Peak oil apocalyptoids eating crow yet?

Earlier this year, we asked if oil would reach $200 per barrel by year’s end. Short of a sudden and dramatic crisis in the Middle East, that now seems impossible. The rising prices themselves put some long-overdue breaks on consumption—and now the economic crunch is continuing that trend even as prices fall again. From the Houston Chronicle, Oct. 30:

Prices at the pump: how low will they go?
Crude oil’s fall and a drop in demand could keep rolling those numbers back

Amid the recent avalanche of bleak economic news, one small bright spot has emerged: Gasoline has gotten a lot cheaper.

After topping $4 nationwide this summer, pump prices are down more than a dollar a gallon in the past month alone and even have fallen below $2 in parts of the country, including some stations in Houston.

Prices are likely to decline further in coming weeks as plunging oil prices, a seasonal drop in demand and a historic pullback in consumption by U.S. motorists this year continue to weigh on prices.

Yet cheaper fuel may not be enough to lure Americans back to their old gas-guzzling ways. Even as prices plummeted in recent weeks, U.S. drivers continued using less gasoline than they did a year ago.

The trend reflects not only the hard economic times, but fuel-saving changes made by some Americans in response to record fuel prices. Whether it holds, however, may depend on where gas prices settle.

On Thursday, the average U.S. price for regular fell 4 cents to $2.55 a gallon, and by more than 3 cents in Houston to $2.29 a gallon, according to AAA’s Daily Fuel Gauge Report.

The national average price has fallen six straight weeks and now sits at its lowest point since March 2007, according to the federal Energy Information Administration. Earlier this month, the average slipped below $3 a gallon for the first time since February.

While pump prices typically drop in the fall and winter following peak demand periods in the summer, the recent decline is sharper than normal.

It comes after the price of crude oil — which accounts for about half the price of gasoline — has sunk to less than half its July record of $145 per barrel. On Thursday, light, sweet crude for December delivery closed down $1.54 to $65.96 a barrel.

Pump prices are also weaker because demand is down. The slowing economy has put thousands of Americans out of work and off the roads. In addition, many U.S. drivers are trading trucks and SUVs for more fuel-efficient vehicles and are taking other steps to conserve following price shocks at the pump.

The “peak oil” crowd is of course predicting that the price will soon rise again, and they could be right. But note that even the evidence they marshal in defense of their prediction implies the price will rise again as a matter of policy—not geology. An Oct. 31 Wall Street Journal piece, “Peak Oil: Are Oil Prices Destined to Rise Again?”, is excerpted on the Peak Oil News website:

Crude oil futures continued down on Friday, spooked by the dim outlook for the U.S. economy. That’s precisely what makes it likely oil prices will rebound next year.

Big oil companies are already finding it harder to maintain, let alone increase, production. Chevron doubled its third-quarter net profit, but said production fell 5.7% in the quarter, after ExxonMobil reported an 8% production drop yesterday.

Falling oil prices are only going to accelerate that trend, analysts warn, at a time when OPEC is accelerating output cuts and production declines at oil fields around the world is apparently increasing.

Big oil as a whole needs oil prices of about $82 a barrel next year to fund their plans for new investment in oil exploration and production, Credit Suisse says in a new report. Right now, the consensus forecast of about $75 oil means overall, oil companies will suspend some marginal projects, as Shell has already announced with Canadian tar sands.

We have always argued that the price of oil is at present determined by geopolitics, not geology. But try explaining that to the apocalyptoids

See our last posts on the econocataclysm and the struggle for global oil.

  1. there’s the matter of the dollar as well
    A dollar crash would promptly put oil above 200$ obviously. Concerns about dollar inflation were one of the things that drove the price up this summer.

    It’s not geopolitics or geology: it’s both. Without the limits and discrepancies in geological endowment, you wouldn’t have oil geopolitics. And without the geopolitics, you wouldn’t have so much uncertainty and volatility.
    Arguing it’s all geopolitics is as short-sighted as arguing it’s all about geology.

