The luxury of being green

Many of you might have missed this exchange down in the comments section to the post called "Unwelcome Developments...", but I think it's important, so I'm going to repost it up here. In reacting to some comments about changes we should make in investing for retirement and whether it's likely that the financial system is going to collapise, Dave writes:
I'm going to say it again: most Americans are at the cliff's edge right now, any large negative perturbation (significant devaluation of the dollar, even higher energy prices) will push them over it. I'm talking Great Depression II here, no nonsense.

I get a little peeved, as I did with ianqui's post "Make your list and check it twice", based on some horse manure by Dave Pollard, about how we can all adjust our lifestyles to get ready for the crash, e.g. using less energy at home, buy organic et. al. Most people don't have anything resembling those options. I know I don't. Ianqui, if you're reading, don't take this personally -- but most Americans are struggling and this reads like a manual "100 ways to save the Earth from Global Warming" by running your dishwasher less often or some nonsense like that.

This is the Peak Oil site, if we can't deal with reality here, where can we do it?
You can read my reaction here. Don't worry, I wasn't bothered by Dave's criticism. I think he's right, actually. It's true that many of the potential "solutions" we've been talking about are steps that people can take only if they're in a comfortable enough position now. But just because only some proportion of the population (30%? 40%?) can afford to buy a Prius*, go to Whole Foods, and install fluorescent lights in their lamps, does that mean we shouldn't do it? Does it mean we shouldn't spend time trying to think about alternatives if they're only practical for some people?

I would argue that it's this 30-40% who are spending the bulk of the resources with their big Hummers and driving all over town to run errands and ferry the kids to enrichment activities. So if those people are able to curtail their energy usage, then we're probably doing a very good job of conservation, and hopefully keeping the prices lower for people who do have fewer options.

If anyone has numbers to back that up, I'd love to see them.

*It must drive Honda nuts that people always refer to the general class of hybrid cars as a Prius. I wonder if they regret their decision not to give the car its own name.

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Actually, Honda's first foray into the hybrid market did have its own name - the Insight. The big marketing mistake was that Honda's vehicle was clearly not able to substitute for the family sedan (it is a very small 2 seater) and thus could only cater to a niche market. The Prius is acceptable to the general car buying public as a sedan, and thus wildly outsold the Insight. Therefore, everybody thinks Prius when they discuss hybrids.

Right! I remember the Insight...So I guess for marketing reasons that's why they thought "Civic Hybrid" was a good idea. Hmmm. Seems like they actually might have just put themselves in a bind instead.

I am in Dave's corner.

yesterday -
wayback -

It is important for many people to live a purposefull life, a life with intent. This can indeed mean doing things that align with ones views on peak oil -

Need a new car? Get a hybrid, or effecient desiel.
Going to the grocery store? Pack your own bag(s) for food.
etc. Well and good.

Won't stop Peak Oil, won't delay by more than a few seconds.

In my public persona as a peak oil blogger, I critically examine alternatives and entertain positive scenarios for the future. To do less would be to ignore my own civic duty and sense of urgency.

on a private levet?

Looking into emergency food supplies - 1 year supply runs 400-800 bucks PP.

"Get out of debt" Not neccesarily - we could be on the cusp of the biggest default in the history of the world. No one is going to care about Joe Blow and his 20k in debt when the Multi-Trillion dollar housing bubble has collapsed.

So Joe Blow should go into debt for 20k, buy gold, and bury it. If he has the cojones.

Well great. How much will that gold last? Sounds like hiding in a bunker and sit out nuclear winter.

If Peak Oil turns out to be as catastrophic as predicted, a garden with vegetables sounds like a better investment than gold.

Well, I guess I’ll get into the other corner. I intuitively agree with ianqui’s point that a fraction of the population uses a disproportionate percentage of energy resources. A Hummer may use three times as much oil as a Prius (or high mpg pure gas fueled vehicle), but have no more benefit to the economy.

For this reason, I argued earlier that a significant percentage of our energy use is luxury demand, which could be destroyed with little real impact on people’s lives. Energy use that has no benefit will cause no damage when it is destroyed.

