Fun Predictions for 2007-2012
I thought it might be "fun" for everyone to post their predictions for the rest of this year and beyond. Housing, credit bubble, stock market, whatever you like.
Here are mine:
2007:
US Recession by June 2007 (originally made this in May 2006)
First YOY median housing price decline since Great Depression
House prices return to 2003 levels in some bubble markets
Stock Market crash in lending/mortgage/finance sector by 35%
Overall correction in stock market 20%+
Oil: $78/b
Gold: $700
DEC 2008:
Housing ATM 100% gone, consumer dries up along with corporate profits
Worst Recession since 1970's Stagflation announced
House prices in bubble markets return to 2002 levels
Bear market continues in stocks, DOW now 10,000
Gold: $1000oz Silver: $ 25oz
Oil: $100/b
Unemployment rate: 7.5%
DEC 2009:
Housing Crash is now the worst since the Great Depression (GD)
Housing Permits and Starts are lowest point since GD
House prices return to 1999/2000 levels in most bubble markets
Bear market continues in stocks, DOW now 8,500
Gold: $1400 oz
Oil: $135/b
Unemployment rate: 10%
RCG Closes down and Ardell is stocking her van down by the river with Top Ramen
2010:
Housing bottoms out finally but will be flat for 4-5 years
Housing prices are at 1997-1998 levels in bubble markets
Dow 7500
Gold: $3200oz
Oil: $150/b
Hoardes of Realtors and Mortgage Brokers now compete for minimum wage jobs
Unemployment rate: 15%
2012:
President Hillary finally declares that we are in a "Greater Depression"
Housing is so "2005", people are more interested in finding work and basic necessities, working their way back up Maslow's Hierarchy of needs pyramid.
Unemployment rate: 20%
Gold: $ 4800oz
Oil $200/b
OPEC declares that it peaked in oil production in 2007
Study finds that "Peak Oil" happened sometime between 2005-2007
...people finally start to wake up and realize that our nation and its wealth were a direct result of cheap, sweet crude oil and that the decline in our nation started after we peaked in oil in Dec 1970.
Al Gore's famous 2015 quote "I thought global warming was the greatest problem we faced. I was wrong. I knew about Peak Oil, but assumed like everyone else that some technological solution would come along and replace Crude Oil. My bad."
And Michael Moore Said "Looking back, I wish I hadn't been such a money hungry profiteer. Sure, we were having a crisis in health care, but I knew there just wasn't any money in discussing Peak Oil. It's depressing and nobody wants to go see a movie about a big die off."
Here are mine:
2007:
US Recession by June 2007 (originally made this in May 2006)
First YOY median housing price decline since Great Depression
House prices return to 2003 levels in some bubble markets
Stock Market crash in lending/mortgage/finance sector by 35%
Overall correction in stock market 20%+
Oil: $78/b
Gold: $700
DEC 2008:
Housing ATM 100% gone, consumer dries up along with corporate profits
Worst Recession since 1970's Stagflation announced
House prices in bubble markets return to 2002 levels
Bear market continues in stocks, DOW now 10,000
Gold: $1000oz Silver: $ 25oz
Oil: $100/b
Unemployment rate: 7.5%
DEC 2009:
Housing Crash is now the worst since the Great Depression (GD)
Housing Permits and Starts are lowest point since GD
House prices return to 1999/2000 levels in most bubble markets
Bear market continues in stocks, DOW now 8,500
Gold: $1400 oz
Oil: $135/b
Unemployment rate: 10%
RCG Closes down and Ardell is stocking her van down by the river with Top Ramen
2010:
Housing bottoms out finally but will be flat for 4-5 years
Housing prices are at 1997-1998 levels in bubble markets
Dow 7500
Gold: $3200oz
Oil: $150/b
Hoardes of Realtors and Mortgage Brokers now compete for minimum wage jobs
Unemployment rate: 15%
2012:
President Hillary finally declares that we are in a "Greater Depression"
Housing is so "2005", people are more interested in finding work and basic necessities, working their way back up Maslow's Hierarchy of needs pyramid.