    As to eating crow: this boom & bust thing has been predicted for a long time by the more cogent peakniks. Only this time, the main thrust of the bust has got nothing to do with oil depletion in my opinion… I guess the hard-liners would disagree.
    Peak oil is not about price anyway but about flow rate. If you really were so much more clever than anyone holding a different opinion than yours, you would know that.

    1. That’s true…
      Of course if the dollar collapses, we’d shoot right up to $200 per barrel. But that could also precipitate the switch to petro-euros—in which case the dollar price would no longer matter so much (outside the US).

      The peak oil apocalyptoids have been screaming for the last year that the price is going to keep going up and up, pointing to this as vindication. So I suggest you lecture them about flow rate.

      We have responded before to those who point to “limits and discrepancies in geological endowment” as underlying the crisis:

      There have been price shocks before, and they have all been in response to political crises in the Middle East: 1956 (Suez), 1973 (Yom Kippur War), 1979 (Iranian revolution), 1991 (Desert Storm). It is absurd to assume that the current spike is unrelated to the war in Iraq. It is true that elite concerns about Peak Oil may have helped spark the Iraq adventure. It is also possible that growing awareness of Peak Oil will keep prices permanently inflating. It is likewise possible the proliferation of the Peak Oil hypothesis is a strategy by the industry to jack up prices and thereby expand production. (There are huge reserves which have not been brought on line yet in the Caspian Basin, Venezuela and even Iraq.) In any case, politics, not scarcity—not yet—underly the current spike. The Peak Oil hypothesis was deconstructed at length on this website by George Caffentzis.

      1. again…
        You don’t know what you’re talking about: I don’t need to lecture any peaknik about flow rate, only journalists who keep trying to bring everyone down to their level of understanding. If it was about an ever-increasing price, it wouldn’t be called peak oil.
        Most peakniks have been talking about this for a lot more than a year. I’ve been concerned about oil depletion since the 80s.

        You’re intelligent enough to understand that sustained decline in US production isn’t geopolitical and that there’s a geological reason why the Middle-East produces so much oil. Nobody would be saying that the occupation of Iraq is about oil if not for its geology and that of its neighbours. Why do you keep clinging to these ideological blinders of yours?

        Caffentzis is talking about a specific political spin on peak oil. The only argument I could find against peak oil as such is an unsubstantiated analogy with Limits to Growth (which he should perhaps read or at least read again).

        1. Again?
          You won’t stop, will you? How helpful is it to tell us that the US wouldn’t be fighting to control oil in Iraq if there wasn’t oil in Iraq? Of course oil depletion is an inevitable reality in the long term. But that’s not why we just witnessed a shock. We are trying to challenge the conventional wisdom which holds that the price went up because we’re running out of oil, and the US is in Iraq to secure cheap oil for US consumers. The opposite is true. The price went up because the US invaded Iraq; the US invaded Iraq (in large part) in order to drive up the price.

          1. it’s more complicated than you seem to think
            Take that hypothesis of yours about Iraq causing “a shock” and try to falsify it with the data. In particular, look at the price moves since 1999, demand trends and the timing of changes in Saudi production before and after the invasion. It shouldn’t be too hard… but you need to get acquainted with the data first.
            I can’t do it for you because I’m not sure what shock you’re talking about.

            The only way to get anywhere near a sensible explanation for what’s happening is to acknowledge that’s it’s not a black & white issue. So yes, the price was rising because we’re running out (see Cantarell)… among other factors of course.

            As to your conspiracy theory, wouldn’t it have been more efficient to attack Iran or even Saudi instead? Imagine what that would have done to the price! No actual invasion required: a bombing campaign should have been sufficient.

            1. Mere sophistry
              You may not know (or, for the sake of your endless intellectual games, you may pretend not to know) “what shock I’m talking about,” but the rest of the world does. The Energy Department charts make it utterly clear.

              I never argued that it was a “black and white” issue and I acknowledge that the perception that we are running out of oil may be a factor. But even that isn’t the determinant one. We weren’t running out of oil five years ago when prices were deflated? What fundamentally changed in the last five years at the oil fields? Or is it more likely that the shock is a response to political instability and war, just as all the previous ones were?

