AuthorTopic: Lawrence of Arabia  (Read 2431 times)

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Lawrence of Arabia
« on: March 15, 2012, 12:25:41 PM »
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John Vorwald

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Re: Lawrence of Arabia
« Reply #1 on: March 17, 2012, 07:14:47 AM »
You have some interesting points about the role of oil access and economic hardship to previous wars.   In the more recent past, one can try to assess potential leading indicators of extreme hardship.  The trend of global oil price / production, was discussed in Nature, "Climate policy: Oil's tipping point has passed", which requires a subscription, but highlights are discussed here

http://www.washington.edu/news/articles/commentary-in-nature-can-economy-bear-what-oil-prices-have-in-store

Also, in the near future, there is the potential closure of the Sunoco refinery in Philadelphia, as discussed in

http://www.fcnp.com/commentary/national/11290-the-peak-oil-crisis-east-coast-refineries-redux.html


In the price/production discussion, it is indicated that the price is increasing significantly for marginal increase in production, suggesting that producing the "next" barrel of oil is very expensive.  My guess that soon we will see reduced production at higher prices, i.e., the price / production curve will change from the current trend of going up significantly in price with slight increase in production (up and to the right), to a trend of increases of price with reduced production (up and to the left).  If you track these values monthly, I think that a change of up and to the left will be an earlier indicator of pending economic change. 

The closure of the refinery has the potential to reduce wholesale supply, with potential interruption of supply, of petroleum to a large geographic region, PA and western NY.  Things to note are: 1) It's actually happening (the risk is real), 2) the region is a light population density adjacent to a dense population, 3) the issue is with a previous petroleum distribution system not being cost effect in the new economy.

While I do think the "economic" change will happen in the near term, I'm not expecting catastrophic results.  Essentially, I do believe that people have the tendency to make choices for a better tomorrow and to cooperate.  These virtues will overcome the associated hardships. 

Finally, keep in mind that there is money to be made in the creation of emotions that drive decisions, either positive emotions (confidence) or negative (fear).  So, one has to be careful about taking any actions based on small amounts of information, such as discussed here, but rather look at the large general trends that are present in society.

 

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