From the article:
6. An “upside down” peak oil story.
Most people in the peak oil community believe what economists say about supply and demand–namely, that oil prices will rise if there is a supply problem. They have not realized that in a networked economy, wages and prices are tightly linked. The way limits apply is not necessarily the way we expect. Limits may come through a lack of good paying jobs, and because of this lack of jobs, inability to purchase products containing oil.
The connection between energy and jobs is clear. Good jobs require the use of energy, such as electricity and oil; lack of good-paying jobs is likely to be a manifestation of an inadequate supply of cheap energy. Also, high paying jobs are what allow rising buying power, and thus keep demand high. Thus, oil limits may appear as a demand problem, with low oil prices, rather than as a high oil price problem.
In my opinion, what we are seeing now is a manifestation of peak oil. It is just happening in an upside down way relative to what most were expecting.
It seems to be an issue of how different aspects of the whole economic system work with each other in non-obvious ways. It's the reason that Jevons rebound manifests in unexpected ways in the global economy because money abstracts human activity. Effects from changes in one geographical area or economic sector can be instantly transmitted to other areas because they affect the electronic money flow. For example we might see improvements in North American energy efficiency boosting industrial growth in Korea. The problem of course is that once any activity has been monetized and the money then sent to wherever the demand is, it joins the aggregate global money stream - so it's hard to tell what the original effects were that contributed to Korea's growth.
It looks to me as though that's what's happening here. Wages are declining for a number of reasons, some of which have nothing to do with oil. But that dec;line reduces the demand for oil relative to the supply available, so the price falls.
The problem with Peak Oilers (including me) was that they weren't as strong in systems science as they needed to be. Some like Gail are waking up to that fact, improving their understanding of large-system behaviour, and making more nuanced assessments of the situation. The result is better explanations for a somewhat counter-intuitive situation.
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