Friday, January 4

Flirting with the $100 mark

Oil prices just tipped over the symbolic $100 a barrel mark last week, although they have eased off a little since due to concerns that a flagging U.S. economy could lessen demand. It looks like demand for oil may be a little more elastic than economists once thought. Some Americans have been showing signs of changing their consumption behavior, at least in the last few months. Given these interesting developments, it's probably worth a brief remark about how oil prices and suburban infrastructure intersect with each other.

My whole introduction into the small but vehement peak oil movement was by way of Kunstler's most recent book The Long Emergency, and I've been sporadically trying to follow some of the technical reports over at the Oil Drum blog. The basic idea is that global energy demand will continue to grow, while the necessary oil supply is finite. The peak of oil is the point at which the rate of production is maximized, and every barrel of oil from that point on costs more and more to extract from the earth's surface. The patron saint of the movement, M. King Hubbert was pretty accurate when he predicted in 1956 that the United States would reach a peak in its own production in the late 60's. Now many people are applying the Hubbert model on the global scene and coming up with a variety of predictions, from already passed to about 2030.

What this means is that oil prices will go up, if not immediately, sometime in the future. What this means for standard land development in the United States is that, barring some extraordinary technological advances, it is not sustainable economically. Sprawl is a notoriously energy intensive and inefficient system, and at least now it depends entirely on the availability of cheap oil.


"The economy of suburban sprawl has a systematic self-organizing response to the availability of inordinately cheap oil with ever-increasing entropy expressed in an ever-increasing variety of manifestations from the destruction of farmland, to the decay of cities, to widespread psychological depression, to the rash of school shooting sprees, to epidemic obesity. American's didn't question the validity of the suburban sprawl economy. They accepted it at face value as the obvious logical outcome of their hopes and dreams and defended it viciously against criticism. They steadfastly ignored its salient characteristic: that it had no future either as an economy or as a living arrangement. Each further elaboration of the suburban system made it less likely to survive any change in conditions, most particular any change in the equations of cheap oil."

A little hyperbolic? Maybe. But worth thinking about. Global warming has been an ethical challenge, and we have mostly been able to ignore it without incurring much personal sacrifice. But if the oil forecasters are at all right, our world's limitations may stop requesting and start demanding some changes.


Zed said...

Unfortunately, the rising gas prices are felt most harshly by those who can least afford them. If you're struggling to make ends meet, with rising food prices, with rising heating costs, then a more expensive commute could well push you over a tipping point. And, sadly, those with minimum incomes are also those least financially able to quit their jobs, pack up their homes and move. That would partially explain the relative inelasticity associated with domestic oil prices.

It would seem that this is a failure not just of the market place (with the cheaper homes tending towards the outskirts of any community), but also a failure of our governance system. We have encouraged a society that now depends on cheap oil.

Daniel Nairn said...

I'm glad that you brought up the social justice implications. It's true that with any major transition those who have enough wealth can usually get through it without much trouble. But those without savings may not have the time or ability to get their feet back on the ground. There has to be some help available to them.

My hope is that we could move toward a more sustainable infrastructure gradually rather than waiting until it is forced upon us suddenly. That might ease the burden a little.