Unemployment rate: 20%
Gold: $ 4800oz
Oil $200/b
OPEC declares that it peaked in oil production in 2007
Study finds that "Peak Oil" happened sometime between 2005-2007
...people finally start to wake up and realize that our nation and its wealth were a direct result of cheap, sweet crude oil and that the decline in our nation started after we peaked in oil in Dec 1970.
Al Gore's famous 2015 quote "I thought global warming was the greatest problem we faced. I was wrong. I knew about Peak Oil, but assumed like everyone else that some technological solution would come along and replace Crude Oil. My bad."
And Michael Moore Said "Looking back, I wish I hadn't been such a money hungry profiteer. Sure, we were having a crisis in health care, but I knew there just wasn't any money in discussing Peak Oil. It's depressing and nobody wants to go see a movie about a big die off."
Comments
I don't think we will see the unemployment rate rise into double digits.
I don't think gold will ever hit triple digits; in fact I think it will be closer to $400/oz than $1000/oz in 2010.
I think we will see a 20-40% decline in housing prices, adjusted for inflation.
We will see a number hedge funds and pension funds going belly-up with bad bets on MBS and other derivatives.
As a consequence, we will see lending become much stricter, liquidity for both consumers and businesses will dry up, causing deflation, in the Austrian sense, and liquid cash will be very valuable.
I think we will see a recession in late 2007 or 2008. It will be global, long and deep, but we will be in a recovery by 2010 at the latest.
I do not think Senator Clinton will become president and I don't think anyone will give a rat's ass about Micheal Moore in 2015.
2007
- Recession by December 2007
- 1st average MoM median price decline in Puget Sound at the end of 2007 (by .5%)
- Dow closes year at 11500
- gold closes year at $580 an ounce
- oil closes year at $58 a barrel
- mortgage rates for 30 year fixed at 7%
- Shanghai index ends year at 3000 (4230 now)
2008
- Boeing announces plans to scale back production due to cancellation of some orders by end of 2008
- major tech-firms announce that sales are declining and there is evidence upgrade cycle is slowing significantly by year-end
- recession continues throughout year, with each quarter showing negative GDP growth
- Seattle area real-estate prices drop 5% YoY by December
- total number of foreclosure are up 200% YoY
- Dow closes year at 10000
- gold closes year at $490 an ounce
- oil closes year at $50 a barrel
- mortgage rates for 30 year fixed at 6.2%
- Shanghai index ends year at 1500
2009
- Boeing announces lay-offs as orders continue to be cancelled
- major tech-firms announce hiring freezes and/or lay-offs
- recession continues throughout year, with each quarter showing negative GDP growth
- Seattle area real-estate prices drop 15% YoY by December
- total number of foreclosure are up 400% YoY
- Dow closes year at 8500
- gold closes year at $400 an ounce
- oil closes year at $47 a barrel
- mortgage rates for 30 year fixed at 5.8% (with 20% down and 750 credit score)
- Shanghai index ends year at 800
2010
- lay-offs occur at all major Puget Sound employers
- Washington unemployment rate hits 11%
- Seattle area real-estate prices drop 25% YoY by December
- total number of foreclosure are up 800% YoY
- Dow closes year at 6000
- gold closes year at $320 an ounce
- oil closes year at $35 a barrel
- mortgage rates for 30 year fixed at 5% (with 20% down and 800 credit score)
- Shanghai index ends year at 150
2016
- first year of economic growth for US since 2007
- Washington unemployment rate hits 25% (up from 28% the year before)
- Seattle area real-estate prices rise 3% YoY by December (but down 85% from December 2007)
- total number of foreclosure are down 10% YoY (down 700% from 2010)
- Dow closes year at 2500
- gold closes year at $400 an ounce
- oil closes year at $25 a barrel
- mortgage rates for 30 year fixed at 4.2% (with 20% down and 800 credit score)
- Shanghai index is still not even posted, ever since the riots of 2011 that destroyed the exchange
Last I checked, money printing was in overdrive by every central bank on the planet. Now that they aren't backed by gold, the fiat currencies are only backed by confidence and the oil markets. Once peak oil screws up the oil markets, we'll find out how much money they printed and how shaky that confidence really is.
