Environment & Energy
Related: About this forumWhatever happened to $200 oil?
Last edited Fri May 25, 2012, 12:34 PM - Edit history (1)
http://www.theglobeandmail.com/report-on-business/commentary/jeff-rubins-smaller-world/whatever-happened-to-200-oil/article2440790Four years ago, when I was still chief economist at CIBC World Markets, I forecast that global economic growth was on pace to send oil prices (CL-FT91.090.430.47%) to $200 (U.S.) a barrel by 2012. In short, the argument was based on a supply-driven analysis that weighed the sources of future oil supply against the prices that would be needed to make the extraction and processing of that oil economically viable.
Since that call (which clearly hasnt come to pass) received some attention at the time, it feels fitting to spend a few words discussing what happened to derail the projection. That particular analysis, unfortunately, didnt adequately address the stifling impact that rising oil prices would have on economic growth. At the time, a constrained outlook for global production growth against a backdrop of runaway demand meant prices had nowhere to go but up. As subsequent events would dramatically demonstrate, though, triple-digit prices had a much more critical effect on demand than supply.
If a mea culpa is in order, its roots can be found in the decision to underplay the demand side of the equation. Oil prices plunged to $40 a barrel after economic growth collapsed, taking global oil demand along for the ride. And that same movie is about to play out again. Recessions are already rolling across Europe. Economic growth in North America is lackluster, at best. Meanwhile, the spectre of sovereign debt defaults in the euro zone continues to hang over global financial markets. Added up, it spells another sharp drop for oil prices not because fuel is abundant, but because once again the world cant afford to stay out of a recession.
What happened to my forecast for $200 oil? Quite simply, the end of growth.
I fell into the same trap - ignoring the potential impact of oil prices on demand. I was sure demand was much more inelastic than it turned out to be.
This is why I now have such great hopes for ongoing global economic instability to help with our CO2 emission problem - we know that lower growth lowers the demand for fossil fuels.
RobertEarl
(13,685 posts)The methane being released from the formerly frozen solid seabeds is the sign of the end of climate stability. It will become an all too exciting world in which we live.
We might as well live it up. Yes. Join with the deniers and live like nothing we do matters. Because.... it is.... too... late.
GliderGuider
(21,088 posts)It's too late for one thing only - to save Global Industrial Civilization in its current form. This is, IMNSHO, a Good Thing.
However, it's not too late for human, animal and plant life in general. So in order to discharge our obligations to Gaia and all her life forms (not to mention making physical and karmic amends) I propose that we must live as though every single thing we do - every act, every word we say, every thought we think - matters. Because in the end it does.
We are the product of 4 billion years of evolutionary success. It's time to fucking act like it.
RobertEarl
(13,685 posts)Then no wonder we are on the Highway to Hell.
If we are to reap what we have sown, then the reaping will be a bitter harvest, indeed.
I feel like Diogenes? (sp) who looked for one honest man. Maybe it was Lot? Anyway, the only clean and pure are those who are clean and pure. And they live way back in the woods and jungles. The rest of us are damned.
But it's not my fault... i was raised this way. Wouldn't it be sinful to not honor the way i was raised? Is being comfortable now a sin?
Just wondering....... not accusing nobody of no thing.
OKIsItJustMe
(19,938 posts)No.
Remember the 7 deadly sins of wrath, greed, sloth, pride, lust, envy, and gluttony? How many of these come down to the sort of wasteful lifestyle you were raised to live?
If you were raised by drug addicts, and became a drug addict yourself, which would be more virtuous? For you to honor the way you were raised, teaching others to be drug addicts? Or to help others avoid the trap you and your parents fell into?
As a general rule, we have seen virtue in giving future generations a better life than our own. Sacrificing for their benefit. If you were raised to be a wastrel, then it would be virtuous of you to repent of that wastefulness.
RobertEarl
(13,685 posts)The question was a rhetorical one for the Guider, in an attempt at a side discussion. He is worthy because he hardly ever does the personal attacking like some here are so want to do.
GliderGuider
(21,088 posts)A mistake in perception I made a number of years ago pitched me headfirst into half a decade of despair. My mistake was in assuming that my personal experience was somehow universal. Or by extension, that the experience of First World citizens represented The True Situation. I didn't recognize that the bitter harvest is already being reaped by billions of people around the world, who have never known a "good harvest" in the first place. Those people living on under $10 a day represent the norm, not us.
The reason the coming harvest feels bitter to us is because our past experiences have conditioned our future expectations. A sense of dread can arise when we contemplate the idea that our expectations may be dashed by forces beyond our control. That has always been the case, and it is still the daily experience of most people - just not for us.
I don't know if the ideas of "purity" or "sin" are helpful. Judgement is far less useful that learning to recognize What Is and then going forward from that point. We all have to choose what to honor in the world around us. If the way I was raised was dysfunctional, if the way I was taught to see the world was damaging, should I honor it anyway? Or should I go forward with an intention to do better than that?
We are very comfortable, here in the First World today. That's not a sin, but it is probably a temporary condition - at least for material comfort, which is the main way we in the West have learned to define "comfort". One of the ways that we can deal with the probability of change - without having it become "bitter fruit" in our minds - is to change our personal definitions of comfort and happiness. The more we can shift those definitions towards ways of being that don't depend on stuff or our current arrangements with the world, the more we will be able to stay happy as those arrangements change.
OKIsItJustMe
(19,938 posts)Yeah, screw any future generations there may be. If they have to live with the mess we make, so be it.
Personally, I think we have a responsibility to them (even to other species) to do the best job we can of cleaning up our own mess. (Care to help?)
RobertEarl
(13,685 posts)Do you help? In what way?
OKIsItJustMe
(19,938 posts)Its about all most of us can do.
RobertEarl
(13,685 posts)Is what you do ALL you can do?
NickB79
(19,277 posts)My primary contribution has been to use my green thumb to distribute fruit and nut-bearing trees to the local area where I live. I've begun growing rootstocks of plums, apples, apricots, and pears for grafting purposes, and have over 100 hybrid chestnut seedlings in pots in my garden right now that will be given away next spring (to weed out the weak and possibly non-hardy offspring). My original plan was to plant them on my dad's farm, but he sold it and the new owner clear-cut the thousands of trees I planted since I was 12 yr old to the ground. Luckily, my 7 uncles own a combined 2000 acres of farmland, of which hundreds of acres are woodlots. If there is demand, I'll be growing a couple hundred every year from now on out, since chestnuts are one of the most nutritious, abundantly-bearing nut trees a person can grow or plant for wildlife.
RobertEarl
(13,685 posts)My heart breaks when i consider what the environment lost when Chestnuts died off. Too, the fact that the settlers were so dumb to have gone out and cut down all the Chestnuts because: They were going to die anyway.
Your loss of the work you did when younger is something that must at times be unbearable. You have done good to try again. As a fellow tree hugger, I salute thee.
joshcryer
(62,280 posts)While real denialists (people who downplay CO2 contribution to warming or that CO2 is even responsible for warming) go on about how solar and wind are going to save us all, etc.
RobertEarl
(13,685 posts)We can change the climate. We have. We will. Change is here, now!
Am leaning toward denying that wind and solar will save us.
It may be too late.
eppur_se_muova
(36,309 posts)Include a 10% finder's fee.