Say that eight percent of US consumption is luxury consumption (or near luxury) that would be destroyed at a certain price point. This would be two percent of total world consumption (8% times 25%), or 1.68 million barrels per day of a global consumption of 84 mbd.

Now I know that the biggest energy wasters are wealthy who will be able to absorb higher costs without altering their lifestyles and many of poor are stuck in energy dependent circumstances that they can’t change (ie. owning an old car). I don’t think this transition will be perfectly smooth or that people won’t be hurt. Those that adjust earlier will do better. But many of those adjustments are low risk and less disruptive than some suggestions see here.

The next ten years may see a smooth transition to a lower level of consumption and higher reliance on traditional energy. It may see a rockier road that leads to depression. Mostly likely it will be somewhere between.

I think that preparations such as reducing debt and starting to look for ways to reduce energy costs are sound advice for the poor. Cashing out a 401 K and buying gold is highly risky and speculative venture. You may wind big or lose big. Just the kind of volatility the poor and working class can’t survive.

oil traveler:

Hand Tools, seeds, gold, silver, weapons, etc.

It is funny - survivalists make me itch. I understand what you are getting at. I never thought I would find myself in this position.

It isn't my fault fault we're running out of oil.

Gold will last a hell of a lot longer than you might imagine, when the dollar is worth less than the paper it is printed on. We're not talking about "now" we're talking "after depression". If the depression does not occur, no harm, no foul.

The nineties are over. "E-Commerce" won't cut wheat. Hedge funds are toys for those who depend on inflation to steal from the workin' man -

not that I'm a commie.

Going into debt to buy gold is a good bet if:

1) Complete collapse of the financial system happens quickly, and
2) Some sort of commerce reemerges which has enough surplus for gold to again be valuable.

Since assumption 1 implies that food may be somewhat scarce for a period of time, I think gold will drop precipitously in value because it can't be eaten. Once most everybody is reasonably sure that they will be able to be fed again, then gold will regain value.

Since nobody knows how things will collapse, betting for or against gold as a store of value seems foolish to me. I think it is more likely that we will suffer a slow painful collapse, during which debts of whatever sort will be a large liability, including possibly an excuse to force people into slavery or serfdom. Therefore, being debt-free seems to me a reasonable precaution.

Once becoming debt free has been accomplished, it may be a very reasonable strategy to trade in excess financial paper for gold. As the goldbugs like to point out, gold will most likely retain some level of value; once paper has become worthless, it will probably stay worthless.

We talk a lot in generalities and macroeconomics, but the decisions will be made at the dinner tables of everyday folks as they deal with the financial realities.

Straight math says that the people who have the most will not conserve. Take two people/families/whatever, one making $100,000 and another making $30,000.

Assume they each have a car that gets 15 miles per gallon and drive about 15,000 miles a year (to make the math easy and get 1000 gallons of gas a year). Then let's look at the percent of their budget assuming gas is $3 vs. $6.

Yearly cost at:
$3/gallon = $3,000
$6/gallon = $6,000

For the $100,000 person/family, this enormous increase in gas prices only goes from 3% to 6% of their yearly income. This might not be enough to change behavior.

For the $30,000 person/family this goes from 10% to 20% of their yearly income. This might be enough to choose a job that pays less closer to home, sell a car, do vacations locally, etc, etc.

And this does not take into account all the other regressive impacts of an oil driven inflationary spiral.

I also think that borrowing $20k that you never intend to repay is not a good strategy in that debt collectors may carry guns in the future...

Also, since I live in NYC and use the subways, buses, etc, the biggest impact on my budget will be increased prices for food and probably cab rides.

I should point out, apropos gmack's comment, that while I think conservation efforts by the top 20% would really help reduce the consumption of oil, I do not think that this demographic is actually going to do anything about it since they can afford not to. But that's not going to stop me from proselytizing (you know, in an appropriate and non-inflammatory manner).

I think that ianqui and gmack are generally right that the very rich do not need to worry to much about the impacts of increased oil costs on their consumption.

But I guess that "luxury" or "reducible" energy use has a broader distribution. Certainly, nor everyone who owns a Ford Explorer is rich. Gradually, prices for imported foods will climb. Again, bananas are not the exclusive preserve of a wealthy elite. Next winter, if people look at their heating bills, turn the knob down and put on a sweater, some demand will drop. That vacation in Hawaii may be out of reach for a few more people.