I hate to say so, but if you think we've had a housing bubble because of cheap credit, imagine how you'll feel once you find out that we've had a 50 year everything bubble because of cheap oil!!!!
Remember, $60/barrel is still 18 cents a pint, less than you pay for water. Remember synthetik's predictions when you look back on $4 gas as "the good old days". It's dirt cheap and not going to last.
This means that there is nothing to buy with all those dollars that (unless I'm wrong) nobody is burning up or recycling. This will make deflation next to impossible. Remember, Germany's Weimar inflation was because they had to print money to pay the war debts. The only difference with us will be that we're paying what we think of as peace debts (because we export our wars -- we don't hold them here).
WRT oil and PM's...jeeze...those are such murky markets that all I can say is "who knows?". If I were a gold bug (which I am not) I certainly wouldn't buy paper gold. Bullion only. Oil...well...I think that it will go higher because people will still need to get around and they certainly won't have money for new fangled cars.
Use of public transportation will increase and people won't be such snobs about taking a bus. People will learn how to walk places again or ride a bike.
sorry...just rambling.
great thread though.
On a more serious note, peak oil. This will radically alter our lifestyles, but I for one welcome it. Oil and the automobile has in many ways been the worst invention ever devised. Because of the automobile we have urban sprawl, asphalt everywhere, outsourcing, obesity, and it murders more Americans a year than any other non-natural (think cancer) source. Yes, there are benefits, but nobody ever really stops to think about the negative side effects.
So my prediction. Peak oil means smaller more concentrated cities become norm. Tower agriculture will catch on to feed these small cities. This will reduce the resources needed to feed, while making most areas self sufficient. People will ride a bike to work in the same small city they live in. Total economic activity will go down, and people will rely on their neighbors more. This means less Michael Bay movies, but more time to sit down and read a book.
In short, the world will change, some people will be better off, others worst off, but mostly we'll figure out how to make due with a more energy neutral world. In the end, people will be better off, and they will look back at the era between 1970 and 2020 as anomalous and foolish. They won't envy us.
That said, I'm definitely not a fan of the internal combustion engine or the gasoline monopoly (see some of my venting as H0NGK0NGPH00EY over at Slashdot). I ride my sweet electric-assist bicycle to work (and everywhere else) as often as possible, and when someone comes out with an all-electric car capable of freeway speeds and even a paltry 50-mile range for under $20,000 it will be the first ever brand-new car I buy.
So I'm not some sort of H3-driving, oil-junkie, I'm just not convinced that we're really going to reach peak oil any time soon, if ever.
In my view, the "peak oil" debate is irrelevant. If the major crude oil fields are about to go into decline then we will find ways to compensate through conservation (selling SUVs, living higher density, etc) or greater development of alternate energy sources (coal-to-oil conversion, nuclear, etc). And if peak oil turns out not to occur, then there is no problem either.
My main point is that I just don't buy the doom and gloom theory around major economic/societal destruction with peak oil.
Actually, I get the impression that many of the peak oil proponents have ulterior motives around the environment and the re-structuring of society/social order. I notice that many of the peak oil experts advocate massive government interventions and investments to save us from peak oil (I can't count the number of times I've heard that we need a government led "manhattan project"). Since when was government largesse the solution to our problems?
I say this as a devout bicycle commuter.
Since your Hummers top speed will be so slow you'll get lots of tailgaters in their 400HP SUVs that do 0-60 in less than 6 seconds. So I recommend stocking up on a bunch of D-cells that you can casually toss out your window to keep those pesky tailgaters back...ahhh...Battery Power!
I'm also fully in favor of your idea of saving gas by cutting down the trees. And while we're at it...roads are ridiculous...all that turn left and turn right BS. I mean...after all...isn't a straight line the most efficient way to get from point A to point B?
Pave the planet I say!
We aren't finding ANY new large sources of oil - haven't discovered any in years, even though the world as a whole has ramped up disovery efforts.
The essential problem is that the 6.4B people on the planet are eating oil. Without oil, we never would have reached more than 2B people. The only reason we can feed that many people is simply, oil. Period.