              As for your disingenuous questions about our “conspiracy theory”: It would have been far less efficient to attack Iran, because Iran wasn’t crippled by Desert Storm and more than a decade of sanctions, and actually had some capacity to defend itself. Saudi Arabia is Washington’s ally, so bringing that up is a mere red herring. A bombing campaign would have been sufficient to create a price shock, but ultimately Washington was seeking strategic control of Iraq’s oil—as we have always argued. Do you bother to read what you are criticizing? (We’ve also documented that the Bush policy elite have been quite clear on this point.)

              We predicted in December 2001, when prices were falling, that the Bush administration was attempting to instrument a price shock. So we feel rather vindicated right now, thank you.

              1. you have no case and no evidence
                So it’s hard to explain where you’re wrong.
                I’m no psychic and I can’t read your mind by looking at charts. But at least I can get the timing of price moves right.

                Nothing changed fundamentally in the last five years: because of depletion, most of the new projects compensate for the falling output of older fields instead of increasing supply. Production has been stable from the winter of 2004 until this summer.
                There were no fundamental changes in the price dynamics either. Then as now and as before, the price was on an upward trend modulated by recessions and other demand-side stuff.

                I was most definitely not commenting on Vinograd. Instead, I simply replied to what you wrote.
                The strategic control motive makes sense of course.

                The other poster won’t provide you the IEA link because he’s talking about a leak. The Financial Times and others reported on it. Obviously the IEA doesn’t say anything about six new Saudis… I figure the quoted decline rates are intended to illustrate how much investment will be needed (to put new fields online and such).

  2. Cheap oil and no growth or expensive oil and growth but not both
    The peakists are still correct. Oil has now peaked and the market has done its job – bringing down demand through the price mechanism.. The economy will recover, production won’t because it can’t, the price of oil will go up and we will have another recession. Soon however production will begin to decline. The IEA is now saying the decline rate of the existing fields is between 6.5 and 9% that means in the next 10 years we will have to (find and) bring on stream the as much as 6 new Saudi Arabias…. This just ain’t gonna happen. If I were you I’d sell my suburban house and move into town because soon the commute is going to be way too expensive.. Oh whoops noone wants to buy it.

    1. I live in downtown Manhattan.
      And I ride a bicycle everywhere, and have no driver’s license.

      As we noted above: There are huge reserves which have not been brought on line yet in the Caspian Basin, Venezuela and even Iraq. No, not six new Saudi Arabias’ worth (we do wish you would link to that IEA source), but enough to effectively demonstrate that Planet Earth running out of oil is not what has precipitated the recent shock.

      And, as asked above: We weren’t running out of oil five years ago when prices were deflated? What fundamentally changed in the last five years at the oil fields? Or is it more likely that the shock is a response to political instability and war, just as all the previous ones were?

      The thesis in your subject line is probably correct. But maybe not for the reasons you think.

  3. You really are too stupid.
    You really are too stupid. Constrained resources go through wild swings in pricing as feed-forward speculations lead to feed-back demand destruction loops. Oil is basically going through these oscillations.

    1. Thank you for keeping the dialogue on a respectful level
      Then why were you apocalyptoids pointing to the price spike as vindication of your thesis six months ago?

      1. because production was essentially flat
        Sure, there’s lots of crass chatter about peak oil… but there’s some truth to it.
        The price signal is meaningless on its own. Suppliers were unable to raise production in response to the higher prices (caused by stronger demand)… that’s the vindication. It’s not a vindication for peak oil as such because peak oil is not about price (or reserves) but it’s an indication that supply is hitting limits.

        re: above… some of what you say makes sense and some of what you say doesn’t. Again, it’s not all or nothing, something or it’s opposite, black or white.
        What doesn’t make sense is the Iraq adventure as a cause for the price trend.
        If you think you’ve got a case that doesn’t amount to ideological handwaving, please lay it out unambiguously (cause, effect, mechanism and such).

