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Side Topic for Great Depression Thread

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  1. Oct 25, 2005 #1
    Side Topic for "Great Depression" Thread

    The demand for oil is also on the rise though. As vast as these reserves may be, all that does is buy us a little more time to figure out alternatives/fight over it. It will still run out eventually.
     
  2. jcsd
  3. Oct 25, 2005 #2

    russ_watters

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    The law of supply and demand holds that as supply decreases, prices increase exponentially, which reduces demand. As a result, the less oil we have, the less people will want, and we will *never* "run out".

    Not even the peak oil man himself says that it'll "run out":
    http://www.lifeaftertheoilcrash.net/

    In any case, the basic problem with his theory, is that his bell curve is so far not acting much like a bell curve. His peak is looking more like a plateau because technology and economics are intervening to find more oil, make more oil available, and make more oil economically viable to recover.

    edit: While I agree that we need to start putting alternatives into use immediately (nuclear power), I don't buy the doom-and-gloom scenario he paints.
     
    Last edited: Oct 25, 2005
  4. Oct 27, 2005 #3
    What I worry is, that oil will become too scarce before alternatives are implemented too such a degree that the demand for energy is met. I don't much relish the thought of living in society where energy shortages are the norm.
     
  5. Oct 27, 2005 #4
    Is that not a theory rather than a hard set Law?
     
  6. Oct 27, 2005 #5

    russ_watters

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    A "law" is a mathematical relationship. Calling it a law does not imply anything about how set-in-stone the underlying principles of market economics are. But if you are asking if market economic theory works (if the predictions match reality), the answer is yes.

    http://en.wikipedia.org/wiki/Physical_law

     
    Last edited: Oct 27, 2005
  7. Oct 27, 2005 #6

    Art

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    Actually it's just plain wrong :biggrin: . Whether or not the price increases (or even decreases) and by how much, as supply constricts, depends on the price elasticity of the product, substitute goods etc... etc..
     
    Last edited: Oct 27, 2005
  8. Oct 27, 2005 #7
    get yourself a diesel car, convert it to run on vegetable oil, and get free vegetable oil from local restaurants, then refine it yourself in your garage and use it to power your car for 55 cents per gallon (even though the oil is free, the equipment you need for it costs a bit), and you can even power and heat your house with it. I saw it all on dirty jobs (a great tv program if I might add).
     
  9. Oct 27, 2005 #8
    Call me old fashioned but I thought mathematical relationships were always true? For example Pi theorm... Or simple Algebra

    I wasnt asking that, I was wondering why you used the word "Law" And by doing so you are impling that * The law of supply and demand holds that as supply decreases, prices increase exponentially,* is true for every premises, which it isnt..
     
    Last edited: Oct 27, 2005
  10. Oct 27, 2005 #9

    russ_watters

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    Yes, they are. I guess what you are missing is the domain of applicability. A law says if this(1) is true, then this(2) must be true.
    Because that's the convention. Do a google search for it and see how often it is referred to as a "law". Heck, Newton's Law of Gravity is known to be wrong, but it is still a law!
    ?? You read the exact opposite of what the meaning of "law" is. Why do people always assume I'm trying to pull a fast one on them? Is it because people want me to be wrong, so they assume I didn't mean what I say so that what I meant could be wrong? I meant what I said!

    A law is valid for a very limited set of premises - and this happens to be one of them for this law. I knew that when I said it and I meant it!
     
  11. Oct 27, 2005 #10

    Art

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    There is a relationship between supply and demand which are married to one another through a complex set of variables (a couple of which I've already mentioned) but the oft quoted rule of supply decrease = price increase is generally false in the long term. Just as in general abnormal profits are unsustainable in the long term.

    In this specific case oil prices will not rise exponentially as supplies decrease because at some point they will pass a threshold where other alternatives will become economically viable. At this crossover point even if the total world oil reserves continue to fall prices will also fall to compete with the competing energy formats.
     
  12. Oct 27, 2005 #11
    Did you not just state that a mathematical relationship is ALWAYS true? Did You not also stated that a Law is a mathematical relationship?

    I mearly followed from what you said that "The law of supply and demand holds that as supply decreases, prices increase exponentially" is a mathematical relationship.. such that it is always true, ie if supply decreases then prices increase expontially.. which as Art has highlighted is not always true...

    Maybe, but where was it stated?
     
  13. Oct 27, 2005 #12
    Hey since we're now discussing mathematical theory vs. law does this get split off into a new thread?

    Side Topic for Side Topic for "Great Depression" Thread.

    :rofl:
     
  14. Oct 27, 2005 #13

    russ_watters

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    Always true under a specific set of circumstances. I guess my not combining those two into one sentence confused you - but they have to go together. To say something is "always true" (which I did not - you did) would be nonsensical. Ie, you can't use the law of supply and demand to explain the behavior of women. (:biggrin:)

    Think about my Newtonian Gravity example: Newtonian gravity is known to be wrong, but is still used because it is still useful under certain, specific conditions.
    Again, I never said it was always true - and Art is correct. But that doesn't have anything to do with what I've posted so far. If you want to get into it, those deviations from perfect/simple market conditions are why I don't buy the "peak oil" hypothesis. Other forces will intervene to overcome simple supply and demand. The graph on the peak oil page is a smooth bell-curve, reflecting a perfect supply and demand situation. The reality will be somewhat different.

    But my first post (2 posts, actually) was not about that. It was about how some people misread the "peak oil" hypothesis to imply that we will "run out" of oil. All I was pointing out was that's not what "peak oil" is about.
    It isn't stated. I guess I figured everyone would realize that it had to be there, so there was no need to state it explicitly. I'm not doing a dissertation here. Perhaps the guy who wrote the book included his calculations and assumptions in the book, if you care to read it. I don't see it as being all that important, though.

    I think I'm finished with this line of argument though - it is soooooooo trivial. If you want to debate "peak oil" though, I'm all for it.
     
    Last edited: Oct 27, 2005
  15. Oct 28, 2005 #14
    Not too much to discuss about peak oil, except when it will happen.
     
  16. Oct 29, 2005 #15
    I was hoping that You'd end up here.

    Okay, Russ ... Here's the master ... An oil industry professional.

    He eats, sleeps and breathes it.
     
  17. Oct 29, 2005 #16
    Naah, I just drink it sometimes:bugeye:
     
  18. Oct 29, 2005 #17
    I think I found your problem then.

    You know mineral oil is a laxative?:biggrin:
     
  19. Oct 29, 2005 #18
    Anything better than Baijiu!
     
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