Originally Posted by
Zeros
All good points JD, especially in terms of affordability for the majority. Although I’m concerned that this is rarely taken into account by authorities who seem to think everyone earns $100K per year! Power, water, gas, rates, land tax, phone, internet, not to mention the cost of other private essential services such as food, mechanics, trades, etc which all seem to be increasing in price exponentially.
Despite our mind bogglingly high cost of living, the economy here seems to keep growing.
Despite all the complaints, when I look back at my life, and that of my parents, I see that we currently have an unimaginably high standard of living compared to even a few decades ago. Sure, our houses cost a lot more - but speaking as someone who grew up sharing a bedroom with my brother, in a house whose roof leaked when it rained, with no hot water system, no heating, definitely no airconditioning, no phone, no flush toilets, it is hardly surprising that it costs more. And taking into account the inflated currency, most of this does not cost more!
My father admitted not owning a pair of shoes until he started high school - and he grew up in Orange!
I’m no economist, but think the opposite might happen in terms of diesel prices. As EVs become the norm, petroleum products will become more expensive due to less demand and higher production cost ratios.
Most petroleum production does not work like that - the major cost is the capital cost of exploration, drilling, and installing production facilities. With a substantial drop in demand, and these already in place, for these fields, the tendency will be to increase production to try and make up for lower prices. High ongoing production cost fields, such as a lot of those using tertiary production and some unconventional fields, and fields with low production per well will shut down, leaving the world average production cost lower. Eventually, as low cost fields are depleted, costs for oil will rise, but if demand drops substantially, as I expect it will, this could take a long time.
Of course, since the major part of the cost of the fuel you buy is government take (royalties plus taxes), which can be changed at the stroke of a pen, the physical limitations only provide an overall constraint!
But I agree it will be many years before there’s no diesel, supply will continue. The bigger issue may be legislation against diesel vehicles due to environmental, political and public pressure imperatives.
Very interesting discussion
