Drum, Simmons (at Agonist), and all sorts of other stuff...

Well, Drum's at it again, but this time it's an article posted for the Washington Monthly magazine. It's a piece that's rather a contextual/historical discussion and amalgamation of the five post series from last week. Good, level-headed stuff from Drum as always, definitely worth the read. (hat tip: Energy Bulletin)

The next thing of interest is a three part series by Sean-Paul Kelley over at Agonist. Very interesting interview, and definitely worth the time. (again, hat tip: Energy Bulletin).

Here are the links and a quote from the story:

PART 1 Bush connection, Saudi Arabia:
PART 2 Saudi Arabia decline rate and the possiblities of a production collapse
PART 3 Peak Oil: Not sustainable but insatiable

From PART 3:
SPK: ...what's the solution?
MRS: Once it is clear that Saudi Arabia has passed sustainable peak production because once that happens then the world has categorically passed sustainable peak production.

One of the things we need to do is understand the true value of a really scarce resource. You know, we wasted most of the great oil, by giving it away. And get people appreciating that oil and natural gas need to be at prices that are vastly higher than what they are today. And once they get to that people won't get disturbed or mad. They'll accept it.

It's interesting the steps we can take that really aren't exactly as draconian as they sound on the surface. You got to fix the transportation market. 70% of every barrel of oil used in the world today is used to transportation. But there are some really interesting fixes. If you put all of the goods we now move by long haul trucks and get them off the highways and put them on the rails that has an energy efficiency of between five and ten fold, as opposed to five or ten percent. And that is not an impossible mission from a five to seven year time if we had to do it.

There is a huge side benefit to that. By eliminating the trucks on the road we actually make a bug dent on traffic congestion. Traffic congestion is public enemy numbers 1 through 8 on passenger car fuel efficiency. And so we can have all of these Priuses and hybrids, don't get me wrong they are great. I drive a fabulous new Diesel Mercedes and I get, on the open road, as long as there is no traffic, I can get almost 50 miles to the gallon. But when I am in stop-and-go traffic I get between 5-11 miles to the gallon.

You have to address traffic congestion and you have to address some of these areas where there are magnitudes of savings and then we have to learn to do things like distributed work. The miracle of the internet and working online. It took three months to get my firm online. Rather than have people drive for two hours in the afternoon and two hours in the evening we will actually adjust to people working in their neighborhood for their company.

And we need to learn how to make things closer to home.

Then there is agriculture. Food models. Apples sold in the summer in the UK 85-90% of them comes from New Zealand. That's a 22,000 mile journey for an apple! If we went back to growing our food closer to home which is easily done, we could help our economy, get better apples because they are local, and we save enormous amounts on money on energy/transport costs. We can make those changes in a 5-10 year period of time without going into an energy war.
(3, 6 and 7 June 2005)

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PG--yes, it seems like there are a lot of reasonable solutions to transportation issues. But, much of that involves rail, which this country has been notoriously bad in constructing and maintaining. Do we know anything about the feasibility of extending the rail network in the US? How long would it take? How expensive would it be?

ianqui -

It would be relatively easy to extend rail service to most parts of the country, provided they upgrade to seamless track. Much of the rail system was demolished in the last few decades due to consolidation as the industry collapsed. The right of ways and beds for the rails are still there, but most of the bridges are gone.

Subsidized cheap oil and the Teamsters killed the rails in this country. Expensive oil will bring them back, but if they use yesterdays track technology, then we have speed limits.

Here in Houston, there are miles of abandoned rail beds that people use for biking trails...

Well, since I see nobody guessing at this one, I will.

If we assume that we must rebuild railroads, then where will the money come from? We have no passenger rail system, so increasing that by riding more is not possible. Most of the excess capacity in the current railroad companies has been scrapped, leaving them with relatively small fleets of cars and engines.

Low interest loans to rail companies? Well, lows of 2-3% didn't help them recently. There was no expansion in their industry even with cheap money hanging from every low branch for the last decade.

Problem is, we cannot suddenly start riding the train more often to boost their rates - there is no train. They cannot bring in excess capacity to take care of increased demand, because there is no excess capacity. There is also no increasing demand yet. Because the rail industry has been all but shot in the head across all of the US (except maybe the northeast), free market drivers will not work.