Petrochemicals are used in fertilizer and pesticide - and the reason we have wide scale agriculture.
If oil is replenishing somehow, why haven't we made any new discoveries? Why are all countries that we have data for in decline? Why is Saudi Arabia pumping massive amounts of salt water into the ground to get more oil?
At current consumption rates with the growth of Chindya, my understanding is that we need a new Saudi Arabia every 3 years.
Demand has or will outstrip supply VERY soon and I think that's why we've begun this endless cycle of resource wars.
There are countless books on the subject, find them on amazon or at any B&N - most are in the "nature" section (some are under economics). Read Kunstler's "The Long Emergency" for a primer.
Personally, I don't welcome Peak Oil. That means the beginning of the end of most of what we know. It ultimately means that we'll probably lose 2/3 of our population.
I've read up on all the alternatives - and once you do, you'll understand that all combined, they won't have much of an effect. Uranium and Coal are good short term solutions however those are finite as well. We've reached Peak Natural Gas in the US as well.
Maybe if we had started working on this problem in the 70's and began conservation efforts and efforts to control the population, something could have been done.
Still, I'm an optimistic person and will do whatever I can to make it through this difficult time. I am not scared or worried in the least. I'm not even "down" about it. Reality is reality, and you have to just do the best you can.
I totally understand the desire to continue to believe that a solution is at hand - that technology will save us.
I could put up a bunch of graphs and links, but all you need is below. I have several Peak Oil DVD documentaries and would be glad to mail you a copy if you PM me.
http://www.theoildrum.com
http://www.seattleoil.com
I'm not sure if it really matters where oil comes from. Imagine a giant differential equation. Black box (earth) produces oil at rate X, people and nature use up oil at rate Y. If X < Y, eventually the oil will be gone. Does Gold's theory speculate on the rate of oil production? It looked to me like it focuses on how, not how fast.
Just my 2 cents.
I am just not so sure about this. There are plenty of other energy sources, many of which are marginal solely due to political issues (e.g. nuclear, hydro, etc). It's almost impossible to even get permission to setup a new farm of wind turbines! And let's not forget that silly regulations are among the primary culprits for keeping fuel prices as high as they are today. Why do we need patch-work regulations requiring different gasoline formulations throughout the US? Why is it so hard to get approval for building new refineries or LNG terminals?
If oil really starts to become significantly more expensive ($120 a barrel, say) I suspect we will see much of the political opposition to alternative resources melt away. I also think that society is much quicker at adapting to market incentives than is generally realized. We'd be amazed at how quickly people change their behaviour if gas approached $10 a gallon. People would start abandoning distant suburbs very quickly, and businesses would become much more flexible in working tele-commuting options, etc.
I'm for some sort of solar panel that can be incorporated into homes in an aesthetically pleasing manner.
And whatever else we can muster up.
just please...no hillsides full of fans that barely spin.
I don't think this is correct. Even the peak oil theorists would agree that the process of converting fossils to crude oil is perpetual (as long as their is life on Earth anyway), which is constantly replenishing the supply. In the end, both theories are actually very similar in that they propose there is some sort of constant rate of crude oil production. They only differ in what the ultimate source of the resource is.
As far as new discoveries go, I think we can expect to see a significant wave of more production brought on line in the next 10 years. It has only been in the last 3 or so years that oil producers have been making seriously investments in new exploration, which they virtually ceased doing for the previous 20 years (due to a resource glut caused by the last major exploration phase).
Saudi Arabia alone is doing a trememdous amount of exploration today, and they did virtually NONE during the '80s and '90s.
Also, consider the demand side. If we have a good thumping global recession, oil consumption will decrease substantially. I really hold all those perpetual growth projections of developing nations with a high degree of skepticism. Any bets as to what will happen to Chinese auto sales when the Shanghai index drops 90% and exports to Europe and the US fall to a fraction of what they currently are? I suspect that many of the shiny new freeways popping up in China will be similar to the early German autobahn under the Nazis: beautiful engineering achievements that are only used by government officials and the military (i.e. because no one else can afford to drive).
