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Oil Miracle

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Oil Miracle
Post by biochem   » Thu Feb 26, 2015 12:01 pm

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Just for the sake of discussion - let's say a miracle occurs and that a new ultra cheap renewable fuel stock was discovered tomorrow which can replace crude oil in existing refineries, chemical plants etc. What would the effect on the world be?

My guesses

USA:
Alaska - economy is highly dependent on oil and falls into a depression. Population drastically declines as oil workers seek jobs elsewhere.

Texas - economy depends a lot on oil but oil/gas extraction only accounts for about 12% of the economy, so the other 88% will keep it out of a depression, though it will be in recession in the short term. In the long term the boom in other economic areas enables recovery.

North Dakota and other shale state - everything falls back to "normal", the shale boom is too new to be considered normal

Canada: Similar to Texas and Alaska, depending on which part of Canada

Norway, Singapore, Netherlands, Scotland and other first world countries with a strong oil dependence in their economy: Similar to Texas

Russia: Putin gets even more aggressive militarily in an attempt to distract from the ongoing economic collapse

Saudi Arabia: The economy collapses and the country falls into civil war and turns into Afghanistan. The Saud family flees to Europe. The troubles at home keep the Saudis from funding terrorism elsewhere, but terrorism increases exponentially in Saudi Arabia.

Yemen, Oman, Brunei, Kazakhstan, Nigeria, Algeria, Lybia and most of the other oil dependent Islamic dictatorships: Similar to Saudi Arabia

Kuwait and UAE: Economy falls into a depression. They leverage their contacts with the west for economic aid and eventually build a capitalist economy.

Iran: The theocracy successfully clamps down hard to stifle unrest due to the economic slowdown. The theocracy runs out of money to buy nuclear stuff from North Korea.

Iraq: Oil price collapse blocks economic development. However, foreign fighters, ISIS and other Islamic radicals leave to fight in Mecca enabling the formation of a pseudo-stable government similar to those often seen in Africa/South America.

Venezuela: House of cards collapses and the country falls into civil war. The military takes over in a coup. Chavez's friends are executed and the country converts to a stereotypical South American military state.

Mexico: Enters a recession. The government changes hands and business as usual goes on.

Other oil dependent developing countries: similar to Venezuela or Mexico

Elsewhere in the first world: Economies boom as the price of oil based products drastically declines. Pulling the first world out of the recession at last.

Elsewhere in the third world: As the recession eases in the first world pent up demand for clothing and other products produces a mini-economic boom in outsourcing.

Islamic terrorists throughout the world: Their funding stops, inhibiting their ability to carry out attacks. Then civil war in Saudi Arabia draws them to join in fighting over Mecca.

Elsewhere in the Islamic world: Economic collapse and civil war in the oil dependent Islamic dictatorships results in defunding of Madrassas and other attempts to drive the Islamic world toward Wahhabism. Home grown Wahhabists leave to join in the fighting in Saudi Arabia to the great relief of the majority non-Wahabists.

North Korea: With the collapse of oil, most of their export market dries up as their customer's can't afford to buy anything. They fix their economy by the tradition of method of threatening South Korea, then agreeing to stop in exchange for western aid.
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Re: Oil Miracle
Post by Daryl   » Fri Feb 27, 2015 12:16 am

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Great topic & excellent breakdown of outcomes. Will need time to digest though. I'd add that the invention of a new battery technology that economically enabled energy storage at a greater density than liquid fuels would have a similar effect. Electric cars, trains, planes, trucks, ships etc, with the energy provided by a combination of solar and nuclear large plants
The Saudi Royal Family would revert several generations back to nomadic camel riders again.
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Re: Oil Miracle
Post by Zakharra   » Sat Feb 28, 2015 11:17 am

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It's not like oil would suddenly become totally useless. Oil has many other uses besides fuel, so it will be used for a long time even if we find a newer and better fuel source.
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Re: Oil Miracle
Post by anwi   » Sat Feb 28, 2015 4:27 pm

