Trade, Transportation and the Chinese Finger Trap
Posted by nate hagens on January 22, 2007 - 12:02pm
This post will examine the theory of international trade and the hierarchy of goods transport, production and consumption. It is quite possible that in the next decade,or two the increase in price (or the decreasing availability) of oil and financing, will offset the benefits of many types of trade.
The pursuit of economic efficiency, through increasingly diverse and extensive global trade has glossed over two important facts which this post will examine: 1)higher oil prices in long distance transport must at some point exceed (economically or otherwise) the benefits achieved from some trade and 2)a complex global trade system is gradually but pervasively decreasing the ability for localities, regions and nations to be self sufficient – so many of our supply chain inputs are imported that continued increase in oil price/affordability will resurrect import substitution policies, not only for less developed countries, but for the US and rich nations as well.
International Trade - A Chinese Finger Trap?
INTRODUCTION
The idea for this post originated on a recent errand to Fleet Farm to buy a replacement spark plug for my dads chain saw. I discovered there are not one or two kinds of spark plugs but hundreds, depending on the type of machine they go into. The plugs were made by a variety of companies, some domestic, some foreign but none from my state (currently Wisconsin). As I noticed this, I looked around the dozens of aisles and hundreds of shelves at the thousands of products and 'saw' for the first time how complex our import/export system has become. And the fact that my dad couldn't cut our firewood without that certain sparkplug reminded me of Liebigs law of the minimum, or in the vernacular - something is only as good as its weakest link. I couldnt help wondering how much oil was embodied in those spark plugs; their parts, their manufacturing, their delivery to central Wisconsin, etc. While my research didn't discover this answer, it did result in my viewing trade, transportation, and our societies consumption habits in a different light.
Much has been written on this site and elsewhere on the exact date or time range when we begin the second half of the age of oil. I will not address timing in this post other than to point out that the later it is, the more can be done to address the systemic risks suggested below. The human pendulum of complacency and panic is in full effect as oil breached $50 on the downside today. Those who read this piece and connect the dots should recognize that $50 oil is not a reflection of its abundance or scarcity but is rather an opportunity to effect change (because change is cheaper). There are after all, about Trade has been around almost as long as humankind. Historically it was largely a barter system, before currency was adopted as a medium of exchange. Modern international trade is based largely on Ricardian model of comparative advantage, one of the most eloquent but non-intuitive concepts in economics. Indeed, a story told amongst economists is that when an economics skeptic asked Paul Samuelson (a Nobel laureate in economics) to provide a single, meaningful and non-trivial result from the economics discipline, Samuelson quickly responded with, "comparative advantage."
ABSOLUTE AND COMPARATIVE ADVANTAGE
The early logic that free trade could be advantageous for countries was based on the concept of absolute advantages in production. Adam Smith wrote in The Wealth of Nations:
"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. " (Book IV, Section ii, 12)
The idea here is simple and intuitive. If one country can produce some set of goods at lower cost than a foreign country, and if the foreign country can produce some other set of goods at a lower cost than can be done locally, then clearly it would be best to trade for the relatively cheaper goods of both countries (or regions). In this way both parties gain from trade.
If a person/region/country can make a product cheaper or more efficiently than someone else, they have an absolute advantage in this product. However, a country that can produce two things (or everything) better than another country can still benefit from trade. This is due to the brilliant (on an empty planet) theory of comparative advantage first articluated by David Ricardo. Here is an example.
The Magic of Comparative Advantage – A Hypothetical ExampleBoth Wisconsin and North Carolina have lots of trees, productive farmland, access to labor, and cows. (assume for this example their labor force and populations are equal) Both produce cheese and furniture. But Wisconsin (for various reasons) has an absolute advantage in the ability to produce both cheese and furniture. If they were to devote all their resources each laborer could produce 12 units of cheese or 4 units of furniture. In North Carolina, each unit of labor can produce 6 units of cheese or 3 units of furniture.
Wisconsin is 'better' at making both products, but applying the theory of comparative advantage, North Carolina is ‘less worse’ at producing furniture. This can be seen via the concept of opportunity cost. For every unit of furniture production, NC is giving up 2 units of cheese production (6/3). For every unit of furniture production in Wisconsin, they are giving up 3 units of cheese production (12/4). Therefore it is ‘more costly’ in terms of opportunity lost for Wisconsin to produce furniture than it is for North Carolina, in a world of frictionless trade.
Specifically, in a position of autarky (or closed economy), each state will devote half its resources to each production pursuit – Wisconsin will produce 6 units of cheese and 2 units of furniture. North Carolina will produce 3 units of cheese and 1.5 units of furniture. In our hypothetical world without trade then, a total of 9 units of cheese and 3.5 units of furniture are produced.
But then a trade agreement is signed. Because they have a comparative advantage in furniture, North Carolina devotes 100% of their resources towards producing 3 units of furniture. (and no cheese). Wisconsin produces 12 units of cheese (and no furniture). Now the ‘world’ has 12 units of cheese and 3 units of furniture. However, Wisconsin can easily shift 3 units of its cheese production to create one unit of furniture. The world now has 9 units of cheese and 4.5 units of furniture with no extra resources or labor.
Trade, via specialization, has magically created an extra piece of furniture, with still the same amount of cheese!
WHAT PRICE CHEESE?
A key question in this post: what happens when the cost of transportation of cheese and furniture between North Carolina and Wisconsin(via higher oil prices) exceeds the benefits from trade (an extra unit of furniture)?
I remember in graduate school thinking comparative advantage was pretty cool. But, like many things in neo-classical economics, comparative advantage relies on a battery of assumptions, many of which prove problematic in the real world. Josh Farley and Herman Daly succinctly describe some criticisms of the assumptions that underpin comparative advantage in their textbook "Ecological Economics"(1),
1. "No extra resources" simply means no additional labor or capital - there IS commensurate resource depletion and pollution accompanying the extra production.
