(OILPRICE) — Many readers will know about the claim that a frog plopped into boiling water will hop right back out if it can, while one put into cold water which is then slowly heated will remain until it is cooked. The claim is wrong, but the story is quite useful in understanding some human behavior. Gradually changing circumstances are typically more difficult for humans to detect and react to than circumstances that are changing rapidly.
Such is the case with oil prices. The velocity with which oil prices rose in 2007 and 2008 transfixed the public and policymakers. The price vaulted from $60 a barrel on the first trading day of 2007 to above $147 on July 11, 2008, the (so far) all-time high.
At the time many believed that oil production might be reaching a limit that would never be breached, a possibility with dire implications for a society deriving more than a third of its energy from oil and dependent on the substance as a basis for myriad products such as plastics, pharmaceuticals, herbicides, pesticides, lubricants, heating fuel, fabrics, paints, solvents, and asphalt, just to name a few.