Some perspective on US oil consumption
US oil consumption, February 1979: 21,287 thousand barrels/day
US oil consumption, August 2008: 19,267 thousand barrels/day
(This is simply an illustration of the decreased oil intensity of the American economy.)
Source: EIA
Also, an interesting side note to the leaked IEA report (if anyone has a link for the original Financial Times article, I’d appreciate it) that has gotten largely overlooked is that the IEA projects oil consumption to fall in the developed world from now until 2030. They project all demand growth to come from the developing world.
A related thought prompt: Macroeconomists have different models to represent the short run, the long run and the very long run. Peak oil models of oil production represent the long or very long run. Is the exclusion of price from peak oil models (and, thus, treating demand as exogenous) like the classical dichotomy in long run macroeconometric models? If so, does this undermine the basing of policy decisions on peak oil?
This is a question of time horizon, scale and feedback loops.
Really like the deconstruction of the “Peak Oil” theorizing out there. You should consider a more expansive post to flesh out your argument. While the points you make are clear to me laying them out in greater detail would make your argument more illustrative.
One point that a PO wonk would make is that you underestimate the magnitude of the effect of price ratcheting on the economy, i.e. cheap energy underpins, to a great extent, much of globalization and its passing would be very disruptive. See the latest post at the Archdruid Report (http://thearchdruidreport.blogspot.com/).
Really enjoying your post by the way.
Comment by Dave — November 6, 2008 @ 5:40 pm
Dave,
Glad you enjoyed the post.
What your notional peak oil wonk overlooks, as I pointed out, is that his model doesn’t directly address the expense of energy. Price is determined by the supply-demand balance. The peak oil model regards the geologic limits to the rate of supply. Hence why I brought up demand.
“Price ratcheting” seems less exotic when we call it by its conventional name: inflation. I didn’t make any assertions regarding its impact on the economy. Such an assertion would require more justification than a brief thought prompt.
Comment by Wiggins — November 6, 2008 @ 8:27 pm