2. The neglecting of transportation costs. Transportation is energy intensive, and currently energy is not only directly subsidized, but, in addition, many of its external costs are not internalized in its price. Consequently, international trade is indirectly subsidized by energy prices that are below the true cost of energy.
3. There are two important costs of specialization. First, all cheese makers (cheesesmiths?)in North Carolina must become furniture producers and vice versa for furniture makers in Wisconsin. Making such a shift is costly to all whose livelihood is changed. Also in the future the range of choice of occupation has been reduced from two to one - likely a welfare loss and assuredly an occupational risk.
Furthermore, after specialization, countries lose their freedom not to trade (the chinese finger trap). They have become vitally dependent on each other... Remember that the fundamental condition for trade to be mutually beneficial is that it be voluntary. The voluntariness of 'free trade' is compromised by the interdependence resulting from specialization. Interdependent countries are no longer free NOT to trade and it is precisely the freedom not to trade that was the original guarantee of mutual benefits of trade in the first place.(1)
CAPITAL MOBILITY
An often overlooked provision of Ricardian comparative advantage, but one of extreme relevance in today's world, is that of factor immobility (factors other than cheese and furniture). In reality, today's borders are porous to billions upon billions of dollars of capital movements moving to the areas of the world with the cheapest production. In effect, the rich countries have a comparative advantage in 'money' and are trading it for the labor and resources of other countries. A countries current account is the difference between the monetary value of exported and imported goods and services. When the imports are greater than the exports, the account is in deficit. If exports are greater, the current account is in surplus. So, comparative advantage, with the assumption of immobile factors relaxed has effectively resulted in the erasure of national boundaries for economic purposes. Some people call this globalization.
The following graph shows the increasing percentage that trade is out of total US and world GDP:
Source World Bank
Below is a chart of US imports and exports and our trade balance:
US Imports and Exports - Click to Enlarge
As can be seen above, imports have been outpacing exports for some time and the pace has accelerated of late.
US Oil Imports by Country - Click to Enlarge.
Finally, it is of some concern that 'services' continue to increase as a % of our national ledger (implying that 'goods' are becoming less). We still do produce huge amounts of food for export, but that is increasingly being accompanied by movies, massages and things higher up the 'discretionary' hierarchy (more on that below). Here is a graph indicating the growth of services vs goods in our Gross Domestic Product and Employment. America seems to have a comparative advantage in 'services'. The counter-argument is that more services naturally arise as economies become less energy intensive - this view ignores energy as a unique input and therefore all countries can't become less energy intensive over time under a growth regime.
US Goods and Services- Click to Enlarge.
THE GRAVITY MODEL OF TRADE
The Ricardian model is not the only economic model dealing with trade. The
Here is another graphical illustration which incorporates speed (which increases energy return on time) and energy intensity:
Source: Jean-Paul Rodrigue Hofstra University
A recent article in the Economist points out that comparative advantage also works at our most basic level of trade (male/female) and was of historical significance:
In the 1960s transportation accounted for about 23% of all energy expended in the USA- now the figure is approaching 28%. The yellow line (almost on top of the pink line) shows of the transportation, 99% of it is oil (there is some electrical, natural gas and coal usage)(3). We are really dependent on oil!
The following two graphs show the energy efficiencies of various modes of transportation first for people and then for goods. This first graph is from Richard Heinberg's book "The Oil Depletion Protocol" and is based on data from Britain (which Richard tells me is fairly universal):
As can be seen, the bicycle is the most energy efficient mode of transportation - even better than walking. The other insight from the graph is we gain quite a bit of efficiency from packing a lot in one vehicle. (This is a concept used often in China)
As far as transporting goods, there is a large disparity in energy efficiency per ton mile for different transport methods:
The above graph is somewhat dated (1991), Though there have been efficiency improvements across the board, the general model of water/rail/truck/air in order of efficiency seems to still be intuitively correct, though some argue that rail is more efficient than water. It is actually quite a complicated issue as it depends what one is transporting and the sequence of steps. Alan Drake recently did a study showing rail transport to be 8.3 times as efficient as trucking.
One can visualize the energy efficiency/footprint of various transportation modes as something like this pyramid:
As transportation costs increase, communities and regions that are able to effect movement downwards on the pyramid towards its base will have comparative advantages, due to savings on energy costs, and availability of products.
Let's now shift gears just a bit. Psychologist Abraham Maslow theorized that humans meet basic needs in a hierarchical fashion. Once basic needs are met, we seek to satisfy higher needs such as self actualization and fulfillment. In the current era of cheap oil, at least for western society, a very small % of energy is spent on basic needs in proportion to the energy intensive 'desires' that drive western society:
This concept can be expanded upon. We sometimes take for granted the things that we really need, and make us happy - I am 90% as happy eating fried fish from a local lake as I am driving to Chicago to my favorite sushi restaurant (well at least 80%). Higher personal consumption efficiencies in an energy challenged world are lower on the pyramid.
We finally come full circle to the spark plug question. There is a great movement (at least in the peak oil circles, not yet in the peak credit circles) towards relocalization. But 'local' labels in many cases are misleading due to the insidious reliance on foreign parts at different moments in the supply chain.
One of my best and oldest friends is an entrepreneur from China. He owns a business in Connecticut that seeks out American companies that need nails, screws, and small metal parts at their factories - he then signs contracts for 5 million screws at 2.5 cents each - screws that in the US would cost 6 or 7 cents due to higher labor etc. He pockets half the difference. The point being that our basic goods might ostensibly be made here, but their component parts may not.
I have not seen a way to measure this so have come up with my own, "the Embedded Transportation Chain". First Order Origin represents where you buy something (in your town would be 100% local). Second Order Origin represents where the components and parts came from on the product you bought. And Third Order Origin represents where the raw materials came from for the parts to make the Second Order Origin parts. To determine how 'local' (in the sustainability and security sense) a product is, one would multiply Level 1 * Level 2 * Level 3. Of course, there is very little that is truly local, as a world of increasing international trade has increased 'Third Order Origin' percentages dramatically. (I don’t have accessible data on this-the amount of work would be closer to an academic paper – here I just wanted to lay out the idea). True to the field of economics, I have made these terms up. However, also consistent with economics, one can grasp the common sense implications. When looked at in this 3-tiered light, the phrase “Made in America”, takes on different meaning.
