[Oil] The slowly boiling pot
It would appear that President Bush is going to launch an investigation into rising gas prices (about a week after the Democrats demanded it). It will be a fruitless exercise. Since it would appear that we have nearly reached, or have reached peak oil, the rise in prices is likely a natural response to realistic predictions of the value of crude oil as a commodity. For the most part, gasoline's rising costs come from speculation on the world oil futures market (and in recent days, due to the switch from MTBE to Ethanol as an octane booster). With nothing but growing demand, especially from China, and no more likely supplies forthcoming, prices of this limited and extermely important energy source were bound to go up - oil company profits are just a side benefit to an otherwise normal market reaction. With many Europeans paying around $6-7 per gallon equiv., we shouldn't be complaining. One of the major differences is that our infrastructure (that would be low-density suburban housing and commercial/industrial development) was built on the promise of cheap and abundant oil forever. Well, sorry, those days would appear to be over. While major gains in efficiency could be made (cars, housing), the fact is that our infrastruture is a major liability. Even were we to create a viable replacement for the ICE automobile, say something that gets 150 miles per gallon (and we'd need the factories and energy to build millions and millions of them), there is still huge swaths of modern civilization that require huge fossil fuel inputs (methane gas for electricity and home heating, petroleum for pesticide, methane to make fertilizer for agriculture production in the green revolution style, oil for plastics, and on and on.) We are likely to see the end of things like economic growth, previous lifestyle, and virtually everything that we have come to take for granted in the US.
My own travel expenses have been racheting up along with everyone elses. While I have a job that I can do, to a certain extent, anywhere there is a high speed internet connection (which also presupposes an electrical infrastructure that never fails), most folks are not so lucky (I sense my future employment will involve setting up lots of SSH/VNC or VPN setups for white-collar workers - probably around the time gas hits $6/gal, which I fear, won't take too long...). At one of my main client's place of business, blue collar workers assemble expensive custom industrial machinery. Not only will skyrocketing prices make the goods cost a fortune, but my guess is many of the men building them make perhaps $12-15/hr. One of my coworkers indicated that his gasoline bill is now $500/month. Something's going to break, and soon, and my guess is that it will be the backs of the poor and lower-middle class in the very near future, and not long after, it will probably be the middle class. People's imagined wealth (3000 square foot homes, houses 50 miles or more from where they work) will become nearly worthless overnight, and with them any hope of economic well being. I'm personally looking to buy my first home right now. I'm dismayed at how little I can get for what I can afford, even knowing I make more than most Americans. I'd like to live right in the city [downtown-core/uptown](high density, able to walk, take the bus/light rail to work, telecommute, etc.), but frankly the sprawling suburbs of the Twin Cities give me a certain pause. The smart thing would be to live in a smaller town, not overdeveloped, but those can be hard to find (and more difficult to live in if you are an urbanite by nature), and odds are, any such places will become very hard to get into once the housing bubble burst blows this country's 'wealth' to kingdom come, as sustainable living arrangements will likely come at a price premium. With a personal savings rate of -0.5%, Americans are in no condition to weather such a mess, assuming rising medical costs don't bankrupt many of them even sooner.
As an aside, later this evening I should be chatting with the various and sundry candidates vying to take over Martin Sabo's Congressional seat (my phone has been ringing off the hook since I became a state delegate). Here's hoping a couple of the candidates 'get' this kind of stuff, and are electable to boot.
6 comments:
Looks like Bush is going to temporarily stop filling the Strategic Petroleum Reserve. This is a short term and minor reduction in global demand, and it will not make much of a dent. When Americans begin to grasp that we're just not going to be able to supply much more than the 85 mbpd we are now - Ever - things will start to fall into place. Only a reduction in world demand will drop the price. Less demand means, generally, negative economic growth. China is using all the oil it can get its hands on, and will probably take up the slack.
Here is a bit on the multiple levels of middlemen in the oil market, and speculation regarding any 'gouging'.
I've always wondered why we never really pursued building Solar Energy Farms.
We have the technology to do this now.
We have the infrastructure to build the receiving structures right away.
Last I checked, Sol ain't going anywhere anytime soon.
Why not do this right away?
Oh, that's right; the will to go.
I suspect that, going forward, the sprawling urbanization that occurred in the past 150 years will slide backwards into becoming something akin to the European city structure. But it's going to be an ugly thing to see as it happens.
