In the great simplification Nate Hagens mentioned peak affordability as a more useful concept than peak oil. The idea is that as there is less oil available or less energy in total, things become more expensive, less affordable.

Here is the premise: As oil supply issues causes things to become more expensive via energy prices, there will be less demand, so the price of oil goes down as there is less need for it. He thinks this is a feedback loop.

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I definitely agree that we are past peak affordability. But on the feedback loop I think it will hold for a bit, but only for a few years.

Oil price elasticity is likely non linear. At the beginning we will renounce to the least useful stuff. Maybe finance, maybe excess consumerism, maybe most of the affordable luxuries. All the bullshit jobs as David Graeber described them.

Later on the demand side will become too relevant. People are likely to pay all the money available to avoid starvation, or cold, or deadly heat. The ROI (in capital) will increase again so the drilling for the hardest stuff will restart.

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Jessica Lambert described the pyramid of energetic needs. The idea is that most advanced activities in society require from the most basic ones. Arts or education require humans to have agriculture sorted, with enough energy available.

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It is reasonable to think that our systems will choose not to allocate enough capital to drill oil to get arts running. But not that we will skip a meal if we can avoid it.

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If the IAE findings are correct, the timeframes for all of this decline is 25 years.

*#climatechange