A bunch of oil is discovered. At that point, production = 0.
A few wells are put in. Production = something.
A bunch of wells are started. Production = a lot.
Pumping on each of those wells is maximized. Production has peaked.
Some wells begin to produce less oil. Downward slope.
Very slowly, and over a long period of time the cost of pumping oil compared to the payout will increase to where it is no longer cost effective to pump the remaining oil in some wells.
Eventually all wells in the oilfield reach that point. At which point that field is done.
Translate this phenomenon to a grander scale, like a nation, a region, or the world and you get Peak Oil. If you want to learn more, Google Cantarell oilfield. It was one of the worlds largest, and it peaked only a year or two ago. Yes, we can find more oilfields to replace it, but they are unlikely to be as large.
Are you saying that Wikipedia's entry is an incorrect representation of the peak oil theory? (It does happen from time to time with a freely-editable encyclopedia, which is why I'm asking seriously.)
Daniel Brandt
And if we're willing to tear up millions of acres to get to it, we have a lot of coal within our borders that can be used to make clean fuel oils that will burn in diesel engines (Hitler did it in WWII, the technology has been around since the 1920s). Not a pretty picture from an environmental standpoint, but it beats freezing to death in the winter!
Not saying that we shouldn't seek out alternatives and/or conserve, but I get weary of all of the scare tactics used across the political spectrum, e.g. global warming (remember, just 30 years the 'experts' predicted global cooling), warror on terror, etc. The environmental movement seems to be an expert at 'the sky is falling' gig.
This is exactly right. Just look at the total world-wide capital investments being put into exploration from 1980 to 2003 and from 2004 to 2007. The amount of investment being made in the last few years dwarfs ANYTHING that happened in over 20 years prior. If the producers were so certain there weren't any more significant fields to find, why would they even be bothering with such a massive new investment program?
There is really only ONE explanation for why exploration investments have ballooned so much recently: the price of oil has increased to the point where it makes new investments attractive. In other words, the primary reason that oil production has been declining over the last 20 to 30 years is because the price of oil was too low to warrant any new investment.
Funny how the market system works, isn't it? 8)
That's a drop in the bucket. We've used more oil than we found globally in every year since 1985.
If oil is naturally replenishing, why are we only still producing 4.5 million barrels per day after dropping from 10+ million per day in the 70's? Do we like being energy dependent? Is it a conspiracy to get us into Iraqi wars because politicians get such big political capital from those adventures?
No, we aren't producing it because we can't, period. We can't produce it because the pressure drops when you take half the liquid out, and if it replenished the pressure would go right back up.
Right, and it is so expensive to have to drill in 4 mile deep water -- what incentive indeed? That's why we're going to eclipse supplies with the constantly growing global demand soon: can't pump what you aren't discovering.
People have been talking about nuclear power "too cheap to meter" since the 50's, but we're still using oil because it's the best we have. If the magic bullet is going to appear, it had better be here real soon. I'm not holding my breath.
But notice what happened here: it was so expensive they didn't drill it. They got the cheap stuff first. They easy to get stuff. The stuff that gives you 100 barrels of energy to one barrel invested. As the harder stuff is all that's left, it might take a barrel of energy to pump out only 5 barrels of energy, and when you get to 1:1 you may as well not bother. Plus gas is $25/gallon at some point, and then what?
Then think about all those massive new exploration investment dollars... and they STILL aren't making the discoveries to match what we're burning!!! See how that works? If it's there, why doesn't the big bucks find it? Could it be we happened on the big reservoirs first? The biggest ones were the easy ones to find and exploit? Yup, that's what happened.
It's also not just about smaller cities, it's about not having food. 6 billion can't live on wind power the same way we lived on oil. Things will get ugly: why do you think we're in iraq anyway?
Even if we do enter a recession the world will still be consuming as much if not more oil. Do you think that China and India are really going to slow down their pace of industrialization? Even if a global recession hits, people are still going to be driving. The first thing people are going to stop spending on are luxuries, aka plasma t.v's, house upgrades, clothes, etc. The last thing people are going to cut out will be driving to work.
