Tuesday, June 28, 2005

two decade bull run

Shell predicts two decades of rising energy prices
Worldwide energy prices are set to rise over the next two decades as individual countries become more concerned about ensuring security of supply and governments take a more pro-active role in dictating energy policy and regulating markets, according to the latest global outlook from the oil giant Shell.

Not that I am one to seriously argue the contrary. However, there is a whiff of unreality to any scenario that doesn't take into account demand destruction. I don't think energy will go up infinitely, it will hit a cap at some point, reflecting the true cost of the most feasible renewables.

Or, I'm just whistling in the dark...

2 Comments:

At 7:59 PM, June 28, 2005, Anonymous T.R. Elliott said...

Here's a different way to think of the long-term price of energy. It will become more difficult for the average person to pay for it. Either the price goes up, or the price stabilizes or even drops as demand destruction sets in. But at that point, demand destruction means lost jobs which implies the average Joe has more difficulty paying for energy and the products derived from it.

 
At 9:17 PM, June 28, 2005, Blogger Big Gav said...

Hmmm - its an interesting idea.

I imagine every hydrocarbon resource with a positive EROEI will continue to rise in price (even with the odd dip) as they are depleted. It seems oil is superior to most alternatives, so it will always command a premium - and eventually only the rich will be able to afford it.

The rising price causes the demand destruction - but the thirst for oil (or desire for heat) will always be there...

 

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