Ottawa Posts:5,495 Points:1,001,555 Joined:Mar 2010	Message Posted: Apr 29, 2012 12:03:16 AM Ignore 1momsunshine Report Abuse ok