I remain convinced that there are a lot of prospects for demand destruction that may not be ruinous to average people if they take place over five years or so. Thinking in a five year time frame is fairly reasonable. Even APSO puts the peak at 2007. If we head up to a peak and back down at the same rate, they would say we will have the same amount of oil in four year that we do now.

If you count some demand reduction, some increased use of alternatives and possibly a peak later than APSO’s guess, the wolf may not be at the door yet.

A huge public shift:

"A new study available today from Kelley Blue Book Marketing Research reveals that a strong majority of American consumers do not see the purchase of an SUV as “patriotic.” In the third installment of the company’s annual New-Vehicle Buyer Attitude Study on SUVs, nearly 90 percent of shoppers in the market to buy or lease a new vehicle do not believe that SUV drivers should be described as patriotic."

I think that is a sign for optimism, that public perceptions can change - well, if not as quickly as some of us would like - they can at least change in the relatively short term.

From the Yahoo article: Compared with attitudes of the new-vehicle-shopping group last year, the percentage of those who described SUV drivers as patriots dropped 12 points to a paltry 11 percent, the lowest level in the study's history.

Holy crap. 23% of people last year said that buying an SUV was patriotic?? That's just so not the adjective I'd use to describe it.

I really don't understand how that could be patriotic. Unless you are driving to an enlistment office...but then again, people who drive SUVs, don't send their kids to war.

Well, America may be on the fast track to economic and fiscal ruination, but "we're making progress" in Iraq, no?

Odograph's original point is more relevant to the post. The degree to which public opinions are shifting on peak oil and long-term energy prices is amazing. The Wall Street Journal, basically a bastion of right wing disbelief, has a favorable review of Twilight in the Desert (link below), and even Exxon is hinting at the end game.

gas cost calculators

This one is really good!

We need to promote this type of stuff to the average Joe so that we can point out how much of their money is getting sucked into paying for gas.


SOLOPEC Nations Warn Sun's Output May Fall Short of Demand

RIYADH, MUHAMMAD ARABIA—The governing board of the Solar Output Power Exporting Countries announced Monday that, in spite of attempts to raise production levels, increased global-power consumption may begin to outstrip the sun's output by early next year.

We expected some sort of hardship when we got rid of our car completely over a year ago. (We got rid of it because we were sick of driving more than because we were preparing for an oil shock, but that's neither here nor there). Instead, we have found our lives are more relaxed and enjoyable. It's true that we live in a city of 60,000, and it's very easy to get around, but I've also heard from many people that it's not a bike friendly city. (I disagree).

So what if most people can't afford a Prius? The coming crisis will force most people to downshift. A Prius is a sideshift that is not going to solve all the other problems generated by automobiles. I'm here to attest that downshifting is not that bad. Most people don't realize how far they can travel by bicycle. Most suburbs will still work fine for bicycle commuting. Remember all the bicyclists pouring into the city in "The Bicycle Thief." But when will people realize that 20 miles by bicycle is not impossible.

At the beginning of his Treatise on Human Nature, Hume points out, logically enough, that ideas come from impressions. Right now, our biggest problem is that the impression everyone has is that everyone drives everywhere. Get out there on bicycles, change the impressions, and the ideas will follow.

Bike's man... invest in bike companies (Chinese bike companies)

Half joking.

We ride... a lot.

I'm a new poster here, and I have to say that I've been gradually introduced to the Peak Oil scenario, and have accepted that it is inevitable.

My only complaint about conservation is that I'm too aware of what 90% of the populace will do, which is absolutely nothing, until their backs are up against the energy wall, so to speak.

I'd like to see more articles on practical survival, even building your own hand-cranked generator with some latent-storage mechanism like say, a spinning mass such as a gyro, or batteries that can be constructed by hand, etc.

I know there are other sites that do this, but I'd think a 'Peak Oil Survival Guide' would be a bit more appropriate than the usual survivalist paranoia-fueled sources. (We're going to get nuked, we're going to get the next plague dropped on us, etc..)

