I had said: >>The countervailing factors can and do shift the supply curve -- or the demand >>curve [in response to higher energy prices].<<
A long time ago, Gar Lipow wrote: > Neither has been happening. The Energy Return on Investment (EROI) for > all fossil fuels has been rising. What is the EROI? just looking its name, shouldn't it be _falling_ due to peak oil, etc.? that is, if peak oil is a real phenomenon, shouldn't companies be getting less energy per dollar of their investment, not more? This fits in with the next bit: > So have real costs for conventional > fuels in general. The cost of extracting coal, oil, gas (plus uranium) > has been steadily rising. Gar goes on: > At the same time demand response to rising > prices still has low elasticity. Recently the response to oil prices > doubling over eight years was a 21% per capital drop in demand. That > is low a LONG TERM elasticity. And a lot of that demand drop may be > due to the recession rather than just oil price rises (though of > course the oil price increase may bear part of the responsibility for > the recession/depression). It's long-term elasticity that matters to this discussion. I don't know what its value is, but the impact of a price spike (doubling of prices) really doesn't indicate it. The long-term elasticity refers to the response to a sustained period of high real oil prices, of the sort that would occur due to peak oil. For example, there was a significant response to the high energy prices of the 1970s. A price spike, on the other hand, does not give a lot of chance for people and businesses to adjust the way sustained high oil prices do. Even so, the spike we had discouraged a lot of Hummer-buying. BTW, I wouldn't blame the recession on the high oil price, except to the extent that it was part of the speculative bubble that set the stage for the fall. I elided a bunch of stuff I agree with. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
