2010-11-27, 05:39 PM
Actually the reduction in demand for oil was more due to recessions and the aftermath of the oil supply shock. Rarely does the demand for oil ever die down. But as we saw a few years ago when oil surged past $150 a barrel, and in the mid 1970's, there are few times when the public curbs its demand for oil for a half year period at least.
There really haven't been many energy saving technologies implemented in the past half century. if you browse through resource economics data, you will see that the technology to make cars incredibly efficient (such as 15 mpg trucks becoming 31 mpg trucks) has actually existed for a long time. But the cost, or to be more specific, the initial outlay has always been considered too high and as such considered a low adoption product. Irregardless, if you look at how mpg has grown, it is a very disgusting picture. It reflects the stubborn mentality this country has had that we have limitless resources. It's only been recent that all the major economies admitted we don't run on limitless everything.
If you read your post again, you will catch something interesting. You said that reductions in demand from new energy-saving tech led to a decline in price after 1980. However if that were the case, why has price overall gone up in the past 10 years, when the emergence of hybrid/electric vehicles has even tripled mpg? One could argue that the rate of growth of developing countries far exceeds the rate of saving from gas, so in the big picture new tech barely dents demand, but what if those developing countries are removed from the equation? There are enough hybrid vehicles in the market, and the cash for clunkers program was a wonderful success in getting rid of many low mpg vehicles.
I think it's more to do with an unexpected result: with the savings from higher mpg, people are driving more. The expectation that drivers would drive the same amount with the same amount of gas but for higher mpg was not realistic.
Kind of like how technology for crop yields has truly taken off, but still demand has not wavered. Why? The expectation is people will eat the same amount and not more now that there is more yield.
But I've reached the limit of this subject. Need more data to keep going.
There really haven't been many energy saving technologies implemented in the past half century. if you browse through resource economics data, you will see that the technology to make cars incredibly efficient (such as 15 mpg trucks becoming 31 mpg trucks) has actually existed for a long time. But the cost, or to be more specific, the initial outlay has always been considered too high and as such considered a low adoption product. Irregardless, if you look at how mpg has grown, it is a very disgusting picture. It reflects the stubborn mentality this country has had that we have limitless resources. It's only been recent that all the major economies admitted we don't run on limitless everything.
If you read your post again, you will catch something interesting. You said that reductions in demand from new energy-saving tech led to a decline in price after 1980. However if that were the case, why has price overall gone up in the past 10 years, when the emergence of hybrid/electric vehicles has even tripled mpg? One could argue that the rate of growth of developing countries far exceeds the rate of saving from gas, so in the big picture new tech barely dents demand, but what if those developing countries are removed from the equation? There are enough hybrid vehicles in the market, and the cash for clunkers program was a wonderful success in getting rid of many low mpg vehicles.
I think it's more to do with an unexpected result: with the savings from higher mpg, people are driving more. The expectation that drivers would drive the same amount with the same amount of gas but for higher mpg was not realistic.
Kind of like how technology for crop yields has truly taken off, but still demand has not wavered. Why? The expectation is people will eat the same amount and not more now that there is more yield.
But I've reached the limit of this subject. Need more data to keep going.