Tuesday, May 09, 2006

Soft Landing Off Of Peak Oil


For people who drive, it's getting more expensive, but the sky is not falling on American life.

Many folks talk like "Chicken Little" who said the sky was falling. They notice that oil is used in products from food to clothing. They say the "thousand mile salad" is going to die.

No, that cornucopia of food at our supermarkets from all over the world can continue, maybe just a bit modified. Apples from New Zealand, grapes from Chile. It all takes oil to grow and ship, but oil is only one "line item" in a bigger picture.

Sure the price of products will inch up, but oil is only one part of the story. Oil costs can be absorbed into the "thousand mile salad" fairly easily. Energy prices are hidden among labor, land, technology, capital and other items in the cost of doing business.

Driving will really be the problem, not shopping.

The American economy will survive. It will just have to adjust the price for it's cornucopia a bit.

Local bus fares may go up to 75 cents to reflect a fuel surcharge, but the biggest costs are still labor for driver's wages and so forth. The WTA bus is sure a bargain at 50 cents per ride and 75 cents is still workable.

Most of this "pie chart" continues to be paid by the tax district anyway with the fare box just one sliver.

My point is that driving cars will be hit hard, but the rest of the economy will adjust more easily.

All these Bellingham people keep running around saying "the American economy is finished." "No more thousand mile salad, no more American petrochemical agriculture."

I say hogwash.

The American economy of products and services will adjust to oil's "line item" shock. The price pie for products is much bigger than that. The price can go up slightly, but business can keep going.

Car drivers are the one's who will suffer the most. Car drivers are also being hit by the cost of space for roads leading to traffic congestion as they can't afford to build more lanes. They are even hit with the "driveway runoff" problems in Lake Whatcom Watershed. Oil is just one line item in the automobile's illnesses.

The Chicken Littles will not be able to continue driving with their bumper stickers that say "buy local." They will have to bike or walk to the Food Co-op, but they will still find that cornucopia of apples from New Zealand.

The economy will not collapse, most likely. Not in my lifetime at least. It may change a bit, but still survive. Car drivers will have to change the most. Maybe they will still be able to drive, but long commutes will become the most costly. Much more costly than the thousand mile salad.

Those wonderful crisp (remember it's now autumn in New Zealand) apples will still sit in the bin next to the "buy local" posters on the wall at the Food Co-op.

Even the Co-op is now a "thousand mile cornucopia," but that's okay.

Even the milk isn't really that local. Dairy farmers get their hay and feed corn shipped in. It comes from far afield.

Field's afar?

The carton of "chocolate milk" that fuels my bicycle will still fetch it's inputs from all over; including the tropics where cocoa beans are grown. It may go up in price, but not unbearably.

As gas goes up 50 cents, I noticed only a dime "price hike" in my chocolate milk. The fuel costs that dairy farmers face are hidden in the bigger picture of labor costs, capital expenses and so forth.

America can survive a long time after peek oil. There is even plenty of tar sands in places like Alberta, if need be. We got clean coal. We can learn to use solar, wind. No need to say "good by" to the thousand mile salad.

Automobile driving will have to be reconsidered, but most of the rest of our economy can just be modified slightly.

Maybe people will still drive as electric cars and nuclear power could save them. Problem is the roads are too congested, even if we get our energy from nuclear.

Maybe computers will drive the cars so more can fit on I-5. Then "technology fix" can even reduce traffic.

Driving is the thing that will take the biggest hit, but the rest of our economy can adjust without too much trouble. The sky will not fall.

Speaking of sky falling, there is the green house effect. That's a big problem also.

Again, it's cars and driving habits, not the thousand mile salad, that will feel the most need to change. Everything can adjust if we are flexible and don't get too hot under the collar.

1 comment:

Anonymous said...

I have just been looking at your website for a while now, I enjoy it very much. You discuss a wide breadth of important issues, and it is so interesting to hear your opinions about urban development considering you dont drive a car. You are definately a step ahead of the rest of us (I still drive, I admit, but not much anymore). I definately agree with you that what will change the most dramatically as we approach peak oil is the ability of people to drive whenever they want, I think that we will still have NZ apples in our co-op, the co-op will just need a much much bigger bike rack! I also liked what you said about building up instead of out, it makes so much more sense. I spent about 8 months in Europe last year and it was pretty amazing to learn that people build up instead of out. In America, especially on the west coast, we see nothing but single story developments along the road systems (wallmarts and single story minimalls) and suburban sprawl, outwards forever! Only in massive urban centers do we actually start seeing buildings above a few stories. Do you know what the tallest building is in Bellingham? Well, I appreciate your website. I admire your self confidence and openess, it is inspiring for me to meet men who are confortable with themselves as it encourages me on my own path of self discovery. Glad i bumped into you today, hope to see you soon.