I currently reside in Wisconsin. To eat local is cheese curds, fried fish and venison. All these things can be bought (or harvested) locally. But the cheese company gets milk transported from around the state, uses packaging made overseas from natural gas. Its employees drive to work using cars made in Japan and oil from Nigeria and eat food imported from New Zealand. Although the dairy farmers themselves use largely local inputs for feed and bedding, their milk buckets are made from steel processed in China, and the wood for the barn comes from a mill in Canada. It is not easy to decipher the ‘localness’ of a product, unless one walks out and picks a wild mushroom. Use your imagination however to consider WHAT IF oil doubles triples or more in price, what sort of domino effects might occur in the production supply lines. It is hard to predict what "Liebigs product of the month" might disappear from the store shelves - Charmin bath tissue one week and Stihl chain saw blades the next.
A quick example is footwear. 98% of all shoes in the United States are made somewhere else, many in China.
Increases in efficiency of goods production in a global context are considered a good thing, as they raise respective countries GDP, and allocate resources wherefore the total pie gets bigger. Once on this track however, participants continue to strive for more and more efficiency, more trade advantage and cheaper production. If taken to its natural extreme, every place on earth will specialize to the maximum profit of corporations. Implicit in this path is the forgoing of expertise and local resources that are lower down the pyramid of human necessities. If transport costs are 20% of a products value and oil doubles or triples, they become upwards of 50% of a products cost. Certain products then become uneconomic to ship. Some of those products are components of larger products which do not have local substitutes.
High quality and abundant oil has obfuscated the difference between wants and needs. At a Walmart or a Safeway, young people today see quilted bathroom tissue, pork chops, colorful shoes, dental floss, and avocados as a natural smorgasbord, without internalizing the complex energy/trade chain that put them there. This plethora of choices that globalization offers us could just not be possible in local or regionally based economies. In some senses, to revert the global network of specialization back towards less complex, more regional networks is kind of a chicken-or-the-egg dilemma. Unless we change the consumption drivers, there will be little incentive for the manufacturers of nascar lunch boxes to move downwards the production/transport and global/local pyramids.
When (and in my opinion its only a matter of when) oil becomes less available/affordable, centralized forms of energy command will not be efficient because different regional blocks and localities possess their own comparative energy and resource advantages and disadvantages. National umbrella energy policies treat all states the same. Corn ethanol roll out is a prime example - what might be great for communities in Iowa and Minnesota has different math for California and Vermont. We know that distance impacts energy efficiency and costs. We also know that different states (and countries) have different indigenous energy resources (Quebec has hydro – Arizona has sun, Montana has wind and coal, etc). It is likely there will be decentralization of energy production as regions move towards building blocks of basic needs in safer spatial scales. The magic of comparative advantage can still work in the second half of oil. But it ultimately will differentiate between basic needs and unnecessary desires - and take advantage of water and railway access.
1. We need oil for more than just driving. It is embedded in almost everything. Unless you're Amish, Aleutian, or have alot of friends, oil is life in the USA (at least currently).
2. Higher oil prices combined with lower (or no) credit availability will eventually make certain types of modern trade prohibitive. As such there is shortfall risk in modern supply chains that is not in current economic forecasts.
3. Those nations, regions, communities and families that produce lower on the left graph and consume lower on the right graph will have an advantage when transportation costs increase. Those communities using predominantly rail and water transport will have advantages over those more dependent on truck and air, everything else being equal.
4. As is occurring in some South American nations currently (Peru and Venezuela come to mind), a return to the import substitution model away from the so-called Washington consensus seems inevitable. However, remember the supply/demand wedges in the Hirsch/Bezdek report showing how rapidly production shortfalls could occur. Local, regional and national action needs to be taken soon because of the required long lead times.
5. In rich nations, in addition to conserving, it will be advantageous to begin to be happier with 'less' because the delta of 'desires' may change slower than that of 'things' available in the future, relative to other countries (e.g. Europe and Africa) that exhibit lower energy footprints. In other words, though the USA can easily get by with half as much energy-intensive stuff and conveniences, an abrupt change to this level will be much more mentally painful than a gradual one.
In conclusion, as a thought experiment, the next time you go to your nearest box store, look at the gazillion products on display. Try to imagine where they come from, where their parts come from, and how that supply chain might change when new oil production fails to match decline rates of older wells. While you are there, you might notice how many of the myriad products improve yours or your friends lives, and how many do not. This 'demand' side view of Peak Oil will be the subject of my next post.
Next post (if I successfully defer my addictions): "Evolution, Discount Rates and Addiction"
Nathan John Hagens
Resources cited:
(1) Ecological Economics - Principles and Applications, Herman Daly and Joshua Farley (in my opinion, a textbook that should be used in every college in America)
(2) "Gravity for Beginners" Keith Head. http://pacific.commerce.ubc.ca/keith/gravity.pdf (.pdf warning)
(3) National Transportation Statistics 2006(pdf warning), US Department of Transportation
Gravity Model of Trade -Commodity Flow Correlation with Distance (2)- Click to Enlarge.
Energy costs vs speed
A PALEO-ECONOMIC PALATE CLEANSING SIDEBAR BEFORE WE MOVE TO TRANSPORTATION
In existing pre-agricultural societies there is, famously, a division of food-acquiring labour between men, who hunt, and women, who gather. And in a paper just published in Current Anthropology, Steven Kuhn and Mary Stiner of the University of Arizona propose that this division of labour happened early in the species' history, and that it is what enabled modern humans to expand their population at the expense of Neanderthals.