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What happens of course depends on the nature of that fantastic new energy source. Let's say it would be something like "cold fusion". Then, crude oil and natural gas would still be valuable ressources for a lot of other purposes. Cars, e.g., would still run with internal combustion engines. Moreover, that new technology needs to be introduced into the market, first. That'll take several years. That softens the impact of the reduced demand in oil.
As to the consequences: Oil-driven economies would take a hit, sure. And there will be overcompensation by growth in other regions, eventually.
But the outcomes in the Arabia would be much worse then outline above. Without long-term profits from oil, the current regimes would collapse and likely be replaced by a strictly Wahhabitic califate, which gobbles up the whole penninsula, Jordan, and parts of Syria and Iraq. There'd be an even chance of their first Major attack being on Israel vs. being on Iran, but attack they will. This'll put the torch to the whole region in a (likely nuclear) conflict. However, while the lunatics will mostly be preoccupied with killing each other, they will still blame "the West" for their situation. Consequently, the problems with terrorism for everyone else will likely increase...
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Re: Oil Miracle
Post by Annachie   » Wed Mar 11, 2015 9:07 pm

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I thought the topic was heading to GM bio fuels, lol.
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still not dead. :)
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Re: Oil Miracle
Post by biochem   » Thu Mar 12, 2015 1:05 pm

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Annachie wrote:I thought the topic was heading to GM bio fuels, lol.


I wish!!! In reality I think that we will get there someday. Right now GM of plants for biofuels is not very advanced. They're going to have to do a lot more work to get one that replaces crude oil. And even when all the scientific challenges are addressed there will be all of the concerns from the Greens; some legitimate, some hysteria but both types will need to be addressed. Looking at what science has accomplished in the last 50 years, I think that a crop based biofuel is possible in the next 50. If (and that if is the major stumbling block) enough resources are put into it.
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Re: Oil Miracle
Post by viciokie   » Thu Mar 12, 2015 6:10 pm

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It will be interesting in the 5 to 10 year future as Lockheed-Martin has anounced a "small" fusion reactor breakthrough that is stable and that is energy efficient. Also there are several battery prototypes being worked on by various places that are extremely more efficient.

What happens after those items are out may be very interesting to watch and see.
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Re: Oil Miracle
Post by Michael Everett   » Fri Mar 13, 2015 3:03 pm

