Saturday, August 24, 2013

Demand is not falling from voluntary effort, it is being destroyed. An important distinction.

The peaking of cheap oil has meant that societies that are heavily dependent on oil are unable to afford to grow as before. High oil prices affect transport, which affects all areas of developed economies. The U.S. and Europe are now at the end of growth and oil demand is falling.

It would be nice if it were falling because we had seen the light and decided to implement free public transit and such to stop the waste. But unfortunately the demand is being destroyed in a most painful way--through unemployment and the stranding of people who can't afford to drive to work or move closer.

A few oil trolls have jumped on this falling demand to declare that peak oil has been obviated by peak demand. Not so. The fall in demand is exactly the pain of peak oil that has been predicted: price rationing. Those who have money, get oil.