The Canadian Imagination

What it means to be Canadian; examining and reworking Canada as a nation.

Wednesday, September 14, 2005

Hubbert's peak?

So volatile is the current oil market, today two displayed prices at the same station at the same time showed a difference of 8%; and it was not because the employees had been changing it at the time. (Although most likely, they had been in the process of changing it earlier toward the lower end, and had been pulled away by a sudden influx in business before they could get to the other sign.) At any given time, the range of prices within a hundred kilometres shows a difference of 20%, and I have seen it as high as 30%. Prices now fluctuate not only day-to-day but also hour-to-hour: cellphones are active on the subject, light talk even on public transportation quickly shares who is "cheap" at any given time of day -- definition of "cheap" identical to what had been defined as "extremely expensive" only three weeks ago -- and even websites have been set up to try to monitor, although their updates simply cannot keep up.

Oil, energies generally, structural materials: unless government regulation already exists or the government directly intervenes to stabilise them, these are expected to reflect the mood of an uneasy public during disaster and threat of disaster. Still, uneasiness and temporary supply disruption by itself does not explain these prices, nor does OPEC (no current artificial restrictions on volume pumped), nor a limited number of refineries, nor the demand in China. All are elements, certainly: but the end result here includes something more than the sum of its parts. Where they have not already, electricity and coal are almost sure to follow the lead of oil. The relationship of price to supply/demand has somehow shifted, in a manner parallel only to what is seen in essential life-required products, such as food at its raw agricultural stage. Somehow, we have managed to redefine the energy market as no longer a luxury or an option, but another basic life need: but unlike food, energy has no upper "satiation" limit ... but might possibly run up against a different peak.

It was only a matter of time.

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