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A while back, I came across a story where a new form of clean energy is discovered and marketed (and the problems that the mere existence of said energy brings).
It's a very long story and is a crossover of Harry Potter and the Dragonriders of Pern.
Despite that, it actually works!
Here are the links. Part 1, Part 2 and Part 3 (in progress).
Enjoy (at least until the Mad Wizard tempts us back with his next snippets).
~~~~~~

I can't write anywhere near as well as Weber
But I try nonetheless, And even do my own artwork.

(Now on Twitter)and mentioned by RFC!
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Re: Oil Miracle
Post by Tenshinai   » Fri Mar 13, 2015 11:27 pm

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Norway, Singapore, Netherlands, Scotland and other first world countries with a strong oil dependence in their economy: Similar to Texas


Norway has very little dependence on oil.
Go check just how much cash they are squirreling away in their oil fund for a rainy day.
Its current value is somewhere around 900 billion USD. And it´s the single largest shareholder in Europe.
Essentially, because of how relatively little of the oil money they actually use, they could maintain their current budgets for decades just by passively taking money from that reserve.

Norway has effectively allowed their oil business to create most of it´s economic benefits indirectly, through the extra jobs provided and the secondary economic effects generated, rather than the actual profits from selling the oil.

Very simplified, they have reserve funding enough to pay TWO years worth of national GDP.
Or pay their whole national budget for 5 years.
They could give every citizen in Norway 200000$.

And with Statoil being a publicly owned company(ie no need for shortterm demands of bankruptcy or profit when the business disappears "overnight"), even with oil disappearing as part of economy, if they´re smart(and they have been so far) they could crashmove as much as possible of this skill and experience over to other and new areas to mitigate impacts.


Netherlands still is the main point of imports into western Europe, it would feel the disappearance of the oil economy but probably not be severely affected for long.

The Saud family flees to Europe.


Why ever would they come here? They have little to no friends here. Those are in USA.

Yemen, Oman, Brunei, Kazakhstan, Nigeria, Algeria, Lybia and most of the other oil dependent Islamic dictatorships: Similar to Saudi Arabia


Brunei and Kazakhstan would probably get over it without any major disturbances.
And Nigeria would likely keep using the oil domestically, as it would likely be cheaper than reliably importing the new "wonderstuff", and actually chances are fair that the nation would actually have an outbreak of "sort of peace", because the biggest creator of trouble there now is oil, directly or indirectly.
Algeria would probably not go very chaotic either.

Texas - economy depends a lot on oil but oil/gas extraction only accounts for about 12% of the economy, so the other 88% will keep it out of a depression, though it will be in recession in the short term. In the long term the boom in other economic areas enables recovery.


It´s much worse than that unfortunately. Texan economy that relies on secondary effects from the oil industry is massively larger than that. And since you only mention extraction, don´t forget refining.
Texas is one of the places that would risk being as badly affected as places like Saudi Arabia. The Saudis have massive amount of central control that can mitigate the crash even if their basic economy has a much worse base in reality than Texas has.

But face it, direct and indirect effects of the oil and gas industry in Texas is on a ridiculous scale, and i really don´t think you realise just how much of the "fat cats" that would disappear from the place within a year of your new "wonderstuff" taking over.
Most likely, Texas would face a runoff of capital and people that would make the great depression look like a minor hiccup.

The local and state governments just doesn´t have anything to say in the matter, they have near zero influence to do anything, and >90% of the people that have the cash to do anything at all to mitigate the consequences, are hardcore "profit first" capitalists, they just don´t have any interest in doing anything that doesn´t earn them more cash. And the minority that does, wont be enough when the profithunters leave.

And while Texas isn´t completely without other assets, it has no easy economies to switch to, and noone to pay for such a switch.

Remember how badly Texas was hit in the 80s just by falling oil prices, something that may be about to happen again BTW. A complete loss of ALL that economy would be severely felt.

The only part of the Texas industry that would have any chance of really taking over as a major force in the economy is the high tech industry, aaand the problem with that is there´s near zero ability for the oil industry and service industry layoffs to migrate to it, and Texas higher education is one of its weak points, meaning that hiring locally will be just as difficult as before.

Texan agriculture is big, sure, but it´s also already over the edge of sustainable, so increasing the amount of farming is just going to kill it off faster(lack of water is the big longterm problem and it´s only getting worse).

There are some other specialty industries, like defense and healthcare, even moviemaking being a relatively big thing there, but again the same problem as with the computer industry, most oil and service workers that becomes instantly redundant can´t just transfer over.

Essentially, it comes down to *OUCH!*.

Even Saudi Arabia MIGHT get over it easier, simply because they don´t rely on private money or letting people do as they want.
While good in expansive economies, it combines with the other effects and risks causing big bad nastiness on Texas.

Russia: Putin gets even more aggressive militarily in an attempt to distract from the ongoing economic collapse