        1. crass chatter… well said.
          DOE figures indicate that after the Iraq invasion world oil production went up from around 68 million bpd (where it had hovered for the previous five years) to above 73 million bpd, as OPEC fruitlessly struggled to bring down the global price.

          It is tiresome to have to respond to questions which appear to be disingenuous. A mere reading of the history will amply demonstrate that the price of oil always responds to war and instability (or fear thereof) in the Middle East, going at least back to 1956. For the past several years we have been following this on regular basis, reporting each market reaction to terrorism and saber-rattling. Just follow the links back and read for yourself. All documented fact. I will leave the “ideological handwaving” (or, as we prefer, interpretation) to Vinograd:

          With the invasion of Iraq—which sits on nearly half the Persian Gulf reserves—it was correctly perceived that the struggle for the planet’s most critical reserves was truly underway, and the third oil shock arrived. The price has escalated along with the level of insurgent violence ever since. The Great Fear driving the prices ever higher is that the US could lose control of Iraq, the conflagration could generally engulf the Middle East, and that Iran or jihadist elements far more intransigent than Saddam Hussein could emerge as new masters of the Gulf reserves.

          1. these are assertions, not evidence
            It seems you’ve got a hypothesis that can’t be falsified by data.
            Since no logical mechanism is needed and picking & choosing is allowed, I could document how the price of oil responds to bird migrations.

            The production started climbing before the invasion by the way (check the monthly data) but one could of course make up another ad hoc explanation for that.

            A closer look at Saudi production will also show they were limiting production during most of the run up to 73 mbpd (except perhaps briefly when Iraq was totally offline). They could have struggled much harder, or at least as hard as they did later as they were actually losing control over the price.
            Indeed, production reached 73 mpbd when the price was barely above the highest 2000 prices (remember, the price started rising in 1999).
            But do not let the data bother you…

            1. Please go ahead
              I greatly look forward to your documentation of how the price of oil responds to bird migrations.

              The data doesn’t bother me at all, since it supports my “assertions.” It couldn’t be otherwise, since my “assertions” are based on the data. Indeed the Saudis were limiting production through the run up to 73 mbpd, which was reached in 2005, the same year the price started to rise dramatically (shooting up to $60 from 1999’s $25). World production began to approach 70 mbpd in 2003, the same year as the invasion, and surpassed it the following year. Contrary to the usual laws of supply and demand, production and price both remained high in the ensuing three years. Why do you play these games?

              You’d better be preparing a nice fat year-end check for World War 4 Report after all the pointless grief you’ve put us through in recent months.

              1. you don’t seem to understand supply and demand
                And you don’t seem to be able to read the data either: 73 mbpd was reached in 2004. The price was around 11-13$ in late 1998 and early 1999.

                But you put your finger on the most interesting thing: high price and high production for three (almost four actually) years. Supply and demand has no issues with that: it simply requires strong demand (see China, domestic consumption of oil exporters).
                What’s more puzzling is that the supply didn’t increase further as prices not only stayed high but trended higher. Strong demand explains why consumers were willing to keep paying but, without getting into minutiae, I think only supply cuts and/or depletion can account for the flat supply considering that this didn’t come after an investment-destroying slump but after years of fairly high prices compared with the late 90s. Producers sure spent a lot of money bringing oil on the market as evidenced by the prices of oil production gear and such.
                Bird migrations don’t keep suppliers from profitting from such prices… and neither does violence in Iraq or geopolitical uncertainties. A trader might go long because of a foreboding headline (although they seem to pay more attention to inventory reports and financial markets) but when such prices persist over the medium-term… why would producers not indulge? You can make a case for relative Saudi restraint but that leaves you with the rest of the world struggling with depletion.

                If you don’t want grief, try to tone down your headlines! It’s wacky enough to have been noticed by the oil drum. I guess that’s where the two other posters have come from. Most seem to find the headline or the content amusing (“I will consider it Real Progress when they finally call us ‘Hemorrhoids’!”) but it seems not everyone is in such a good mood (see “too stupid” above).