Solar farms are problematic in some ways, in that the resources and materials needed to create solar panels are dependent on fossil fuel inputs (plastics, etc.) Cells are also only a few percent efficient, often physically fragile, etc. Setting that aside, all renewable energy is pretty much likely to come from our local star. The average square meter of land hit directly by the sun is subjected to like 1300 watts of energy, so there certainly is a huge potential for energy production. It becomes more difficult in certain regions, but then there are other solar-derived energy sources that can be used. Wind power, for example, is basically just a manifestation of solar energy, and Minnesota, as well as North and Soutth Dakota are considered the 'Saudi Arabia of wind'. The solarsat/microwave beam (ala Sim City 2000) mentioned on that weblink are certainly another way to go, but the expense is probably tremendous and you would have to be careful where you aimed the beam... The real issue is that these energy problems are going to catch up with us faster than any potential solution is likely to be put into place.
The way I've always understood the plan was this:
1. Build a few massive solar farms on-orbit (either in Geo or HEO).
2. Farms transmit their power via microwaves to receivers on the planet.
3. ???
4. Profit.
Seriously, microwave transmissions to Earth-bound receivers would work.
Will it be expensive? God yes. But you know, I suspect that companies like Exxon-Mobile could be -- ehem -- convinced to start funding these efforts.
Will it solve the fuel issue for transportation? Nope. Nothing will. Sorry, folks, that part of our civilization has to change. But I see wacky places like Europe getting by without three, four, and five car garages and I know we can adjust.
What it will do is allow electricity to supply factories and the like. Add in my other two favorites (tidal turbines and wave-action dams for certain inlets and bays) and I'm not too worried about keeping the power grids up.
Where I am worried is keeping our farm equipment fueled and operating. But I suspect that a combination of retraining people to stop using fossil fuel vehicles and rationing (ugly word, but honest) the oil to critical industries will buy us the time to avoid the Peak Oil disaster scenario.
In all the arguements I have seen about why altnerative energy is doomed because it relies on fossil fuels seem flawed, and here is why I feel that way:
1) they do not take into account alternative plastics made from renewable oils like vegetable oils.
2) but it takes fossil fuels to raise crops, how can you say this? Well, the people putting forth this argue do not take into account that yes, it takes fossil fuels to raise crops to produce this energy, but no one seems to realize, that as you make more an more alternative fuel, you start using more and more of that alternative fuel in the process thus reducing the dependancy on fossil fuels. Any gap, because this is not a closed system, in energy production should be made up via some other alternative, such as hybrid tractors that can run on vegetable oil based fuels/alchohl, which can also have batteries charged by something like a solar or geothermal generator.
3) most end of the fossil fuel articles I have read have been alarmist and have only provided to scare, not help. If you scare and say the end of the world is nigh, start providing a phased approach to getting off fossil fuels. For example ways to conserve more, how to intelligently discuss this topic with others without sounding like an 'end times' freak. Losing fossil fuels will suck, but we've existed for 2 million years prior without it, and we can continue to have that life blood of the information age, electricity via many, many other alternative ways that won't kill us, and are better for the enviorment and ultimately us. And I don't mean nuclear. The average person is just not educated enough to know these alternatives, most of which would require doing things slightly different, but also have the potential to not be much more work. What I am trying to say is some of these can be accomplished even taking into account the laziness inherent in Americans.
Just because we are losing oil, which is relatively easy, does not mean we are going to lose plastics and electricity. I have seen studies about making CDs based off a corn based plastic. Now this also is not real good as corn is the SUV equivalent of the plant world. Corn can actually be grown without the need for pesticides and fertilizer, if farmers are smart and do things like crop rotation (I know my dad used to do this and he never needed any chemicals). But because farming is now agri-business, they take the way out that results in more profit for less cost, fertilizers.
It will be tough, and probably bloody, and revolutions will be fought because people are greedy and only through a painful lesson will change, true change, occur. The new class structures need to be eliminated and people need to return to thinking in terms of community and not self for us to be able to enter a new golden age. We have entered a second Dark Age, it will unfortunately take some time and pain to enter into a new Renaissance.
The only sadness is that I do not think this will happen in our lifetime, and maybe not in our children's, but it will happen.
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