Original Message: ----------------- From: hkhenson [EMAIL PROTECTED] Date: Wed, 14 May 2008 15:06:34 -0700 To: [email protected] Subject: Re: Brin-l Digest, Vol 381, Issue 3
At 12:00 PM 5/14/2008, Kevin B. O'Brien wrote: snip >Now, do we conclude from this that there are *no* limits to growth? >I think not. Just because the Club of Rome had a flawed analysis >does not mean that there are no limits. What does the analysis look >like if we say that resources will never completely run out, but >will instead become progressively more expensive? >If the price of food depends tightly on energy (and it does) then the >effect is that one heck of a lot of people die. >http://www.drmillslmu.com/peakoil.htm That site has interesting speculation from a Psych. professor. As always, my prejudices as an experimental scientist show, so as anyone who knows me would understand, I looked at historical food and energy prices to see if this statement was correct. For food, I took two staple US grains that could be found quickly: Corn and Soybeans. For energy, I took oil prices. The food prices are given in present year dollars, not inflation adjusted dollars, so I used the inflation adjuster used at the oil site for the food adjustment. This guarantees that the adjustment will have no effect on the relative prices. http://www.agmanager.info/crops/insurance/workshops/filespdf/ABecorn.pdf http://www.inflationdata.com/inflation/inflation_rate/Historical_Oil_Prices_ Table.asp The results are as follows: with soy meaning soybeans, the unites for corn and soybeans being bushels and the units for oil being barrels. Corn Soy Oil 1973 $13.94 $38.67 $22.29 1974 $15.23 $33.22 $39.77 1975 $12.17 $23.64 $47.63 1976 $10.30 $23.66 $48.36 1977 $6.55 $18.67 $49.88 1978 $7.06 $20.40 $48.17 1979 $8.08 $20.58 $71.96 1980 $8.73 $19.52 $95.50 1981 $7.19 $16.01 $82.70 1982 $5.08 $12.44 $69.33 1983 $7.45 $17.93 $61.34 1984 $6.01 $12.90 $58.14 1985 $4.49 $10.04 $52.56 1986 $3.08 $9.21 $27.66 1987 $2.90 $9.39 $32.81 1988 $5.14 $15.15 $26.45 1989 $3.90 $9.91 $31.05 1990 $4.02 $9.76 $37.17 1991 $3.84 $8.77 $31.15 1992 $3.28 $8.23 $28.81 1993 $3.62 $9.76 $24.36 1994 $3.10 $8.11 $22.19 1995 $3.90 $8.24 $23.09 1996 $4.87 $10.59 $27.38 1997 $3.44 $8.67 $24.40 1998 $2.65 $6.91 $15.35 1999 $2.69 $5.90 $20.83 2000 $2.17 $0.30 $33.39 2001 $2.57 $5.89 $27.29 2002 $3.02 $0.07 $26.61 2003 $2.51 $6.36 $31.62 2004 $2.50 $6.59 $41.84 2005 $2.31 $6.75 $53.77 2006 $2.40 $5.80 $60.73 2007 $3.35 $8.53 $64.92 Note that the price for corn and soybeans is higher in 1998 than in 2006, while the price for oil is almost 4x higher in 2006 than 1998. In 2008, we're starting to see a difference because 30% of the corn harvest is being diverted from food to a government subsidized ethanol program. http://biz.yahoo.com/ap/080403/corn_at_6.html It makes sense, that if you take 30% of the supply off the market, prices will rise substantially. Brazil is doing similar things with sugar cane ethanol. As for peak oil production, with all due respect, a close (we spent 5 Christmases in a row together) friend had primary responsibility for his company's participation in _the_ major new US oil play. I personally know the factors involved. The peak oil arguement is arm-waving nonsense that has nothing to do with the actual ecconomics of the oil patch. For example, the arguement doesn't explain why oil fell to (inflation adjusted) prices not seen since the Great Depression in 1998. I have a model (which is based on plain Jane vanilla ecconomics) that does explain it. Isn't a model that fits data superior to a model that has been repeatedly falisfied when used in the past? Dan M. -------------------------------------------------------------------- mail2web LIVE – Free email based on Microsoft® Exchange technology - http://link.mail2web.com/LIVE _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