In all probability, this will have to be done by government edict and at government expense. And we all know this means that governments favorite industrial sons will be given the contracts, the budgets will be overrun, and the delivery dates will never be met or be met very late, and that sub-standard materials and practices will be used in construction. Then we will have a horrendous accident, blame will be put on someone currently out of favor with the PTB, and the whole rail system will have to be replaced again.

I estimate that of it is a government project, it will be a 20-year monster, and in the hundreds of billions. And that we will use some kind of gas turbine engines that only one of the defense contractors (like, say, GE) can produce. Or that we will opt for some ungodly complicated system that is completely different from what we have installed as infrastructure today. Change the guage of the rails, or make them incompatible...that way more corporations can be rewarded for their financial support of the legislators crafting the project.

Just imagining from the POV of a hungry legislator...

J--normally I might agree with you, but I'd hope that shortages--at gas stations, at stores, etc--might push people to finally be efficient, for once.

I think that any change (back) to a rail system would have to be driven at a state or regional level, and by a very progressive, forward looking group of individuals, rather than mandated from the federal gov't down. As the price of gas and diesel fuel increases, trucking at the local level with short-haul frequent-trip loads will become much less affordable. Businesses that have to move large amounts of goods, over regional or intrastate distances may have to look to rail as an alternative.

Hopefully this will boost demand for rail shipping services, and the owners will have capital to upgrade services. State goverments could offer tax relief to businesses to help encourage the use of rail systems, rather than providing additional direct monetary assistance to the rail companies.

This post is laden with a few stipulations, a couple what-if's, and comes from the mind of someone with a non-economic background. However, I am interested in the return to the use of railway and light rail systems as an alternative to oil intensive transportation systems, so if anyone has expertise and/or constructive criticism, I would appreciate it.

As an aside, I fear for the hundreds of thousands of truckers currently employed as the price of oil climbs and ground transportation costs skyrocket.

I am going calling J and raising him a grand.

In the present political climate, which will not change until an entire political culture is changed, coming together for the good of the country is not in the cards. The current majority party is seeking the annihilation of the other party. Political initiatives are staked out for that purpose.

If the Dems staked out Peak Oil as their new issue, we would hear all kinds of stuff how the natering nabobs of negativism are at it again.

This is what is the most discouraging fact of all, as I see it. The two parties would have to get along.

Furthermore, the Republicans would have to accept the fact that government spending and leadership would have to be primary--to build up the railroad system. That would violate the radical free market ideology currently in vogue.

Well, of course...I'm not envisioning that a grand return to rail travel/shipping would happen under the current administration.

Let's revisit this issue in 2008. It's possible (probable?) that by then the economy will have been directly affected by the lack of cheap oil, and the country will look to the party who has some solutions (or...well...talks about it, at least).

A girl can dream, right?

Guys -

I honestly don't think either party has a candidate with the stones to go against the wishes of the corporatists. They are ALL bought and paid for by one group or another...

J is right on that one. The party (remember, we only have two viable parties because of the way our system is set up...) that will respond to this problem is the party that is in power when the crisis hits, much like 9-11 was for Bush...

I agree with Sam as well. Politicians that are worth their salt wouldn't touch the issue of peak oil (or any other issue that is so controversial) until it has political reward in it for them.

As for public policy on trains or any other huge capital expenditure (and it would be huge), Steve's right, it will likely be a localized effort at the city or state level that gets rail back on the map...and even that politicians are going to have a hard time selling because inevitably, they have to pay for it somehow. No politician worth a crap will attempt to raise taxes without something bad enough going on that it will not affect his/her political future.

Wait 'til gas is $4/gal, then we can have the policy discussion. Until then, pittances will be thrown at researching alternatives, but only then (and maybe not even then) will we see any real policy momentum.

The problem is Ianqui, we ain't got 'til 2008. The resource wars will have begun by then if PO is now (not to get completely dystopic...again...)

I disagree, PG.

I think it will take a higher price to force the change. The UK has been living with $4 gas for quite a while, and their mileage is not reduced. Their CAFE standards are much better than ours, but their driving habits haven't changed at all.

I'm thinking more along the lines of $7-$8...


From the Cal Aggie http://www.californiaaggie.com/article/?id=9533

People are already starting to panic. Last month, two Sacramento brothers were arrested after being caught siphoning gas from various vehicles. The reason, one of them told police, was that they simply could not afford gasoline anymore.

Stories like this prompt the question: as fuel prices continue to increase, will people fight over the dwindling supplies or will they work together to find a solution to this oncoming problem?