                1. It is YOU that I don’t understand
                  The chart says the figure for 2004 was 72.51. The first year it passed 73 was ’05. The fact the price was low in 1999 only supports my argument.

                  Did China’s demand increase significantly enough between 2003 and 2007 to account for the phenomenon? Doubtful.

                  Our headlines used to be far more outrageous. We have toned them down considerably. But provocation attracts readers. What we object to is mere provocation as a substitute for rigor. We are rigorous enough to have earned our right to a little sensationalism.

                  1. yeah, yeah… I know that
                    I told you above to check the monthly data. I don’t know why the coarser data should be preferable in any way.
                    That the price was so low in 1999 supports which argument? Not the one about Iraq or geopolitics in general surely. The first price spike ended in 2000, and before the election too (around the time of the natgas shortage and the California blackouts if I remember it right). Maybe I’m forgetting something about the geopolitics of the time…

                    Now, as to the demand: I specifically alluded to a major trend that’s not China and of course it doesn’t stop there.
                    But, in theory, the demand from China could be sufficient. Unless you actually have a clue about the elasticity (technical term) of the demand, you can’t really guess at how much more demand is needed to move the price. Well, you can sort of guess Guatemala ain’t going to explain much.
                    It’s worth noting that there’s a time dimension to elasticity: it’s generally likely to be low in the short-term considering the kind of uses people have for oil but long-term price moves are going to trigger changes in efficiency, in the way people use oil, in where they live even (and so on).
                    Then, you’ve got to factor in the value of the dollar. It only explains a fraction of some of the price moves but it’s not insignificant. Then you’ve got strategic reserves, inventories, market manipulation, speculation, the “fear premium” and all the other short-term noises. Lots of stuff goes into the price, much of which is beyond me and some of which is probably impossible to pin down actually. I am certainly not arguing that it boils down to a single thing.

                    I don’t think doing the Rorschach thing with short-term market noise is very rigourous. Doing it many times over doesn’t make it any more rigourous unless you got about it with testable hypotheses and a halfway rigourous protocol. Rigour is such a bore.

                    1. You are like an obfuscation-spewing robot
                      The 1999-2000 spike was small potatoes compared to what we’ve witnessed in the past five years (a rise from $10 to $30 per barrel as opposed to a rise from $20 to $120), and it was sparked by Clinton’s Iraq bombing spree. In case you forgot, Raw Story (July 5, 2005) reminds us: “In the first three months of 1999, U.S. led-forces bombarded Iraq with 241,000 pounds of bombs… By August of 1999, American and British pilots had fired more than 1,100 missiles against 359 targets, that year alone.” Bush actually de-escalated the bombing raids on Iraq when he took office, and the price came down.

                      The price drop did coincide with the worst of the California blackouts, but that was in the spring of 2001. Look it up.

                      I’m not arguing that “it all comes down to one thing,” but dismissing market reaction to war moves is an absurdity.

                    2. just explain the mechanism
                      Ominous headline. Price moves. I get that. That’s short term noise.

                      Now how does it affect the price without affecting the supply and/or inventories? You only need to provide a logical explanation to be a step ahead of the bird migration hypohesis.

                    3. You get it or you don’t?
                      The fear of disruption of supply and destruction of inventories, such as happened massively in 1991. It’s no coincidence that the market has been much more sensitive to war moves since then. Your first line indicates that you do get it.

                      You can direct any further questions to Jospeh Stiglitz. He was quoted in the Council on Foreign Relations Forum March 18:

                      “We believe, and I believe experts will agree, that the war is one of the factors contributing to the increase in the price of oil,” says Stiglitz. “And the increase in the price of oil is one of the factors contributing to the weakening of the economy.”

                      He wrote in the Washington Post on March 9:

                      This war has been particularly hard on the economy because it led to a spike in oil prices. Before the 2003 invasion, oil cost less than $25 a barrel, and futures markets expected it to remain around there. (Yes, China and India were growing by leaps and bounds, but cheap supplies from the Middle East were expected to meet their demands.) The war changed that equation, and oil prices recently topped $100 per barrel.

