" />
Building a world of
resilient communities.

MAIN LIST

 

Peak oil as a thermostat

Here’s a metaphor that may help in explaining why high oil prices are choking off economic growth for the U.S., and to a lesser extent the rest of the world as well. Think of the oil price as the mercury in a thermostat. As the economy heats up, the mercury expands (oil prices go up). This shuts off the furnace (the factors of production and consumption in the economy that make it grow). As the economy cools, demand for oil contracts and oil prices decline. But with oil now cheap, the factors of production kick in again; this causes oil prices to be bid up, and high prices once again choke off growth.

The metaphor has other dimensions to it. The hypothetical room in which our thermostat and furnace are operating exists within a larger environment, and the temperature of the room is affected by ambient surrounding heat. In summer months, the furnace never kicks in; during the winter, it is blazing much of the time. Think of surrounding seasonal temperature as a broad set of conditions impacting the economy from outside. In one rather obvious way, the ambient temperature of the environment in which the U.S. economy operates is rising: climate change is producing more freak storms, more droughts, and more floods. At the same time, the environment is becoming more polluted and species are disappearing. Minerals are depleting, while fresh water is becoming scarce. The season is changing; summer is at hand.

At the same time, the furnace itself is wearing out: factors of production and consumption within the U.S. economy are being held back by a glut of debt, an aging workforce, and declining average household income and wealth.

Under the circumstances, our furnace of economic dynamism sits idle most of the time, and creaks and leaks when it does get going. That’s the end of growth in a metaphoric nutshell.

Get The End of Growth http://www.postcarbon.org/eog
Watch the animation Who Killed Economic Growth? http://bit.ly/whokilledgrowth

Like this post?

>Keep the information flowing: Donate to Post Carbon Institute
Stay connected: Receive our monthly e-newsletter

Reposting: See our reposting policy

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Tags:  

The Debacle at Doha

Sunday, April 17th was the designated moment. The world’s leading oil …

Is Peak Oil Dead and What Does it Mean for Climate Change?   

This session seeks to bring together fossil fuel experts and climate experts …

Peak Oil Review: A Midweek Update - Apr 28

 A midweek update. Oil prices continued to climb this week, capped …

San Francisco Becomes First Major City to Require Solar Panels on New Buildings

San Francisco is one step closer to its goal of transitioning to 100 percent …

The Outlook for Electric Vehicles  

Electric vehicles are all the rage right now, and hopes are high that we …

We Could Be Witnessing the Death of the Fossil Fuel Industry—Will It Take the Rest of the Economy Down With It?

It’s not looking good for the global fossil fuel industry. Although …

Gov. Cuomo Rejects the Constitution Pipeline, Huge Win for the Anti-Fracking Movement

In a win for climate activists and the anti-fracking movement, and a blow to …