With the peak of conventional oil likely being in 2005, and the long decline in societal benefits from oil on the near horizon, perhaps I should brush up on my woodchopping and carcass dragging skills...;-)
TRANSPORTATION
Transportation as % of total energy use- Click to Enlarge
MegaJoules per passenger- Click to Enlarge
Energy Intensity per ton mile by freight mode. Source - EIA Click to Enlarge
The Transportation Pyramid. Click to Enlarge
ENERGY USE AND HUMAN WANTS AND NEEDS
Maslow's Hierarchy of Needs------------------Nate's Intuitive but Made Up Hierarchy of Energy Use. Click to Enlarge
The Consumption Pyramid - Click to Enlarge
The Transportation Origin Chain- Click to Enlarge
CONCLUSIONS
THE BOTTOM LINE
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I have read, it seems reasonable, that the majority of Americans live off the discretionary income of other Americans. Author Thom Hartmann addressed this in his book, "The last hours of ancient sunlight."
Hartmann described a software company that he used to consult for years ago. First visit: two or three people. Second visit: several more people, after another round of financing, bigger offices. Third visit: dozens of people, after another round of financing, very nice offices. Fourth visit: empty offices, they ran out of money, without ever delivering a product.
The point is that the majority of our economy is largely an illusion, albeit an illusion that consumes vast quantities of energy. Instead of gong to Vegas, you could just mail them a check for $5,000, and it would have the same economic impact.
We are facing a relentless transformation of the US economy--from one focused on providing "wants" to one focused on providing "needs."
Basically my ELP recommendations can be reduced to: Cut thy spending and get thee to the non-discretionary side of the economy.
As I have said about a 1,000 times, if I am wrong, so what?
You will have a lower stress way of life, less debt, and more money in the bank.
This is something that a lot of peak oilers don't understand. We are not going to create an economy based on doing each other's laundry. One, there's that constant growth thing. And two, when the going gets tough, people will do their own damn laundry.
When the going gets tougher, we'll wear dirty clothes.
No, when the going gets tough, most people will be unkempt, poor and surly, doing the laundry and servicing the whims and base needs of the few remaining people with power and money.
We will not be doing "each other's laundry" in some communitarian ideal. We will be doing Their laundry, their nails, their cabinets, their hair, their wigs, their blowjobs and their back-breaking agricultural labor.
GDP is quite interesting when you start digging a few levels deep. 72% of the US's GDP is services. We hear that our economic expansion is due to increases in productivity. How do you measure increases in productivity of services, such as a bank?
The Dept of Commerce measures, for example, a bank's economic contribution to GDP by by "net interest margin" difference between assets (loans mainly) and liabilities (deposits mainly). However, productivity of a bank is measured by the number of "transactions" -- using the ATM is considered a transaction as also when you go to the bank teller in person to get cash. Use of the internet to check balances I believe is also counted as a transaction.
Is it no wonder then that the US's productivity is increasing at a high rate, when the overwhelming majority of the economy is services and the Internet and technology allows for rapid transactions -- ie productivity.
It is also theoretically difficult to justify productivity -- which is defined as output per worker/hours worked for a bank when the GDP impact is net interest margin and productivity is "transactions" -- the two measures do not match -- more transactions does not mean higher net interest margin.
The Dept of Commerce admits that a "stronger theoretical basis" for measuring GDP impact and productivity of services industries is needed.
The GDP is a Ponzi scheme, counting capital as revenue.
http://potluck.com/media/the-unsustainability-and-origins-of-socioeconom...
Pertinent to the discussion here, Oil is capital literally burning up until we are forced to account properly. This goes well beyond oil and has been going on for thousands of years in the form of "agriculture". When all real capital has been consumed, whether in an internal combustion engine or from plowing, we are left with consuming each other. The end.
Bacteria, on the other hand, will live on. Collapse from one complexity state to a lower state doesn't mean we have to suffer or even be less comfortable. Relocalization is a start, but don't forget that we know little about how to preserve humus after 10,000 years of farming. Relocalization will be meaningless, if we start burning humus with tilling, fertilizer, and pesticides. If you want coincidences, look at where all the worlds deserts are located and then think about where agriculture has been practiced for the longest. We are just beginning to dig up the ancient ruins beneath the Sahara. That's righ, the weather is responsible. Sound familiar?
Ahh, yes, the great Yellow River desert, so lifeless and barren after expending its soil as the cradle of Chinese civilization that now a mere 100 million people live along its banks...
Truly, the accuracy of your statement is astonishing!
They're lucky, it's a flooding river, like the Nile. A pity they fucked up the natural fertilizing function of the Nile by building the Aswan dam. China is making the same mistake.
Take a look at the cradle of civilization: from Marrakesh to Multan the landscape is indeed barren. Where once the mighty cedars of Libanon grew, now only dust remains.
Look at our works, ye mighty, and despair!
One example of a cradle of civilization is now a desert; another example is still highly fertile.
Ignoring the second and claiming the first represents a general trend is known as cherry-picking, and represents a very biased and partisan approach to the data.
Unless it really is a general trend, of course. Which I believe is the case: Wherever ancient civilizations appeared, when they disappeared they left scorched earth. The exceptions are where large rivers replenish the soil supply, most notably the Nile, the Tigris/Euphrate, the Ganges and the Yellow/Blue river.
So if those four are counter-examples -- and they involve the cradle of western civilization and the cradle of eastern civilization -- then what are the examples of this actually happening? For something that "really is a general trend", I would assume there are dozens of examples of agriculture leading to massive-scale desertification; what are they?
(I'm also surprised you listed Tigris/Euphrates as a counter-example; I was under the impression that part of the reason for the decline of Sumeria was lowered agricultural productivity due to salt accumulation on the field from their method of irrigation.)
Well, the whole of the Mediterranean (the Greek and the Spanish didn't make their fleets out of the present-day mediterranean vegetation) and the Middle East (the cedars of Libanon, North Africa: the bread basket of Rome). Each time the soil in Mesopotamia became bad enough, the current empire retracted and after a few floodings it was ready to go again.