                      And in The Guardian on April 8:

                      The Iraq war—and the soaring oil prices accompanying it—has depressed the economy. Money spent on oil or on Nepalese contractors in Iraq is money that isn’t being spent at home; these dollars don’t provide much stimulation for the economy.

                      I’m sure you can reach him at Columbia University. Perhaps he can provide you with a sufficiently detailed explanation of the “mechanism.” But I consider the fact that the phenomenon exists beyond dispute. And I consider this tiresome thread to be over.

                    4. Stiglitz is disingenuous or clueless…
                      … as evidenced by his comment about futures. I won’t get into this because the thread is over.

                      The main reason I’m posting yet another comment is that even I can see that my previous comment is quasi-unintelligible: I meant to contrast short-term price noise with long-term price trends but I must have dropped a word or two in my haste to finish typing the comment. So I get it and I don’t.

                    5. quasi-unintelligible is usual
                      The only part I’m not sure about is the “quasi.”

                      Where’s your Nobel prize in economics, Anonymous Coward? Forgive me if I place greater faith in Stiglitz than your obsessive (if carelessly worded) sophistries. The difference between “noise” and “trends” is a case in point: it is purely subjective, and a disingenuous way of dismissing my obvious “mechanism.”

                    6. you don’t understand the oil market
                      This distinction (which is not a mere distinction between noise and trends but I don’t want to get technical) is built in the concrete institutional arrangements that follow from the nature of the commodity and of the system.

                      The Bank of Sweden (or whatever it’s called) prize has been awarded to people who have been phenomenally wrong.

                      I would suggest you cease from replying if you want to keep this thread closed. But if you actually get off on taunts, fire away…

                    7. Last-wordism strikes again
                      But we both seem to suffer from it.

                      You’ve yet to explain how Stiglitz is wrong, or whether you believe the close correlation between Middle East instability and the oil price is mere coincidence. Having a Nobel prize doesn’t automatically make him right, of course. But I’m curious what your credentials are. A doctorate in economics, perhaps?

                      “you don’t understand the oil market” is also a taunt, and an empty one when you say nothing to back it up.

                    8. so do we reopen the thread?
                      I did not elaborate because:
                      a)you wanted to close the thread and I respect that
                      b)I didn’t want to waste my time writing stuff you were unlikely to consider carefully

                      Give me the green light and I’ll spew forth many more paragraphs of obfuscation. But please give them a fair chance before dismissing them if do you request them.

                      I have no credentials in economics (only economic history and even those are lacklustre to say the least). Economists have shown time and again that they are liable to totally misread real-life markets though. In this case, I believe Stiglitz is demonstrably wrong (without recourse to ad hominem, argument from authority and such).
                      For what’s that’s worth, I do not trust my own understanding very far. I like to think I have a handle on the basics but I have been humbled by how wrong I have been on the FX market for instance so I’m not even confident about that.
                      The little I have learned about markets made me very skeptical of anyone’s claimed ability to intuit relationships by chart-gazing and such.

                      Finally, you have yet to show there is any correlation between ME instability and the price of oil. I don’t doubt there is one (however weak) but actually demonstrating it would require quantitative data and therefore unambiguous definitions and weightings.
                      Recall that I didn’t dismiss any relationship (yet another strawman): my hypothesis is that any significant long-term correlation would be mediated by supply and inventories. The corrolary is that one could work with the supply and inventories and ignore geopolitics in order to explain past pricing trends.
                      Because there is no future supply and inventory data, I think geopolitics is relevant for forecasting… which is people pay attention to the headlines. It doesn’t follow that interpreting headlines without regard for the quantitative implications for supply and inventories makes any sense however.

                      I ended up spewing a little wall of text without even getting into the heart of the matter. Oh well.

                    9. Too much
                      I have documented over and over a pattern of market reactions to Middle East instability going back to 1956. This website has been following the phenomenon intimately since its inception in the aftermath of 9-11. Once again: follow the links back and read for yourself. If you don’t “dismiss any relationship,” what on earth is the point of this intellectual masturbation?