Sure people may not be flying to Europe on some exotic vacation while in a recession, but that is a drop in the bucket compared to every day automotive use.
As to oil being perpetually created in nature, most of the oil we currently have was created millions of years ago, BEFORE the dinosaurs walked the planet. We are ripping it out of the Earth exponentially faster than it is being created.
Oil shale is prevalent but not economic right now. As prices rise new forms will become economical to process.
Prices will go up, but we likely won't run out of oil. Higher oil prices will also spur more investment in other energy sources. But it isn't really just the energy that is important. We need some way to quickly transfer high density energy into our vehicles.
The real danger is that oil production from other sources will not be enough to keep society from completely collapsing before our investments in alternative energy sources pays off.
I would put the real unemployment about 2X what he did.
Oil priced in USD will go up, but the worldwide price may go down as when the US consumer finally taps-out, the Chinese/Malaysian/Indian/Outer Slobonian producer will have no customer. Nobody making or transporting stuff will cause the demand for oil to plummet.
I am not saying that oil will stay at a permanently cheap price. I am only saying that a near term recession/depression will cause the demand for oil to dwindle. If you look at what happened in '98, the Asian Currency Crisis coupled with the implosion of the remnants of the USSR, caused there to be a dramatic reduction in demand from developing nations. That's why we were paying 78 cents for a gallon of gas.
Long term (who knows what that is) the price of oil will increase in real terms as we would be consuming it faster than it is replenished/discovered.
Homes will lose a breathtaking amount of "value." They will be priced according to diminishing incomes, rising unemployment, and higher inflation in other parts of the family budget. Homes in this environment will also fall into disrepair.
I am not kidding when I say that 80% discounts off the peak will not be newsworthy. NO, I am not off my meds.
Just reducing a home valued at 10X income to a more normal 3X income, with everything else being held constant, would chop almost 2/3 off the price. Bainbridge median income? $71K. Bainbridge median home price? $730K. Think about it.
Factor in job losses, income reductions, inflation in food and energy, higher taxes, civil unrest, possible war, Boomer downsizing, higher interest rates, borrower vetting, and 25-33% down payments, and you have the makings for a real problem.
I also don't think that HRC will ever be elected president. She is just too unelectable. The Dems have an absolutely made-to-order scenario for '08, and they are running 3 absolutely unelectable candidates. Ask yourself, how does a Dem get 270 electoral votes without NY? How does HRC beat Giuliani in NY? Right there is enough to dump HRC. The only major GOP candidate she could beat is McCain, and he will never get the nomination.
If a global recession/depression hits, India and China are going to be worried about survival. China will be in civil war, and India might not be that far behind.
The money to those countries will vanish overnight. You can bet your last dollar that the US and Europe will slap tariffs on Asian goods as unemployment cracks 10-15% Economists won't be running foreign policy or trade policy. Politicians will be.
Peak oil causing problems? Yes, but let's deal with what will kill us first.
The world economy today is pretty simple. People in poor, traditionally backwards countries have been infused with Western capital to sell stuff to Europe, North America, and the Antipodes. They make it - we buy it. Pretty simple.
If that stops, and we make our own stuff and go back to the traditional colonial model, all the progress that has taken place in the developing world gets stood on its head. Without an economic reason to build a road or buy a car, people will continue to ride bikes on dirt roads.
What do you do with 3 billion people that are suddenly out of a job?
China has 13 men for every 10 women, and a military that is in ascendency. They outnumber us 4:1, and they are much younger. They are a brainwave away from revolution over there.
That's why you spend lots of money on a first class navy that is armed with nuclear weapons.
This is clearly not 100% accurate, but it provides interesting information. They speculate Saudi Arabia peaked in 2006. From many reports I am hearing, that may be very accurate.
Absolutely not true. Oil shale is basically a mining operation. Tar sands use natural gas to steam-clean the tar from the sand. Both are never going to be saved by high prices because the energy input prices go up just as fast as the price of the final product.
This is because the problem is the ENERGY cost to make it, not the dollar cost. The dollar is just a marker. The real costs are what count.
