Pete,

I'm with you on the cars -- I don't understand the rationality behind a 4wd (unless you are 4w driving) and I can see more bailouts of the car industry coming unless they change and do it rapidly.

You'd have to assume that the vast majority of Australians have not heard of Peak Oil either.

Assuming there is some led time then people will eventually be forced into buying cheaper to run cars; I went from a 4.2L v8 (complete with worked heads, cam shaft and 4 barrel carby) to a Subaru and cut my fuel bill in half.

Having said that my four cylinder starts to look uneconomical at $1.40 a litre.

Hi Charger & plantagenet,

Oil is not existentially "our way of life". Technology depends on it *now*, but that's a temporary and treatable condition. Why shouldn't people rely on a useful resource at the peak of its production? What matters is that the world manages to reduce demand gradually as the supply decreases.

Australia has enough low-hanging fruit that I'm confident we can do so cheaply and quickly.

Short-term price elasticity of petrol demand is poor. But demand for aviation responds rapidly to changes in price, while longer-term purchasing and planning decisions (bus routes, vehicles, railways vs motorways) make automotive fuel price elasticity much greater in the long run than the pessimistic view indicated by short-term studies.

Of course there is a lot of uncertainty here. Hirsch's scenarios are likely close to being correct; the real cost of peak oil mitigation could be very high if supply were to begin a sustained decline before any move were made to address demand.

But it isn't true that no effort has yet been made. Countries such as Germany and Sweden are serious about reducing oil demand and greenhouse pollution, while China has committed to double the energy-efficiency of its economy, albeit without compromising growth. A couple of years ago Pakistan converted its vehicle fleet wholesale to gas fuel instead of liquids. Standard parts may make mass conversion of existing vehicles to electric or hybrid operation practical.

Big businesses from the petroleum industry itself (cf Tonye's "refinery gains" above) to retail to banking to the chemical industry have committed to dramatic improvements in energy efficiency and some even to "carbon neutrality". The R&D is mostly done, so the technological and legislative potential exists to turn our oil-dependence around, if not on sixpence then on tens of billions in change.

It's not yet too late. We aren't in Hirsch's optimistic 10-years-notice phase (unless unexpected supply-side discoveries push the peak further out) but we are also well ahead of his pessimistic no-action-until-peak scenario.

It will be a big job to make sure our governments play this game well. But it's not impossible.

G'day xoddam,
I look around at our leaders and I find it hard to maintain your confidence. I'm also not sure that we are well ahead of Hirsch's gloomier scenarios.
Australia peaked in 2000. We are now 7 years into decline. Using EIA data up to August 2007 global peak month for crude&condensate was May 2005. Global peak month for all liquids was July 2006.
What has happened in Oz the past 7yrs? Our oil consumption has increased each and every year. Our CO2 emmissions have increased each and every year. Our population has increased each and every year.
New vehicle purchases are setting records. In each case you can be sure that 2007 totals will exceed 2006 totals.
Despite the fuel switching in Pakistan its oil consumption is increasing. Pakistan has 8 times the population of Oz but only 40% of its oil consumption.
Biofuel plants in Oz are closing. Wind turbine manufacturers are packing up and going home. New coal fired power plants are being built.
When the mother-in-law comes up from Sydney she has to catch a train,then transfer to a bus and I have to drive 20 kms to the station where the bus terminates to pick her up. It is a 13hr trip.
Main reason is that the state railway gauges are different!
Best hopes for sanity.

Just a quickie for Bernie. Indeed, we have moved on in the past but that has always been with an increasingly energy-rich replacement: from wood to coal to whale oil to coal gas to petroleum. I guess the 'nexts' will be nuclear, GM plants for fuel and different modes of community operation. All well and good but it needs to be happening NOW. I accept PO and also that we will move through it but we can do it hard or easy. As it gets ignored or denied fixing it will just get harder and harder.

According to Maslow's hierarchy of human needs, our species - Homo sapiens - has needs which, in ascending order, move from physiological to safety to love/belonging to esteem to self-actualisation. The physiological needs are the most basic and essential in the short-term: breathing, food, water, sex, sleep, homeostasis, excretion. When I asked earlier what crisis had human society not been able to resolve satisfactorily in the past so that it would give pointers to how to prepare for the peak oil problem, I didn't receive ANY examples. So I'll do my own analysis.

If thanks to peak oil we find that oil production drops by 5% a year for each of the next few years, what will happen to human behaviour in order to meet our physiological needs?
* Breathing shouldn't be a problem
* Food - whatever oil is available will be diverted to the production of food which, because oil will be rapidly increasing in price, so food costs will rise up significantly.
* Water - we have plenty, even if it's salty, so the question is how do we remove the salt - maybe nuclear?
* Sex - I'll leave this one alone.
* Sleep - peak oil shouldn't have much impact here.
* Homeostasis - Wikipedia says this is: "the property of either an open system or a closed system, especially a living organism, which regulates its internal environment so as to maintain a stable, constant condition. Multiple dynamic equilibrium adjustments, regulation mechanisms, make homeostasis possible." - peak oil will see multiple dynamic adjustments made throughout the entire planet.
* Excretion - again, I'll leave this one alone.

See next post:

So, of all these physiological needs, food is the one I see most at risk of being impacted by peak oil. In the developed countries of the world, I have no doubt that we'll be able to buy our way out of trouble. We're already so rich, on average, that whatever fossil fuels are needed to produce and transport food to the populations of developed countries will be found.

So the question now becomes how will the 3 or 4 billion people of the developing world meet their fuel needs. Well, Kenyan farmers will stop producing coffee beans for export and start producing food. Brasilian sugarcane farmers will stop producing the raw material for ethanol and instead produce food. I also expect Argentinian and Madagascan farmers to stop producing cattle for meat and instead start producing plant-based foods that require less water and energy inputs. In other words, people in developing countries will divert their available resources to food production before all other needs, including material wealth.

So, overall, I agree that food production in the developing world will have several troubled years ahead but I'm also confident that the problems will be temporary and not lead to the catastrophes predicted by some.