                    10. but how strong is the relationship? that’s the point
                      Allow me to quote myself: “It doesn’t follow that interpreting headlines without regard for the quantitative implications for supply and inventories makes any sense however.”
                      You didn’t try to estimate what the impact of the events you chronicled would have (and verfied those estimates after the fact) or had (and made sure there’s evidence to support those estimates) on supply and inventories.
                      What you did was tacking on ad hoc explanations to arbitrary price movements. There’s a reason people are told not to do that: you can support pretty much any hypothesis you want with such a methodology.

                      This led Vinograd to make preposterous assertions about the insurgency in Iraq (see above) for instance. Specifically, the enormous inventories (or supply cuts) implied by his argument are missing.
                      Alternatively, if want to take Stiglitz’s futures argument seriously, then Vinograd should have been looking at long-dated futures, not at the front month… and he would not have found any evidence for the “great fear” there. Do you have “faith” in Stiglitz or not?
                      Again, I can try to explain futures, inventories and so on if you really want me too but it’d be longish and I don’t want to waste my time. Do tell.

                    11. No point
                      I’ve already given you every opportunity to end this tiresome thread, but you insist on having the last word. (Of course the malady is mutual.) If I had any faith at all that you would make sense, I would invite you to go ahead. But, based on your consistent performance, I have none. I am vaguely curious what “preposterous assertions” you believe Vinograd has made about the Iraqi insurgents. And if “you can support pretty much any hypothesis you want” by “tacking on ad hoc explanations to arbitrary price movements” (a sophistry that assumes the price movements are arbitrary), I greatly look forward to your case that oil prices are tied to bird migrations. I made this challenge before. This should be interesting.

                    12. OK, I give up
                      You ask me a question and in order to give me an opportunity to close the thread?

                      I tried to give you the benefit of the doubt. At this point, I can only explain your attitude by bad faith or total cluelessness, most likely both. And since you’re not willing to improve on that…

                      For the record:

                      The preposterous assertion is of course that the insurgency drives the price of oil through an occult mechanism that leaves not a shred of evidence for examination.
                      Maybe that’s not what he meant. Maybe he meant that it’s correlated with but not causing the “great fear”… what does it matter? Replace “insurgency” with whatever he’s trying to say and that’s not likely to make it any less preposterous.

                      Arbitrary (as picking and choosing upthread) refers to the charlatan not sticking to any kind of methodology when he chooses data points. To describe meaningless price moves, I’d have used “noise” or some such.

                    13. I bet.
                      I’m sure Joseph Stiglitz will appreciate being called an occultist. Acknowledging the role of psychology in the market (which you yourself concede, while cynically dismissing it as “noise”) is fairly universal among secular rationalists, I’m afraid. I knew you would cave on the bird migration challenge.

                    14. no sense
                      In an effort to get the last word …
                      Hey anonymous coward: While I admire your work on slashdot you haven’t been making any sense in this thread. My advice is, if you care, is to go over your argument and sum it up in way less than 100 words.


                      “You do not really understand something unless you can explain it to your grandmother.”

                      – Albert Einstein

                    15. what argument?
                      I’ve mostly been replying to Bill and trying to get him to give a second look to the issue and the data. I don’t think he’s interested in hearing any argument.
                      I thought he had some evidentiary standards but I should have known better and I shouldn’t have let myself get bogged down in these never-ending distractions. In retrospect, the less said about the report’s faith-based commentary on price of oil, the better.

                      Here’s the take home message, in very few words:
                      Peak oil is not about price or reserves but about flow rate.

                      I said as much in my first post but I doubt it can be made any clearer so, if you don’t understand that, too bad. Journalists have been doing their best to fail to understand that simple and basic point for so long that I have no doubt you’d be in good company.

                      Any reader genuinely interested in any of this should be able to google this stuff and should have no difficulty finding clearer prose than mine somewhere out there. Most of my views on this topic are fairly widely held (though not in all circles of course).