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How OPEC's Prices Reduced World Addiction
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What was the Impact of these Prices (see next graph)
Although prices were lower in 1980, dollars were worth more back then, so the true cost was higher in 1980 than recently. Many alternative fuels are profitable at $50/barrel, but no one will build a plant because the oil price might go back down to $25/barrel for 15 years like it did in the 1990's. (Actually some plants are getting built, but not many.)
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The Two Peaks Match the Two Price Jumps
If there were peak-oil crisis, it would be because of too little Oil-per-Person. That peak occured 38 years ago in 1979 and we're still surviving. In fact we're much richer on average. Obviously, if oil-per-person dropped too fast, that would be a problem, but slower change is easily accomodated.
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The 1970-80 Oil-Price Spike Saved 10 Trillion Gallons of Oil
And, it's still saving about a trillion gallons a year! How did it do that? High prices make a lasting impression. Cars, refrigerators, light bulb, windows and homes all get redesigned. It takes a long time to replace them, so there is very little impact the first year, but over thirty years, the impact is astounding.
(The straight line is the path the world was on before OPEC, and the bumpy line is the path the world took after it saw high oil prices.)
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http://zfacts.com/p/847.html | 01/18/12 07:17 GMT
Modified: Sun, 01 Feb 2009 23:03:03 GMT
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