And farming might be sustainable for millennia in its current form, that's not enough. It must be sustainable practically forever. Even as little as the loss of 1 mm of soil each year is 1 m per millennium. That's unsustainable, the exact period that it goes on depends on the soil supply. How much soil has disappeared in the Dust Bowl area, and how much is left? We can be certain that that kind of agriculture in that area is *not* sustainable.
We're talking about food, not forestry. And Spain is a net food exporter, with a vastly larger population than it had in the days of the Armada, so I really don't see that it supports your claim.
Italy and Greece would be better examples -- both are net food importers -- but both have strongly increased their food yields over the last decades (Italy, Greece), allowing them to support vastly larger populations than in their empire years.
Egypt currently produces enough food for about 2/3 of its population, or about 50 million people. i.e., Egypt alone could feed 80% of the Roman Empire circa 300AD; North Africa could still be the breadbasket of Rome.
In fact, almost every major agricultural area currently supports many more people than it ever did in the distant past. Even Iraq produces millions of tons of cereals, despite its agricultural capability being degraded by successive wars and sanctions, which is most likely more than it produced in Babylonian times.
In fact, the strong trend seems to be that ancient breadbaskets are still strong producers of agricultural goods, which is directly counter to your argument.
One way or another, farming 1,000 years from now will be very different from farming now -- the odds that we'll be at a comparable level of technology are vanishingly small.
I do agree with you that we should avoid long-term damage or degradation to our fertile lands, though.
Of course the yields have increased due to mechanization and chemical fertilizer. What the yields would be now with ancient methods is speculation, though I speculate 'a lot less'. But both mechanization and fertilizer are dependent on limited resources, that are not impossible but very hard to replace, indeed, and will certainly become more scarce in the mid-term future.
So I think we can conclude that long-term agriculture is not impossible, but far from a happy-go-lucky endeavour.
(I appreciate the follow-up of the discussion.)
I'll agree with that.
And that. :)
Yes! Irrigation and plowing release salts that can otherwise coexist in the soil without a problem. Watch the video:
http://www.permaculture.org.au/greening.htm
Those are hand fulls of salt he is showing you from Jordan. So where did he put it? "It's not supposed to be possible", they told him. With agriculture, it isn't and you get desert.
The process depends on the soil and ecology being damaged. Grasslands are the most vulnerable, but that is what you get when you clear a forest to grow yet more food for a "growing" population. Since the forests are so integral to affecting climate, rain, and increasing soil humus, they take longer, but will become deserts, too. Bring the forest back to the yellow river and it will run clear, again.
225 days of the year? Five times as much irrigation as done in 1950? There may be 100 million people there for now, but look at the Sahara for where this ends. The river is "yellow" from the soil washing away. Only clear water runs out of a healthy ecosystem. Those dust storms settle over the Rocky Mountains. The process takes thousands of years, but ends the same way as seen all the way from the Sahara to the Gobi and moving down the Yellow River to the ocean for 225 days in one year alone.
Why do you believe that? What evidence do you have for the assertion that long-term agriculture must inevitably lead to desertification?
The Yellow River has been surrounded by extensive agriculture for something like 6,000 years. If it hasn't become a desert in that time, why should we believe it'll do so any time soon?
Again, an assertion for which you provide no evidence. The Yellow River (which is, indeed, named for the large amounts of soil it carries) hasn't had its name changed recently: it's been the Yellow -- carrying vast amounts of soil -- for thousands of years.
Again, if it's been doing that since the beginning of history, what's the evidence that'll cause a problem any time in the forseeable future?
Maybe you're right, maybe the 6,000-year history of agriculture around the Yellow River is going to come to a crashing halt in the next few years. Without compelling and objective evidence to support that proposition, though, a disinterested observer has no reason to believe it -- the 6,000-year history of the Yellow being bountiful is pretty strong evidence you need to counter.
Especially considering that the land 90% of the river's silt comes from ain't farmland.
The Chinese have practiced fertility management over the ages much more effectively than most of the world. This hasn't sheltered them from famines (only experienced with agriculture), but their land was in decent shape in comparison to other areas when the industrial age began.
Agriculture, being a business, has been well documented through the ages with hard numbers. The pattern is decline, until a new understanding helps put depleted land back into production. These days we speak of hybridized seeds and GMO; 80 to 200 bushels per acre for various grains. Previously, we spoke of deeper tilling and a new understanding of fertilizers; 20 to 30 bushels per acre. Before that they abandoned a field when it produced less than 5 bushels per acre. This is just the recent 200 years of history. Part of what drives this happens as the farmers get squeezed for cheaper food, causing them to rotate one less field or some other short cut when innovation fails them.
For reference, much of what I am referencing comes from Masanubo Fukuoka's work in Japan. Although he calls his work "do nothing farming", it would be a misnomer to think this means that nothing is done. "Doing nothing" mearly represents the ideal case, or Mu. In grotesque summary, the acts of tilling, fertilizer, weeding, and herbicides have all proven to diminish crop yields. His yields were in the 30 bushels per acre neighborhood (no till, weeding, fertilizers, and near zero labor, virtually left wild, but with subtle and well timed day or two efforts). Before you point to the efficiency of today's yields, remember that he doesn't rotate fields, plus he has multiple grains producing on the same acre. His effective yields are comparable to today's high energy efforts with little to no labor (work smart).
Recent revelations in soil ecology explaining the gist of what Fukuoka's research reveals:
http://www.energybulletin.net/23428.html
You can practice hydroponics out in a field as long as you can keep up with the increasing labor requirements. The problem is keeping up with the work you make for yourself in subsequent years based upon a finite resource. Increases in energy perpetuate the pyramid scheme.
We know this is how soil functions, because we know how to directly reverse it. We don't even mind that you have hand full's of salt on the remaining sand:
http://www.permaculture.org.au/greening.htm
China would have been able to keep going with famine cycles for much longer, had they not adopted the hybrid seed, fertilizer, and herbicide regimen. Look into their child swapping traditions to get an idea on how common famines have been over the ages.
