[extropy-chat] Debate on Peak Oil

[BillK]

On 4/29/05, "Hal Finney" <hal at finney.org> wrote:> 
> Let's suppose that gas goes up to $5/gallon, and average distance
> travelled for personal vehicles drops from 20000 to 15000 miles per year.
> An SUV gets maybe 15 mpg, so that is 1000 gallons or $5000 per year.
> Now you want to sell that SUV and replace it with a hybrid getting
> 30 mpg and selling for $25000.  You'll save $2500/year in gas costs.
> But the SUV is practically worthless in this environment and has little
> resale value.  That means it's going to take ten years to pay off your
> investment in the new car, with your savings on gas.  That's not a very
> attractive proposition.
> 
> Of course, it's also possible that Peak Oilers are wrong, gas won't go
> up to $5/gallon and that all those people buying SUVs are not idiots.
> Ultimately, car purchasers are responding to the price signals they
> receive by looking at gas prices.  This gets back to the point I have
> made before, that if the smart money thought oil was going to go through
> the roof in a few years, it would already be bid up.  Oil would already be
> high in anticipation of future shortages; gas prices would already be high
> for the same reason; and people would already have stopped buying SUVs.
> 
> It's the invisible hand at work.  The fact that this is not happening,
> that people are still buying low mileage vehicles, is not evidence
> of irrationality. Rather it is direct, visible evidence that Peak Oil
> predictions of high oil prices are simply wrong.
> 

Hmmm. Well, here in the UK the current gas price is around 0.86 UKP per litre.
Now for the technical bit.
UKP = 1.89 USD,  1 US gallon = 3.785 litres 
So the current UK gas price is about 0.86 x 3.785 x 1.89 = 6.152 USD per gallon.

$5/gallon is cheap! Send it over here!

Most of the gas price in the UK is tax, of course. But this price
level has made little difference to the public's love affair with the
automobile. It doesn't seem to matter what it costs or how many are
killed on the roads, we must have our cars.

The price will have to go a lot higher before it will have much
effect. We have toll charges in some city centres, some bridges, some
roads, extortionate parking charges, speeding camera fines, parking
fines, innumerable traffic law infringement fines, insurance charges,
servicing and repair charges, depreciation, and so on. People will
complain, but they still pay up and keep their car.

It will need a change of mindset (or a good alternative) before car use reduces.

BillK