I'd also like to know how to grow enough food in a urban setting - hell, even just a crop of soybeans, whatever. Practical steps to just be able to be self-sufficient, simple enough that you could teach someone how to do it if necessary. (Convert your extra bedroom into your own food source, next on The Oil Drum!)

At this point, its not enough accepting the probable future, its a matter of just buckling down and being prepared.

I'm really worried about all this, if we're as close as it seems we are to the 'cliff'.

Tim--check out Independence Journal and Urban Survival. The "What If" series in Independence Journal (written by the "late", great j, who seems to have abandoned us...come back, j!) has a lot of practical advice of the sort you're interested in.

Thanks for the response, I'll check those out!

If I have anything to add, perhaps I'll put up something about it when I get it all organized.

sorry guys - I had a death in the family this weekend and I have been working on my electric car project.


If you want to talk survival, I am as close to a "survivalist" without the "bugout mentality" as one can get. I believe in self-sufficiency and sustainability. email me and I can hook you up:


I think that each of us should be doing several things right now:
1) ELIMINATING DEBT - not reducing. Get rid of it all, as the new bankruptcy law has teeth that will strip you of your possessions, as hungry lawyers go after common people for their livelihood. DO NOT take equity out of your home in a SECOND MORTGAGE. The only re-fi I might recommend is one to lower your interest rate and extend your loan, thus reducing your out-of-pocket for your home. This will help cash flow if Depression II happens.
2) BUY RURAL LAND - the feds and state and city governments are not interested in rural lands. The recent supreme court ruling was basically in favor of development corporations and municipalities for suburban and urban projects. If the city gets nasty, then you have somewhere to go. Land ownership is likely to remain unless we revert to roaming bands of thugs. Then, possession is the law anyway...
3) BE ABLE TO FEED YOURSELF - hunger is the biggest driver for crime, period. If you can feed your family, then you are ahead of the game.
4) BE READY FOR PROBLEMS - the best thing I can tell you is what ianqui said above -

If none of the first 3 items above can be done where you live, then you are in a very vulnerable situation in terms of self reliance.

Now I have to go put up some pickles - don't want the cukes to go bad!

Going back to the comment that prompted the post here, I wanted to disagree with the idea that "Most people don't have anything resembling those options."

Although it is true that most people can't afford to get a Prius, I'm afraid most of the rest of the original list doesn't really fall into the category of "options" at all. Most of it is simply a fact of how we're all going to be living eventually.

One such "option" that wasn't on the original list: car pooling. It's one of the options that most people won't consider right now, but it's only going to be optional for a little while. People who start car pooling now, rather than waiting a few years until single-driver cars become completely untenable, can free up quite a bit of money for the other suggestions, such as getting out of debt.

Another example: taking in borders (or renting a room). It's only been in the last 50 years that Americans got the idea that a single person ought to have a whole apartment (or house!) to himself (or herself). Soon people who live miles out from the city are going to have to find a place to live in town (unless they can be self-sufficient on their exurban plot). Since there won't be that nearly much urban living space, most of them are going to end up having to rent rooms in other peoples houses. People who do that now will just be where they're going to be anyway a few years earlier, and will save a bunch of money in the meantime--money that can go into getting out of debt, buying tools that will last, etc.

My objection here is to the notion that people don't have the "option" to live at a lower standard of living than they're used to. At the moment it actually is an option (if an unappealing one). Sooner than we'd like, it won't be an option at all. It'll be a fact of life.

Hi j! Welcome back. I'm sorry to hear about the death in your family, though.

I know you've taken issue with me before on the land thing, but seriously, eminent domain is a potential problem. Yes, I'm sure that getting rural land is a very good idea, but that doesn't mean the gov't can't take it from you if they want it (seems to me like Kelo is a bad precedent, even if it doesn't directly apply in this kind of scenario. If the decline isn't drastic, we'll have time to bring new cases to the Supreme Court to allow the gov't or private businesses to claim your personal farm so they can use it to produce food for the greater community...)

When the government starts actively seizing private rural land, woe to those who try it in the former Confederate states or out west. I cannot speak about the northeast, but the interior of this country will revolt in earnest should property rights be actively assaulted. It is one thing to do it in or near a metropolitan area. It is quite another to try it in the hinterlands.

