Are low oil prices good?

If you’ve read the ‘about me’ page of this blog, you’ll know that the reason why I’m doing what I’m doing is something that goes by the name of ‘peak oil’.

I don’t write about it here because there are so many people out there doing a better job of it than ever I can. I focus on writing about how I’m preparing.

One of these is Russian-born American, Dmitry Orlov. If you think low oil prices are a Good Thing and are here to stay, you should read his latest piece. Don’t be put off by his views on the Paris event. He knows where it’s at, all right. Stop believing that the people in power over you actually care about you. When you realise they don’t, everything falls into place. Paris, MH17, Boston, 911…it all makes sense.

 

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7 Responses to “Are low oil prices good?”

  1. notsomethingelse Says:

    Are low oil prices good or bad? Depends on how you look at it, or perhaps more accurately, how it plays out..

    The good part? It spells the end, or the beginning of the end ( since I am not sure how long the process will take), of industrial civilisation. Why? Because it will mean the withdrawal of funding/investment, and a large part of these industries could not be profitable even at the higher levels of pricing. Rigs are being closed at a fast rate already: http://www.bloomberg.com/news/2015-01-16/drillers-idle-55-oil-rigs-pushing-six-week-drop-to-209.html

    The bad part? It will, or may, cause a yo-yo effect of low/high prices, which will confuse the picture, muddy the waters, create spin and inject just enough energy into the festering corpse of industrial civilisation to keep it staggering along for a longer time than it deserves to do.

    It appears that April 2015 may be a very interesting time. That is when oil/gas company’s credit lines are reviewed and one thing these fossil mining businesses cannot continue to exist without is huge amounts of cheap credit. http://www.bloomberg.com/news/2015-01-20/a-credit-line-reset-looms-over-oil-drillers.html

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    • foodnstuff Says:

      Thanks for the links. It’s going to be an interesting year. If industrial civilisation hangs on for longer than it deserves, it’ll do more damage to planetary ecosystems, which will mean a longer recovery time after we’ve bitten the dust, but oh well, the earth still has plenty of time. It’s humans that don’t.

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  2. narf77 Says:

    In one word “No”. When we keep the price of something artifically low we lull people into thinking that there is an unlimited amount of it and thus we have no need to worry about it running out. It is amazing how much people can carry on denying something when this happens. We will keep using as little fossil fuel energy as we can with a view to eliminating it altogether when we can. Thank you for this most important post Bev. We all need to remember that where one thing is being kept artificially low in price, something else is paying through the nose 😦

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  3. rabidlittlehippy Says:

    This only backs up something I heard from Gail Tveberg (I think) a while back. It costs money to extract oil. You have to sell at a profit to extract more. No profits means no more extraction so from that side of the argument alone, yes, low oil prices are FABULOUS! The lower they go the closer the end will be. Bankruptcy for all oil extractors and then maybe, just maybe we will have a long hard look at the way we have pillaged the only place we can call home.

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    • foodnstuff Says:

      All they have to do to raise prices (& profits) again is to cut back on production. Less oil on the market = higher prices.

      Price has fallen because demand has fallen (because of the economic situation…people are cutting back on oil use), Normally OPEC would cut production to force prices back up again, but this time they’ve continued pumping flat out to keep prices down and force (mainly) American frackers out of business, because they need high prices to maintain profits. The Saudis can continue this game longer than other OPEC members because they’re richer; it might drive some other OPEC members to the wall, though. This drop is only temporary, unfortunately. It’s not over yet, although cheap oil means maybe people will use more of it and the world will run out sooner rather than later. Not exactly what I want…I want it to last as long as I do; after that I don’t care.

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  4. Chris Says:

    Low oil prices are good, if its because demand has dropped. It means people are learning the game can change and doing it before they’re forced to.

    There are other things at play too, but I just wanted to highlight the cause behind the low oil prices being important. Before, low prices was because oil was readily available. Now its because people are demanding it less.

    If we’re demanding it less, why? Is it because we’re not buying into the commercialisation of nature so much, and longing for the real thing instead? That’s a good trend to have going. 😉

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    • foodnstuff Says:

      Unfortunately, I don’t think (most) people are voluntarily reducing their consumption; all the pundits are saying it’s because, with the economic situation the way it is, many people can’t afford the high prices and are cutting back out of necessity.

      I don’t necessarily think low prices are good (even though it’s good for my hip pocket), because it means people will use more of it, the decline rate will increase and we’ll run out all that sooner. But it’s a complex situation. The real problem is that we’ve built a whole way of life around a finite, non-renewable energy source and that has to change, somehow, sometime. It can’t go on indefinitely.

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