13 Responses to Awesome Oil/Energy Infographic

3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D48 /% uncommon_cents says:

Theres a chicken and egg question here.

All these trends are because of high oil prices, and high oil prices are due to peak global exports. The number of available barrels on the world market has steadily declined since 2005, so every importing country in the world is bidding for a shrinking supply. The barrels simply didnt exist to keep oil consumption from shrinking.

This caused not just high prices but record high prices, higher than even the prices that caused 2 severe recessions in the 70s and early 80s. The end result of less available barrels was that we used less (go figure), and these charts reveal the primary ways we coped with having less barrels available.

Point being, changing behavior didnt cause shrinking demand. Shrinking supply caused changes in behavior through the price mechanism.

Global liquid fuel supply is UP, but global net exports are DOWN. This is partly due to the fact that large producers, like Saudi Arabia, are consuming more oil domestically while not producing more oil. The result? Less oil on the world market. Another reason is that planes, trains, and automobiles dont run on liquid fuel, they run on oil, and the global oil supply has been growing very slowly for a decade now. Most people are shocked to hear that even though the IEA expects U.S. production to rise 1 million barrels per day in 2015, it expects total OECD production (including U.S.) to decline.

In other words, were all focused on a rapid rise in production in one country, and ignoring the declining or stagnant production in almost every other country. Look at a chart of Alaskan oil production since 1980, and then a chart of North Dakota production since 2007. Im hoping for 2 more years of lower prices, but it may get a bit rocky after that.

3A%2F%2F1.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D48 /% Expat says:

3A%2F%2F0.gravatar.com%2Favatar%2Fad516503a11cd5ca435acc9bb6523536%3Fs%3D48 /% Blissex says:

GDP is a market-moving index and it is very cleverly managed. Higher GDP means higher stock prices, and higher stock prices seems to be the main goal of USA monetary and fiscal policy. How the management is done is disclosed in highly technical footnotes (that only insiders read), so it is technically not fraud.

Stiglitz noted in passing that:

«For example, while GDP is supposed to measure the value of output of goods and services, in one key sector – government – we typically have no way of doing it, so we often measure the output simply by the inputs. If government spends more – even if inefficiently – output goes up. In the last 60 years, the share of government output in GDP has increased from 21.4 percent to 38.6 percent in the U.S. from 27.6 percent to 52.7 percent in France, from 34.2 percent to 47.6 percent in the United Kingdom, and from 30.4 percent to 44 percent in Germany. So what was a relatively minor problem has now become a major one.

Likewise, quality improvements – better cars rather than just more cars – account for much of the increase in GDP nowadays. But assessing quality improvements is difficult. Health care exemplifies this problem: Much of medicine is publicly provided, and much of the advances are in quality.»

And as to that someone discovered:

Plus several reclassification of growing items so that they count of final output and boost both absolute GDP and its growth rate.

Also, real indices of many quantities (and sometimes even GDP) are significantly inflated by discounting nominal indices with inflation measures like the official CPI which are also cleverly managed to make them smaller.