Incrementalism by government is accepted in urban areas. It is not something routinely acepted in rural areas, where people actually know their elected officials and their local sheriff. Stupidity may prevail at the federal and state level, but locally things are much more responsive to the people.

WHICH IS ANOTHER REASON to get the heck out of metro areas if things begin to get nasty (or nastier, depends on your POV).

They have confiscated gold and silver before - they will do it again. While the law may have been bent by our corporate-owned supremecist court, they haven't ever tried to take rural land away from people outside of dam projects, parks and military bases. Even then, the compensation was adequate to move them to somewhere equitable. And the projects were of immense value at the time.

If there is wholesale land grabbing by the government, we will revert to possession as the law of the land, which puts us in a definite WCS. It pits the common people against the government on a very key and personally important issue, which will mobilize people. Not something the government wants....the government WANTS us squabbling as Republicans and Democrats - it is the smokescreen behind which they have pillaged us for 100 years...

So ianqui, if you are beginning to believe in WCS, then you had better get a plan to not only get some land, but to hold it...or buy a tickte to elsewhere. Or you and G could simply buy a nice 30-foot sailboat....and fly a flag of property taxes on boats

ianqui -

no kidding about the boat either. It is an extremely flexible contingency plan, and really fun on weekends!!

Yeah, but it's hard to grow vegetables on a boat. I mean, I suppose we could dock reasonably often and buy veggies, but it's not exactly a self-sustaining farm.

j, I've told you my contingency plan involving my parents property before. On the other hand, I just learned something very heartening this past weekend. My step-sister-in-law's step-father (yeah, go figure) owns a vast nursery and vegetable farm not too far from here. I was telling them about peak oil (in the nicest possible way) this weekend, and we all agreed that we would go to her step-father's farm when necessary. And, if I want to go learn gardening techniques in the meantime, I can go spend a week on the farm sometime. I'm totally going to do it.

What would this boat use for fuel?

Anybody buying a boat better get a sailboat, and learn how to maneuver it around a dock without use of an engine. We may see a lot of future trade carried in these types of vessels.

j - in regard to government confiscation of gold or land: true, the historical precedent is a lot stronger that the government may try to confiscate gold; OTOH, gold can be easily hidden, so that confiscation decrees can be ignored. You can't hide land, and if you want to oppose confiscation by the government, you and/or you and your neighbors need to have enough manpower and guns to credibly match whatever military or police force is sent to remove you.

Gmack, if you've never read Josh Slocum's book - you might find it fun. Not only does it show how to get around the world on an engineless boat, it shows how they did it without electricity!

For those interested in boating, becoming intimately familiar with the art and science of using a sextant may also become important. Too many sailors now are completely and totally reliant on GPS for navigation.

sorry about the multiples. i was hitting "reload" under firefox and i didn't notice that triggered a repost!

Roy -

I don't know about you, Roy, but I am sick and tired of rolling over so the feds can grind it in deeper each time. There will be a point where the people have had enough, and I do think that government confiscation of rural lands will be impossible. You will be asking people to take farms away from their friends, or sons to take away farms from their fathers (or their friends fathers). While people in the city have become used to government excesses and constantly expanding powers, those in rural America are not. And they depend on their land for livelihood in many cases.

Nope - I don't think that will fly at all - it is a WCS, and as such, something that will provoke a very emotional response from people. They will unite in common defense for their lands and homes.

I do not think it likely that it will come to that - the government has entirely too much to lose - namely, power. The only reason they have respect today is the threat of force.

ianqui, Roy, Gmack -

Of course I meant a sailboat!! I mean, we are at TOD, right? *grin*

As for veggies, you can always pull in somewhere and get some. The protein can be had with a fishing rig, a small net or a speargun and snorkel. Hell, you could even go clamming if you needed to, or set lobster pots....

The reason a boat is a good way to survive political turmoil is that you are simply free to go where the wind can carry you. You can set sail for elsewhere, even to the point of going to undeveloped shoreline areas. In the tropics, wherever there is freshwater, there is fruit. And you can pack a LOT of dehydrated food into a sailboat as well. Coupled with desalinator (solar), and you can do fine.

