Jeff Rubin....Oil $225 by 2012 (Good Vid)

[Mega]

http://www.environmentalleader.com/2...limate-change/

Mike

[sunskyfan]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Thanks ... good stuff.

[bcassill]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

I watched this video last night after finding it on link off ZH (I think). Anyhow, this goes a long way towards what others have been saying about Peak Oil. :eek:

The Credit Clowns on Wall Street and the City (i.e. London) are going to have a very fun time trying to manage the 2nd or 3rd leg of the economic implosion when oil spikes to $200 a barrel.

Of course, now we know why these morons have been buying up oil and parking it in tankers at various points around the globe. The money they'll make off of it still won't save their sorry skins from all the other losses they're going to take. :p

[due_indigence]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Adds some new peak oil permutations...rising domestic oil demand in Saudi Arabia and Venezuela at heavily subsidized prices. Also, globalization will become 'too expensive'. Comparative advantages will wither away under three-digit oil prices. Homegrown will pick up renewed economic advantage. To all those who fear New World Orders and the like, doesn't peak oil imply decentralized control and localism?

[jneal3]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Adds some new peak oil permutations...rising domestic oil demand in Saudi Arabia and Venezuela at heavily subsidized prices. Also, globalization will become 'too expensive'. Comparative advantages will wither away under three-digit oil prices. Homegrown will pick up renewed economic advantage. To all those who fear New World Orders and the like, doesn't peak oil imply decentralized control and localism?

I think the accompanying 30% world gdp decline (per Hirsch/EJ) and associated disruptions outweigh borderline-utopian visions of jobs for TV repairmen returning. Lots of people are literally going to starve. A silver lining behind an oncoming funnel cloud isn't much comfort.

[stetts]

Are transportation costs really that onerous?

Just askin'. Mr Rubin makes quite a big deal about the costs of transoceanic transportation, pretty much equating this one factor with overseas labor costs. As oil goes up, transportation goes up, labor advantage vanishes and suddenly it's cheaper to buy locally. Hmmm.
Ok, I can buy the argument that larger transportation costs offset some labor cost advantage and something that needs air freight will suffer. But seems to me those container ships are pretty efficient.
Anyone have data?
Thanks. Stetts

[llanlad2]

Re: Are transportation costs really that onerous?

Just askin'. Mr Rubin makes quite a big deal about the costs of transoceanic transportation, pretty much equating this one factor with overseas labor costs. As oil goes up, transportation goes up, labor advantage vanishes and suddenly it's cheaper to buy locally. Hmmm.
Ok, I can buy the argument that larger transportation costs offset some labor cost advantage and something that needs air freight will suffer. But seems to me those container ships are pretty efficient.
Anyone have data?
Thanks. Stetts

The article below refers to the UK but does seem to support the above argument.

It appeared in The Times a couple of weeks ago.

Manufacturers increasingly are moving production back to Britain as shoddy quality and higher freight prices are undermining the cost advantage of producing goods overseas.
A report into the state of the manufacturing sector by the EEF and BDO, the accountants, finds that one in seven companies surveyed had moved production back to the UK from abroad in the past two years

[due_indigence]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

It's an interesting thesis. The prohibitive cost of energy will drive off-shore industry back 'onshore'.

Despite the doom-laden commentary thet we love to bandy about up here, economics is rarely an asymetric Armageddon event. Every push generates a pull. Nips and tucks, chutes and ladders. The sky won't fall. It'll just shift.

[jneal3]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Despite the doom-laden commentary thet we love to bandy about up here, economics is rarely an asymetric Armageddon event. Every push generates a pull. Nips and tucks, chutes and ladders. The sky won't fall. It'll just shift.

I completely agree that doomster-ism is a very slippery slope, but asking this world's economy to do without (or largely replace) oil is a disruption without historic precedent, if it happens as quickly as some are predicting. It's one thing to experience economic change due to new energy technologies that result in growth (wood to coal, coal to kerosene, kerosene to gasoline); it's another to take a built-up system and take away the energy source it is entirely based on and not replace it with something more efficient. I'm usually pretty optimistic about the advancement of civilization through technological change, but this peak-oil change seems unique in that there are no apparent viable solutions on the horizon that even come close to the energy density and 'low' cost (maybe not when factoring in military and environmental costs) of petroleum.

