it is obvious that it's not having an effect on prices
and
it is not obvious that it's having an effect on prices
are not the same. I wrote the second, you claim I wrote the first. Nice attempt at putting the burden of proof on me. In the long run, we're all dead. John Maynard Keynes
Here's another interesting graph showing the lack of elasticity of oil demand (not sure what the 3 lines goign through it are, though):
In the long run, we're all dead. John Maynard Keynes
But production = consumption.
While we have data on "production capacity" and so can look at the supply "slack" (or lack thereof, at present) there's no equivalent data for "demand". When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
So far the practical price of energy has hardly changed at all. When gasoline costs $25 a gallon there will obviously be a reduction in demand.
For example, suppose I own a gigantic SUV. If I sell it I'll get enough money to cover about 1/3 the price of a new hybrid (or 1/2 the price of a new conventional compact car), but with a new car I will have to pay a big registration tax and will have to have collision insurance coverage. The savings in fuel cost simply don't cover the extra cost of having a new car.
Plus, my SUV can carry more stuff and go off the road and is more intimidating on the highway and is preceived as being safer. The argument simply doesn't work out when the cost of fuel only doubles.
