[Industrialblog,
May 4, 2005]
Doooooom!
Bought a Time magazine last night so I had something to read during dinner. Among the things I learned:
Cheap oil is no more, forever, because of increased demand in the market from India and China and because the oil that is cheap to extract is already gone forever and only the expensive oil deep down in the earth's crust is now extractable. The price of gas could rise to $5 a gallon in the next few years. And yeah, the Time reporter was loving it.
Um ... couldn't increased demand create strong incentives to find more oil? Couldn't extraction methods become cheaper and more efficient? Couldn't political improvements among OPEC nations and floating the price of oil change the price?
No, what am I thinking? Only one variable in an economy changes at a time and all other things are fixed, forever.
Tut-tut.
Cheap oil is no more, forever, because of increased demand in the market from India and China and because the oil that is cheap to extract is already gone forever and only the expensive oil deep down in the earth's crust is now extractable. The price of gas could rise to $5 a gallon in the next few years. And yeah, the Time reporter was loving it.
Um ... couldn't increased demand create strong incentives to find more oil? Couldn't extraction methods become cheaper and more efficient? Couldn't political improvements among OPEC nations and floating the price of oil change the price?
No, what am I thinking? Only one variable in an economy changes at a time and all other things are fixed, forever.
Tut-tut.