Then methods clearly exist for agricultural practices that are sustainable over millenia. QED.
The question is not whether current industrial agriculture is sustainable; the question is whether agriculture is sustainable, and 6,000 years of farming in some places -- as well as Fukuoka, Ingham, and similar agriculturalists -- suggest that it can be, if one uses sensible techniques.
Any evidence for this claim?
I'm guessing not, especially since extensive research on this shows you to be utterly wrong:
"With an extensive database on nutrition and food availability in preindustrial societies, which was compiled in the 1950s, Benyshek and Watson compared twenty-eight hunter-gatherer societies with sixty-six agriculturalist societies. They detected no link between lifestyle and amount of available food, or between lifestyle and frequency or duration of food shortages. Feast-or-famine cycles were probably common throughout human prehistory, and they may indeed favor thrifty genotypes, the anthropologists say. But the cycles seem to have been equally likely among foraging and farming economies. (American Journal of Physical Anthropology 131:120-6, 2006)" (link)
Just because you believe something doesn't mean it's true.
I saw an apt quote in the Internets a while back: "Beware the man of one book."
Many people have a bias, and many people do...less than objective presentations of their observations. I'm sure Masanobu has done some fine work -- and I agree with a certain number of his (less spiritually-based) views on sustainable agriculture -- but I'm just as sure that he's not presenting a full and unbiased view of agricultural practices.
When a man talks about science as if it's a bad thing, I begin to suspect that he may not be giving me a fully objective appraisal of the situation. That doesn't mean he has nothing valuable to say (he does), but it does mean that one needs to be careful to accumulate a balanced perspective.
The problem is that there is no evidence to support the claim that famine happens to Foragers as much as it happens to Agrarians, or that it ever happened to Foragers. You are asking for a proof of a negative. Could you speculate that it happened? Sure, knock yourself out. That's what the article you posted says that they did ("probably" and "may".don't mean they have any basis to state such a thing as fact).
Here's a plausible scenario: Super volcano blocks out the sun for a year.
In this case, for farmers, the crops will surely fail, or be delayed for a year, and surplus must be relied upon. The foragers have a lean year ahead, along with all the animals that they can survive by eating almost exclusively. Many edible bugs will be unaffected, so a change in foraging style will be needed for a time. If you think the Foragers are vulnerable in this sort of crisis, then you don't know much about Foraging. Several animal food sources will be unaffected. For agriculture, no sun for a year would be very bad for the population, as not enough surplus will be available for such a disaster. In fact, famine often coincides with food distribution issues, not as much crop failure. Floods and drought don't affect forests to the extent they affect a field of exposed dirt.
Don't ask for a proof of a negative, it just happens this way, due to the water retention and self-circulation of forests. I already gave you a source for this from Energy Bulletin. Remove the forest and you get drought. Drought cycles translate to famine cycles. The drought eventually becomes semi-permanent.
Are you saying that science should be trusted implicitly? Beware of "new scientific understanding" coming your way. Science is merely the best understanding given the facts that we know about. This doesn't mean that science should be trusted as if fact. In the case of human health and nutrition, there appears to be confusion within the scientific and medical establishment. As energy reserves deplete - whether tomorrow or years from now, science will be looking for ways to reduce agriculture's energy foot print. Considering their best guess, thus far, is more in line with economics, I'm skeptical about science when it comes to our food sources.
In the meantime, you can go get your hands dirty and see for yourself what happens when you follow science compared to what happens when you follow Fukuoka and Permaculture paths. Don't believe me and don't believe anything you read, but believe what you see and try for yourself. The worst thing that can happen will be that you spend less time at the grocery store. The upside is that you avoid all those medical bills from such poor food choices, prepare an insurance strategy against disaster, and save some money. The labor costs are primarily upfront: land forming, sheet mulching, some tree planting to get things started, and time observing what works and what doesn't.
Fukuoka started out as a respected scientist. As one scientific theory proved to be bunk after another, he became increasingly disenchanted by modern agricultural science. In fact, he became alarmed enough to write books, travel the world, and be quite noisy regarding his view of science as a result of his work. Considering his success using "do nothing" farming with close to insignificant energy inputs matching harvests in his area using modern techniques (hybrids, fertilizers, deep plowing, pesticides) and huge energy inputs, I'll be trying his methodology for myself. I can't grow rice, as he does, but that isn't the point of his work. I'll be starting with groundnuts (Apios Americana) for my own area.
Incorrect. I am clearly and explicitly asking for evidence to back up your claim. If you are unclear on the difference between "proof" and "evidence", I'm sure there are web resources you can consult.
Moreover, evidence certainly does exist; e.g., the paper I cited. It's not proof -- hence the use of words like "probably", but that wasn't the question.
Incorrect.
"Probably" -- in the context of a paper using proper scientific methodology -- means "the balance of evidence supports". They don't have enough evidence to state that the thing is certainly true, but they do have substantial evidence supporting it, and no or trivial counter-evidence.
Your idea of "plausible" obviously differs from mine...and from that of the editors of the American Journal of Physical Anthropology, apparently.
If I had meant to say that, I would have.
Instead, I said that anyone bashing science should be viewed with a healthy level of skepticism. One of the tenets of the scientific method is objectivity, suggesting that a man who bashes science may not be fully in support of objectivity either. Indeed, science-bashing is in modern culture most commonly associated with cranks or religious fundamentalists, either of whom tend to have...less than objective messages they attempt to promulgate.
Not all science-bashers are cranks or fundies, of course, but there is an unfortunate correlation, and hence a prudent observer would take science-bashing as a warning sign to examine the evidence carefully and from multiple perspectives.
Hardly surprising - Pimental reported much the same when comparing organic and conventional farming methods. That's not the point of modern farming practices, though. Modern farming practices aren't intended to maximize yields, they're intended to maximize profit. While linked, those aren't quite the same -- detailing a man to tend every acre personally would undoubtedly raise yields, but would be vastly more expensive.