Hell no. The man definitely knows better than to spend money uselessly into a black hole of deficit.
More likely he would restrict trade more to mitigate the impact on domestic industry, while trying to move the oil/gas industry into other areas.

Russia has the advantage of size in more ways than one, one being that in many ways it´s effectively a very large economy partially removed from the rest of the world(money and people can´t just up and leave at the drop of a hat the way it would in Texas), which means a more isolationary standing combined with state interventions(already heavily involved in the oil industry) should be well able to stave off any collapse. First year actions would determine how badly it goes overall though.

Mexico: Enters a recession. The government changes hands and business as usual goes on.


Mexico could be the one place that literally goes to hell with the oil economy disappearing.
It´s already on very shaky ground, severe corruption and massive organised criminality with none of the scruples of the original mafias, the place could blow up really bad.

Venezuela: House of cards collapses and the country falls into civil war. The military takes over in a coup. Chavez's friends are executed and the country converts to a stereotypical South American military state.


No, continual civil war is more likely.
Because the main reason the fat cats of the nation are trying to take over, and are getting anywhere with it, is because they´re rich and getting heavy support from USA. With a collapsed oil industry, USA would probably not be able to continue such support, and even more likely, wouldn´t even be interested in doing so, as the oil seems to be primary reason of interest.

So, we suddenly have a rightwing junta taking over with parts of the military and the rich kids in support. And then they no longer have their big cash cows for support. While the poor people remains poor. And well armed.

Could be a slaughter either direction, just as well as a decades long civil war. At best they(as in the less extreme part of all factions) MIGHT be able to come to some sort of agreement, but with the primary national income gone, getting things peaceful(rather than not "open warfare and massacres" would be hard.

Elsewhere in the first world: Economies boom as the price of oil based products drastically declines. Pulling the first world out of the recession at last.


Definitely not that simple!

The effects from the oil industry crash is going to create massive unemployment in even countries only involved on the fringes of oil industry, with most of those nations not able to counter the effects of that very much.

Islamic terrorists throughout the world: Their funding stops, inhibiting their ability to carry out attacks. Then civil war in Saudi Arabia draws them to join in fighting over Mecca.

Elsewhere in the Islamic world: Economic collapse and civil war in the oil dependent Islamic dictatorships results in defunding of Madrassas and other attempts to drive the Islamic world toward Wahhabism. Home grown Wahhabists leave to join in the fighting in Saudi Arabia to the great relief of the majority non-Wahabists.


I´m afraid i´m not nearly that "optimistic".

Economic depression and problems usually cause MORE extremeism, not less.

There would for example be a definite risk of Saudi Arabia starting wars, official or unofficial for the sake of the leaders keeping control of the nation, as well as taking advantage of the chaos in nearby nations.
And don´t forget USA has spent the last 30 years providing the Saudis with hordes of military equipment.

Afghanistan, the average person has or can get an AK-47 within a few days...
Saudi Arabia in a state of near unrest? The average person has access to or can aquire an Abrams tank within a week or two. Simplified of course, but that really is the scale of the problem.
Not to forget their ability to build nucleararmed ICBMs of course. Smart move to sell them that stuff, yeah... :roll:

North Korea: With the collapse of oil, most of their export market dries up as their customer's can't afford to buy anything. They fix their economy by the tradition of method of threatening South Korea, then agreeing to stop in exchange for western aid.


:lol:

Amusing but probably wrong. They´re actually one of the nations that would benefit the most from your proposed wonderstuff.
Exactly where they would end up in the end is impossible to say, but their economy would probably get the biggest boost EVER. Lack of fuel has been the largest inhibiting factor for their economy ever since the Korean war.
And if a replacement fuel could be had easily, they WOULD aquire the ability to produce it no matter what they had to do.
It´s actually one of those rare instances of "this will solve all their problems". Or more correctly, has the potential to do so. Of course it´s more likely the leadership would just grow instantly more corrupt and siphon off much/most of the benefits, or even mess things up more, but the potential would be there.
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Re: Oil Miracle
Post by anwi   » Sun Mar 15, 2015 3:31 pm

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biochem wrote:I wish!!! In reality I think that we will get there someday. Right now GM of plants for biofuels is not very advanced.


In that case: What kind of GM plants and fuels are you talking about?
Me, I'm a bit sceptical about "biofuels". There are two reasons:
Plants have an evolutionary history in excess of 500 Mio years. It's a bit unlikely that human scientist will come up with an energy conversion process that only doubles the current efficiency of plant photosynthesis. So, you're basically stuck with the high-yield plants we already have.
The other problem is related and well known: High-yield crops that you need for really efficient biofuel production compete with food crops for arable land. And letting the poor starve for refilling your car is a bit problematical as well.
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