and link to crosspost on dKos: http://www.dailykos.com/story/2006/9/4/81822/48748

In the long run, we're all dead. John Maynard Keynes

It will be shortages that matter. People just adjust their lifestyle gradually as fuel prices go up.

Of course the poor will be impacted hardest first, probably starting this winter in the US & UK. But until the middle classes are hit hard nothing much will change.

keep to the Fen Causeway

I have always thought that if there is no Iran war, the transition will be smooth with some elasticity in the demand when oil reaches around 90$ (present dollars) per barrel and then some more elasticity at 100$ for the physchological effect. So the wars are more geopolitical than energetic (although the energy factor is very very important)

You may wonder why 90$?

Jerome.. check the level of gas consumption in Europe as a function of price and compare it with the US without taxes. US should have a similar transition in relative terms (percentages) oif oil consumption as Europe when gas prices increase and reach the actual European level..diminishing miles driven and better mileage of new cars will follow in the US...At 90$ we should have around 4-5 $ dollars a galon in the US which will have a similar stagantion in gas consumption for transport as the one that Europe has now (at least in Spain the last two years)...and US transport consumes around 15 million barrels per day..a ten percent reduction is 1.5 million barrels per day...(a 20% per cent reduction can be expected at 100$-120$ with 5$-6$ a galon) just enough to offset other increases in the world for the next couple of years and keep the price around 90$-110$.

My forecast
2006 below 90 $
2007 close to 90$ but still below
2008 reach 90$ close to 100$ (we could reach 100$ here)
2009-2010 oil around 100$
2011-2012 stable around 100$
2013-2017 ...ready for the complete energy transition in transport????

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

Do not forget the impact of eliminating SUV from the US middle-class (and highways)..much higher impact than diesel in Europe. It will not affect the demand of the poorer..they they do not have a SUV to start with.

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

Absent military conflict in the AG that shuts down a major supplier, I'm predicting we have about 75 countdown diaries before we hit $100 oil.  Guessing 2009ish based on 25/year on the diaries (and no cheating Jerome).

No one truly expects we'll find a way to produce 120 MMBD of crude oil.  Numbers in that range were bandied about in 1980 for roughly now.  The oilco answer was shale, coal liquifaction, biomass and other alternatives.  They were drilling like hell too but they gave us hundreds of millions to spend investigating alternatives.  Of course the real savior was price shock induced recession.

my gut says we have a recession in the USA next year.  If that triggers a recession in China, we could have an economic meltdown over there similar to the big pukeout in the early/mid 90's.  that will be brutal for the supply/demand balance on oil.  I also believe China will hit a wall pretty soon.  They've saturated the US and Western Europe with cheap goods and only put roughly 20% of their population to work in the modern world.  They're destroying their environment.  Can they really double their GDP/oil use again in the next 10 years?  Ditto India.  How long can we afford to buy their junk?  Or perhaps how long will they trade their goods for our junk paper promises?

At some point Bushco will give in to a partition of Iraq.  Oil production will rapidly rise thereafter as they will need the cash to put that place back together.  Instead of a strong member of OPEC, they'll be Nigeria.  Pedal to the metal on production.  There are plenty of Russians, Chinese and others who will rush in there to drill/repair.

Global warming may well shave demand off the winter heating peaks.  Look how hard natgas fell last year after a mild winter.  $15--->$6.  or in oil equivalent, $90-->$36.  That could ding oil this year if we've no hurricane screwing up production.  Stocks are highish.

Supply side is growing as well.  We're holding at 84 MMBD with Venz down 1 on labor strife, Nigeria down 1 on turmoil.  Iraq down 1-2 on war.  Saudis have a little spare.  

If the consumer gets lucky, we could have a +3-5 MMBD increase in supply and a -5 MMBD demand situation.  Oil will puke,  but not for a generation this time.  We'll have a 3-5 year respite.  

So that's the bear case.  probably equally slanted to your bull case.

Even if I'm wrong and none of the bear possibilities arise, at some price, and maybe $100 is what it will take, we'll cut US demand as govt requires 40 MPG as a fleetwide average.  That knocks off 5 MMBD of mogas demand in the USA.  Your windmills will free up natgas for other uses as well.  I just don't see the world in flames over oil.  Mainly because the war will dry up the oil while driving demand through the roof.  One Pakistani nuke on Ras Tanura and the war becomes an exercise in Bush logic.