Which, of course, is one of the reasons I'm skeptical about a terrible dieoff if oil supply falls precipitously. There are well-known farming techniques -- such as Fukuoka's -- that can return similar yields to what we're getting now, but for far less energy input. They require many more man-hours of work, though, but that'd be fine in a "post-peak crash" scenario, since the standard assumption is that many oil-related jobs will be lost, so the extra manpower will be readily available. So all that'd be likely to happen is that food would get more expensive; considering how cheap it is now (in the West), there's plenty of slack for that before serious problems start.
Westexas,
Your idea about the value of things is fundamentally wrong. I'm very sorry to say and I hope you don't shoot me for this, but it is so naive and wrong that it is almost laughable.
* The value of things is what you pay for it.
* It doesn't matter if you can touch it or not.
If you think an item you can touch is worth more than a service you cannot touch, then you would be willing to pay more for the item you can touch and less for the service.
I will give another example:
What is worth more?
* a dollar worth of horse manure
* a dollar worth of gold?
or
* a 100 million $ worth of cheap chinese plastic crap
* a 100 million $ worth of a design of a new micro processor from Intel?
Why on earth should we suddenly think the comparative advantage models are no longer valid, just because oil is becoming more scarce & expensive? They have worked for several hundred years before we even discovered the first oil well!
What changed?
Comparative advantage will still work. One of my main points however that if we gain X from trade (due to comparative advantage) with transportation cost Y. If Y suddenly becomes greater than X, why trade that particular product?? Furthermore, we are probably dependent on some products that would qualify in this example.
If we can have an infinite growth rate against a finite resources base, nothing will change (other than perhaps the climate).
If we do live in a finite world, an ever greater percentage of the national income will be spent on food and fuel, which will cause spending on discretionary goods and services to fall.
I simply offer the following advice, which you may of course follow, or ignore, as you wish:
Try to live on half or less of your current income.
Try to minimize the distance between home and work to as close to zero as possible, and commute by walking and/or mass transit.
Try to become, or work for, a provider of essential goods and services.
A case history of forced energy conservation follows. What happens when the following situation moves up the food chain: "Soaring energy prices are moving those necessities out of reach, reversing hard-won economic strides."
http://www.energybulletin.net/22775.html
Published on 18 Nov 2006 by Wall St Journal. Archived on 23 Nov 2006.
As Fuel Prices Soar, A Country Unravels
by Chip Cummins
How long ago was it that global trade was sailing ships and 'Empire'?
I recall from the 80s that a Japanese company - I think it was Fuji Heavy Industries flying the Subaru flag???? - made an industrial size catamanan or wide body type sailing cargo boat with hydraulic actuation servo sails and an auto sailing system for testing in the Pacific. As long as you don't mind the backhaul going via Hawaii, it would move a lot of stuff from Japan to NA. At some point, the question arises...
Anybody remember this? I may be confusing it with the Subaru freighter that Subaru down the side.
There have been several attempts to ressurect sail propulsion for cargo ships, but none of them have really gotten very far.
While you can greatly reduce the labor involved by using all sorts of high-tech controls and airfoil sails, the inherent drawback of sail propulsion still remains: you often have to take a longer, more roundabout route to take full advantage of wind direction and speed. This results in a trip of longer duration, and that eats into any savings in fuel. (There have been many accounts of large windjammers taking over a month to go around Cape Horn from east to west because the wind just wouldn't cooperate.)
Of course, this is less of a problem with a ship that is primarily engine-powered and uses the sails only as a boost when the wind is right. During the period of roughly 1850 to 1890 there were many ships that were both engine- and sail-powered. The main reason was that the early steam engines were highly inefficient and not very reliable. However, the marriage of steam and sail was never a very happy one: the engine and fuel represented dead weight when not in use, and the masts and sails when not in use also represented dead weight as well as added wind resistance even when furled.
The other thing is scale. A 3,000-ton sailing ship was a very large sailing ship, and it took a huge spread of canvas to get any decent speed. A 50,000-ton container ship is much too large to propel soley by sail, and even an enormous spread of sail is going to produce only a small fraction of the power required.
I just have a hard time being bullish on large sailing ships.
Wouldn't it be the case that a cargo ship could simply slow down and improve fuel economy?
Yes, in principle that is true.
The energy required to move a vessel a given distance through the water increases very roughly with the square of the speed (accordingly, the power required goes up roughly with the cube of the speed). The reason it's not exactly the square of the speed is that the energy consumption has two main compontents: energy expended in overcoming friction between the hull and the water and energy expended in wave-making as the ship displaces water. The two don't vary in the same way and are dependent on hull form, so it gets a bit messy.
The trade-off, of course is between making a large number of trips per year at high speed or a smaller number of trips but with less fuel consumption. I suspect that right now, the average speed of a large container ship or super tanker is pretty much optimized to take those factors into account. I believe the average speed of a super tanker is only about 14 or 15 knots. Given its very blunt hull form, I doubt it could go much faster than this without requiring an enormous amount of additional power.
As fuel costs increase, we just might see a slight reduction in cargo ship speed but probably not all that much.
A friend who is a former merchant marine officer tells me the last ship he was on was a cargo ship running a touch over 60,000 tons. At 15 knots speed, it burned about 29 metric tons (approx 174 barrels) of bunker fuel per day. At 12 knots they burned about 15 metric tons per day.
At $270 a metric ton, the fuel savings from slowing from 15 knots to 12 knows would be $3780 per day. However, trips would take longer (about 4 days from Los Angeles to Shanghai, for example). Less fuel per day, more days burning fuel. LA to Shanghai the savings in fuel would be somewhere around $37,000. Fuels savings could, however, be offset by added costs in other areas of operations resulting from slower transit times.
IIRC, in the heyday of the fast "clipper" sailing ships, the record for the shortest time for San Franciso to Honk Kong was about 30 days, for an average speed of a bit under 8 knots. Modern technology applied to sails and sail handling and such could add a bit to that, but I suspect sail-powered cargo ships would not average much over 10 knots.
