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Forum Post: High-Priced Fuel Syndrome

Posted 2 years ago on Sept. 28, 2012, 3:13 p.m. EST by notaneoliberal (2269)
This content is user submitted and not an official statement

By Gail Tverberg ; Posted on September 26, 2012 14 Votes

Governments and economists around the world have not figured out that what the world economy is suffering from, to varying degrees, is “high-priced fuel syndrome“.

High-priced fuel syndrome has a number of symptoms:

Slow economic growth, or contraction People in discretionary industries laid off from work High unemployment rates Debt defaults (or huge government intervention to prevent debt defaults) Governments in increasingly poor financial condition Declining home and business property values Rising food prices Lower tolerance for immigrants Huge difficulty in funding retirement programs, programs for disabled, and regular pension plans Rising international tensions related to energy supply The countries with the most problem with high-priced fuel syndrome are the industrialized countries that are big importers of oil. This is the case because oil has been a particularly high-priced fuel in the past few years. Importing high-priced oil adds challenges of its own, since funds used for imported oil flow out of the country.

http://ourfiniteworld.com/2012/09/26/high-priced-fuel-syndrome/

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20 Comments


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[-] 1 points by notaneoliberal (2269) 2 years ago

The big banks still use gold....In what cases. Most currencies are tied to the US dollar, as of 1948. Most oil is purchased in US dollars. Iv'e heard the gold/ oil ratio argument before, but there are other factors involved in the increasing cost of oil. One very significant factor is EROEI. http://www.theoildrum.com/node/3786 A more important measure is the cost of oil/ GDP. http://transitionwhatcom.ning.com/profiles/blogs/increase-in-oil-price-as-a-percentage-of-gdp

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[-] 1 points by notaneoliberal (2269) 2 years ago

Good to know some understand the concept of EROEI. I haven't watched "Crash Course", but I will. I'm familiar with Chris Martenson.

[-] 1 points by friendlyopposition (574) 2 years ago

I think one of the problems is that renewable energy doesn't want to "compete." The energy providers know what our breaking point is. For example, I think the companies in my region figured out that people will pay about $4 per gallon of gas before starting to drastically change their routines. Lets say that the average car goes 25 miles on a gallon of gas. If/when the energy companies market another fuel solution - the price will be comparable. If they made an engine that ran on banana peels, and you could go 25 miles on 1 banana peel - then I think the price of bananas would go up to about $4 each. Sad, but true.

[-] 1 points by notaneoliberal (2269) 2 years ago

The trouble is, there is no comparable fuel for transportation in terms of energy density and price. Electric cars could do a fair job, but people don't like the price, or the limited range.

[-] 1 points by friendlyopposition (574) 2 years ago

You have to wonder how many patents are out there that have been bought out and hidden by the oil lobby. Kind of like the subway line that used to exist in LA. Car companies bought out sections of it, and shut it down. That's messed up...

[-] 1 points by notaneoliberal (2269) 2 years ago

Electric transport was dismantled in many cities: http://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy

[-] 1 points by friendlyopposition (574) 2 years ago

Yup - that's the one I'm talking about.

[-] 1 points by Karlin (350) from Nelson, BC 2 years ago

Its a fact that our economy developed through the 20th century on the back of cheap energy, so it is choking that economic model off when the price of energy goes high. However, things must change, we have global warming and too much CO2 in the air - air and water are more precious than money.

I want to see gasoline selling for $10 a gallon, so that renewable energy can compete, and be cheaper than fossil fuels - who is with me?

[-] 1 points by notaneoliberal (2269) 2 years ago

Too bad we didn't convert to renewables 30 years ago. The trouble is 10$ gasoline would cripple our already weak economy even further. Be careful what you wish for.

[-] 1 points by Karlin (350) from Nelson, BC 2 years ago

Good point - $10/gal gas tomorrow would cripple the economy, but lets try to find solutions ok? - - a GRADUAL increase to $10/gal, to allow the construction of renewable capacity to replace the more expensive energy form [the $10gal. gas * and efficencies {some say that efficiencies could reduce energy demand by 30% to 50%, with existing technologies and good old common sense - those efficiencies are do-able now

[-] 1 points by notaneoliberal (2269) 2 years ago

Yes, solutions are long overdue. If we don't, we run short of oil, burn up the planet, or both.

[-] 1 points by Builder (4202) 2 years ago

Hemp seed oil burns clean, is emininently renewable, and costs phukk-all to grow.

Just get the DEA to drop the ban on growing hemp, and keep monsatan's hands off the operation.

[-] 1 points by notaneoliberal (2269) 2 years ago

That might be at least a partial solution.

[-] 1 points by Builder (4202) 2 years ago

I've seen the mountains of grain that we grow here in Australia.

Hemp requires only average soil and water conditions.

It just takes a change in thinking to make these ideas feasible.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

Actually gas prices have been on a downward trend for decades if you adjust for inflation. There was a peak in in 1981 that eventually leveled off. It's only been since about 2000 that gas prices have taken off.

http://inflationdata.com/Inflation/images/charts/Oil/Gasoline_inflation_chart.htm

[-] 1 points by notaneoliberal (2269) 2 years ago

That's pretty much in line with the graph in the link.

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

I think you're right, it's similar. Comparing gasoline to oil prices is not accurate because the increasing ability to convert more gasoline from a gallon of crude. Like comparing peaches to nectarines.

[-] 2 points by notaneoliberal (2269) 2 years ago

OK, Where did you get the idea that more gasoline can now come from a barrel?

[-] 1 points by jrhirsch (4714) from Sun City, CA 2 years ago

Depending on the refining process and the type of oil they can get close to 50% gasoline from a barrel of crude. In the early days of refining they only got about 20%.

http://wiki.answers.com/Q/How_much_gasoline_can_be_made_from_one_barrel_of_crude_oil

[-] 1 points by notaneoliberal (2269) 2 years ago

I think you are referring to "cracking". There is such a thing as what is called 'processing gains" There is a net gain of about 2.2 gallons over the original 42 on average. This varies with the type of oil. Cracking is more about what ratio of different products you end up with. None of this technology is particularly new , however. http://www.theoildrum.com/story/2006/3/26/125439/544 http://www.txoga.org/articles/308/1/WHAT-A-BARREL-OF-CRUDE-OIL-MAKES