Keep in mind, our economy doesn't just run on OIL, it has to be CHEAP oil. Expensive oil doesn't keep Disneyland or Ford or United Airlines or Norwegian Cruise Lines in business.
a) It could NEVER 'pay off' at the scale required to avoid collapse of the current western economic paradigm because it could never replace oil, and even if it could, it could never deliver infinite economic growth, which that paradigm absolutely demands.
b) WHAT INVESTMENT???? We spend 100 times more on just defending oil shipping lanes. I don't think any investments will pay off until we start making some.
There is no reason that natural gas has to be the energy input needed to process tar sands/bitumen. They could always throw up a series of nuclear plants to power the Alberta tar sands. There are also new processing techniques being implemented that burn the tar sands itself as the energy input that may supplant current methods.
But this is beside the point. There are plenty of other energy sources we can use that are barely being touched today. Coal to oil conversion, for example, is well understood. But curiously, there are hardly any of these processing plants anywhere but South Africa. The only real complaints are environmental, but I suspect that even those arguments will wither away if oil prices keep rising.
You're right, it doesn't need to be nat gas, but that's not the issue. The issue is the ratio of how much energy you put in versus how much you get out.
BTW, when is the last time you threw up a bunch of nuclear plants?
So you are claiming that we're energy dependent because holding wars in Iraq is easier than "trying" to produce all the abundant energy around us?
Either you must think the government is bullshitting us about the energy situation and they prefer the dependence, or you think that they are just so utterly incompetent that they just can't find the energy you know is there. I don't see how either one takes us to the far end of an "everything will be ok" logic chain. How does it work?
Right, because you have to get so freaking desperate before you go to such a poor energy strategy that nobody else has had to do it yet.
So that doesn't mean we'll still be rich and fat and happy when we have to go to that, too. It means we'll have ended the cheap energy party and are moving into the difficult hangover. Don't take the emergence of this stuff as a sign of relief, take it as a sign that we're getting desperate!!
The real complaints will be the energy cost to build it out. Sasol keeps running because it is already built out, but without the desperation, it never gets built. You're right though, we'll probably have that desperation here and the environmental complaints will absolutely be brushed aside.
Keep in mind that it is also a matter of scale. Sasol manages a measly 150,000 barrels a day. The U.S. would need 140 such plants to replace our oil dependence, and then we'd need to "throw up" those same nuclear plants to replace all the coal that we want to use for Coal-to-liquids, because right now we already use it to make electricity.
Not exactly. Some form of energy are more convenient than others, and therefore of higher value. Thus, using hydro or nuclear power to process tar sands may make sense, even if it take MORE energy input than what results from the processed bitumen.
As far as the problem of "throwing" up nuclear plants go, I believe the political obstacles to this will also whither away if oil prices rise sufficiently high.
The US is energy dependent today because foreign energy has been dirt cheap. There is no reason to develop the relatively more expensive alternate energy sources (e.g. bitumen, shale, coal-oil, wind, etc) when one can purchase crude oil for a pittance on the global market. Already the market price for crude makes coal-to-oil conversion profitable. The only problem is the political/environmental opposition and the concern of investors that the oil prices might not stay high.
That's actually quite fascinating: why would investors be skittish about making investments in oil production that aren't profitable unless oil is above $55 a barrel? It seems to me that the single biggest inhibitor to developing alternative energy resources is the fact that many investors still don't believe that oil prices will stay at a high-level for very long. If this view should change, however, then just watch how fast coal-to-oil plants start going up around the US.
In any event, my belief is that there is a ceiling on oil prices that will be pretty hard to break. Any time oil get's close to $80 a barrel, there will be massive investments in alternate energy resource production which suddenly looks profitable (e.g. coal-to-oil). This will keep a lid on oil prices from rising into the stratosphere. I repeat: the main reason alternative energy sources haven't been developed is because crude has been so damn cheap.
That said, I don't think it would be the end of civilization, or even our western economies, if oil were to rise to a plateau of $80 to $90 for 15 or 20 years. Sure, there would be some painful restructuring of things (e.g. denser cities, preferences for different cars, public transit, etc), but nothing earth-shattering.