[Jay]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

This puts Al Gore's efforts into context for me. I don't doubt for one minute that "climate science" is a fraud, yet, if you read between the lines, this presentation shows why a carbon tax might make sense from an American economic perspective in a world of expensive oil. Listen to what he says, especially at the end, about the efficiency of the American economy using steel as an example. Carbon taxes (beside being another sop to the bankers and power tool for the politicians) are essentially a tariff on foreign goods that are made in a less less energy efficient manner than American goods. China with its extensive coal use and the Middle East with its extensive oil use are at a distinct disadvantage when competing against a relatively efficient American economy which has already had the luxury of maturing. The higher the carbon tax, the more important role carbon efficiency plays, and thus limits the advantage of cheap labor to an extent. For a Western banker or politician it is genius really, especially in a world of dwindling resources and an increasing population; Green Imperialism.

[bcassill]

Re: Are transportation costs really that onerous?

Just askin'. Mr Rubin makes quite a big deal about the costs of transoceanic transportation, pretty much equating this one factor with overseas labor costs. As oil goes up, transportation goes up, labor advantage vanishes and suddenly it's cheaper to buy locally. Hmmm.
Ok, I can buy the argument that larger transportation costs offset some labor cost advantage and something that needs air freight will suffer. But seems to me those container ships are pretty efficient.
Anyone have data?
Thanks. Stetts

Higher oil prices will destroy global supply chain management. All you have to do is think of something like the 787 Dreamliner that is sourced from a multitude of vendors across Asia, Europe, and North America. Understand that higher fuel prices are like an extra tax at every stage of the supply chain. China imports raw materials from places like Africa, Australia, Brazil, etc. The final products then have to be shipped all the way around the world to markets in Europe and North America.

Just understand that fuel prices dictate prices for all goods and services. If you watch Michael Ruppert's "Collapse", you'll get a good idea of what the impact of peak oil means. Everything we do is dependent on oil from the food we grow to transportation. I can easily imagine a situation where shortages could develop because it will simply be too expensive to ship asparagus from Peru or kiwi's from New Zealand.

I'm not so worried about the developed world. We'll manage. The fear I have is for a new wave of "failed states" as third world countries collapse under the weight of poverty, starvation, and local conflict. A few more Somolia's is the last thing we need.:eek:

[GRG55]

Re: Are transportation costs really that onerous?

Just askin'. Mr Rubin makes quite a big deal about the costs of transoceanic transportation, pretty much equating this one factor with overseas labor costs. As oil goes up, transportation goes up, labor advantage vanishes and suddenly it's cheaper to buy locally. Hmmm.
Ok, I can buy the argument that larger transportation costs offset some labor cost advantage and something that needs air freight will suffer. But seems to me those container ships are pretty efficient.
Anyone have data?
Thanks. Stetts

The issue relates mostly to those traded goods where the shipping cost is a large part of the value of the product. Where the product has a high relative value and shipping is but a small amount of the final selling price, those goods will still be "globalized".

This is the reason China is trying to move "up market" into manufactures of more valuable end products and not just low value, commoditized goods.

[pwcmba]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

Thanks - I learned a bit and confirmed some points from the video.

[tacito]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

So, are carbon taxes about Climate Change or about Peak Oil? Or maybe Climate Change is the politicaly correct name for Peak Oil?

I remember from school some chemical reactions like this one (nat gas burning):

CH4 + O2 -> CO2 + H2O

Then we used to add numbers to match the proportion of the elements:

CH4 + 2 O2 -> CO2 + 2 H2O

That implies that the carbon emisions are a constant proportion of carbon consumption. So why give credits for dubious emision savings if taxing carbon consumption is easier to quantify?

If EJ is right, the price of oil won't be high all the time, but up and down as the economy goes on and off. So we may have oil prices that do not reward saving oil enough. So it makes sense to tax oil. For the benefit of the now bankrupt governments, not for Wall Street. They have been already bailed out.

As for the climate, whatever is the efect that CO2 has on it, the efects will be the same with or without carbon taxes. Simply because in eather case we will burn the same amount of carbon/hidrocarbons: all we can find. Then we will stop.

[touchring]

Re: Jeff Rubin....Oil $225 by 2012 (Good Vid)

http://www.environmentalleader.com/2...limate-change/

Mike

Nice call on the oil price, but as for carbon tax, doesn't make sense as the US is not well known for it's green initiatives. The US burns a lot of coal. Isn't Buffett buying into coal transport for Burlington?