If the GPS is down, I would do as the captains did in earlier times - run the coastlines to get where you want to go. That way, you can usually get supplies and have access to freshwater. If you have charts and a sextant, it is fairly easy to navigate. But unless the GPS system falls from the sky, you will have no problems.

This is ironic, a thread about something I said and I had to go offline for a couple of days. Thanks, Ianqui for posting on this important subject.

Generally speaking, those with financial means have difficulty relating to the problems of those without them -- I see this in some of the comments here. In a society like the US that has enormous wealth inequality, the rich won't have to conserve energy when the Peak Oil crash comes and they won't since they feel entitled to their wealth and consumption. This "I've got mine" attitude is pretty typical of American culture. When those "Survivor"-type TV shows starting airing, I knew something was up, a microcosmic mirror of the society they originate in. Everybody pitted against everyone else with the usual temporary alliances, backstabbing, etc. and one winner at the end. Sounds about right.

The NY Times did a multipart series on wealth inequality lately which may be online, I haven't checked. I highly recommend it.

Jon S. said "In my public persona as a peak oil blogger, I critically examine alternatives and entertain positive scenarios for the future.... on a private level?".

Right, I blew up my public persona. I mostly crashed with the year 2000 dot com bubble, struggling ever since. I read lately that 16% of all software jobs were outsourced last year and the number is going up. One of those jobs was probably mine. Here in Colorado, the economy never recovered from the scandals and hype in the telecom industry. I'm fixing up my house to sell and unfortunately won't get all the equity I could have gotten since I refinanced back in 2003. This is probably a good thing, becoming liquid now, since when the crash comes (next year or the one after that, IMHO), at least I'll have some cash and I can pay off the credit card debt. But I've been living on credit margins as most Americans do.

You guys know (or should know) that most of those people driving those big obscene SUVs can't really afford them, right? From the Fallows "Meltdown" article:

The evaporation of personal savings was marveled at by all economists but explained by a few.... [note, I can explain it, they all been brainwashed by advertisers for years and years to spend, spend, spend - Dave] ...At the beginning of this century they were saving, on average, just about nothing....

"In the last year, the net national savings rate of the United States has been between one and two percent," the economist and then president of Harvard Lawrence Summers said in 2004, a year before the rate hit its nadir. "It represents the lowest net national savings rate in American history and, I believe, the that of any major nation" Summers gave his speech five years after his appointment as Treasury secretary...."

For the large majority of Americans, then, no savings and higher energy costs with the accompanying inflation in the future and for many of them, no jobs after the the Peak Oil crash. All this will be a disaster.

Have a good one....

Dave -

You are right. Personal savings is a critical difference between us and Japan or the last depression. The "credit overshoot" will eventually collapse the world economy, and Greenspan is likely to try and keep feeding the monster he created until it simply explodes in his face...

Dave--thanks for weighing in. This is really a comment for another place and time, but another side fascination of mine is how far into debt people are. I'm not thinking of people who are living on the edge because they're a family of 4 with little income, but rather 20-somethings who buy flat-screen TVs and leather couches and fast cars and go out to expensive bars 4 nights a week just because they have credit cards. I'm hardly wealthy--I am a 3rd year professor and my husband is a post-doc for crying out loud. Grad school doesn't pay very much. But I never, ever buy anything that I can't afford and I remain absolutely astonished by the behavior of my peer-group. This is perhaps more relevant--the consumerist mentality in the US is so out of control that when our dollars aren't worth nearly as much anymore, our artificially constructed lifestyles are going to totally suffocate us.

J says:

I don't know about you, Roy, but I am sick and tired of rolling over so the feds can grind it in deeper each time. There will be a point where the people have had enough, and I do think that government confiscation of rural lands will be impossible.

Its not just the possibility of the feds (or the state government, which is actually more likely in my view) trying to take rural lands. I think the most likely possibility is that millions of starving city folks may move into rural areas, and squatting on farm land in an effort to practice subsistence farming so that they can survive. In such a situation, "possession is nine-tenths of the law" pertains, and unless you are prepared to shoot them all, I don't think that there is much that rural people will be able to do about it, because they will be badly outnumbered.