FWIW, when I was on an oil-fired aircraft carrier we used to burn 2500 to 3000 barrels a day, depending on the available wind and the amount of time spent conducting flight ops. We normally averaged 13 to 15 knots. At max speed (above 33 knots) we burned somewhere around 24,000 barrels a day or about 5 feet per gallon.
thank you for that info. out of curiousity - how many days of fuel can fit on an aircraft carrier (how often do they need to refuel?)
Of the 12 carriers that the U.S. has in service all but 1, the USS Kitty Hawk (Due to be decomissioned in a year or 2), are nuclear powered.
The fuel constraint for them would be the jet fuel they carry for their aircraft, which is on the order of 3 million gallons.
The CV-63 class of which the Kitty Hawk is one has an official range of 12,000 nautical miles at speed of 20 knots. At that rate it would need to fuel every 25 days
Great essay!
I especially appreciate your mention of capital mobility; this is not something that Ricardo anticipated and it very much changes the equation. The ability to rapidly move capital(and the actual industrial plant) deprives regions(and the workers who live there) of the benefits of comparative advantage; all the benefits accrue to the owners of capital. Just another breach of the social contract.
Wait - doesn't Ricardian analysis strongly imply the movement of capital?
In the example given, the cheese industry ends up entirely in Wisconsin. Cheese plants in North Carolina must be closed. In addition, cheese production in Wisconsin increases, implying a probable requirement for more physical plant. This makes relocation of plant equipment conceivable, although it depends on how much of the North Carolinan cheese industry can be profitably salvaged.
In a weaker sense, I would expect that at the minimum, it will be more profitable to produce cheese in Wisconson, and investment will follow that profit out of North Carolina.
Are you arguing that this indicates a failure of the social contract because (1) North Carolina no longer benefits from the cheesemaking industry or (2) Wisconsin derives no benefit from increased cheese production? I see no other way that the owners of capital can receive all the benefit.
What the post needs are some real dollar numbers on transportation costs for imports. From the graphs, you can, however, surmise that air freight has a poor future, except for essential goods with a high value and low weight. You could also predict that non-perishable goods transported from Asia by ship will not lose their comparative advantage until oil prices are extremely high.
Here's a quick back-of-the-envelope calculation for marine transport:
- 411 BTU/ton/mile (per Nate Hagans' post)
- 130,000 BTU per gallon of fuel oil
- Fuel oil at $2.50 per gallon
- Trip from China - approx 6,000 miles
Fuel expended = approx 19 gallons per tons
Cost of shipment from China = approx. $48/ton
A ton of iPods or cell phones might be worth a couple hundred thousand dollars, so even if fuel quadruples in price, it is not going to have much of an effect on the import of such high-end items. But it might put a crimp in the import of stuff like plastic swizzle sticks, though.
This effect might be more significant than it at first might look, as countries like China have a greater competitive advantage in making the labor-intensive, low-value crap. If they can't export the low-end stuff due to fuel, they could be hurt pretty badly.
I have to agree with you. Even if you transportation cost increased by an order of magnitude, few products that we actually NEED would get much more expensive. The low-value ones that would, we can live without. The hardest hit nations will be those which export fruits and other low value/weight agricultural goods (that might include the US...). China will be fine for two reasons: first, they are already building internal markets which will fan much of the demand in the coming decades, second, they are set on producing high quality goods and have numerous succesful programs going to take leadership in the production of these in the future (I have seen much more interesting high quality cell phones for exclusively Chinese sales at electronics trade shows than can be bought in any store in the US, this development is similar to Japan which has a very different set of products for their home markets than for export). China understands where this ship/train/truck is heading and its goal to become a country that can hold its own in any comparison with the US/Europe/Japan is perfectly compatible with rising transportation cost.
I think Nate must be seeing the writing on the wall, himself, by chosing as examples Wisconsin and North Carolina. Unless we'll have more transportation on trains between states, interstate commerce will suffer, because getting high quality goods from China to California on a ship will always be more profitable than getting potatoes from the East to the West Coast on a truck.
IP,
Actually, yours is a double whammy.
Please allow me to parse out the issues:
1. Price versus criticality of supply,
2. Price versus marginal utility
In the case of analyzing item number (1) Price versus criticality of supply, one should not fall into the economics "framing" trap of confusing price with security of a steady supply. Say the price of global oil drops to $40/bbl --just for fun; BUT a new big hurricane Cathrina (Katrina's sister) hits the USA Gulf Port area and wipes out the USA ability to import crude via that route --or a terrorist bomb blows out the LOOP --whatever.
The global price of oil should actually drop because there is one less global customer for that stuff --the USA.
However, inside the USA catastrophe would strike because even though the economic "price" signal is heading down globally, you can't get any of that stuff locally. So there is a first mistake in analyzing everything purely from an economically "framed" point of view. Proportional price of an ingredient is not the problem if that ingredient is essential for the final product (or service).
Along that vein, for certain kinds of local enterprises, oil is a critical (essential) feedstock even if it does not make up a major portion of the final market price: Plastics for example. How are you going to manufacture sterile medical devices made out of plastic if you cannot get the feedstock? It's not about "price", it's really about breaking the weakest link in the chain even if that link is "low priced". The whole chain collapses anyway.
On item #2, I'll let Sailorman or one of the other economics professors explain to you why the things we "NEED" (i.e. water, food) end up being the cheapest things in a free market economy and the things of least marginal utility (i.e. tickets to see Mick Jagger's last road tour) end up being the most expensive. :-)
"BUT a new big hurricane Cathrina (Katrina's sister) hits the USA Gulf Port area and wipes out the USA ability to import crude via that route --or a terrorist bomb blows out the LOOP --whatever."
PO is not like a hurricane at all. You know about it for the past 50 years. A hurricane you can't predict two weeks in advance. You can, however, predict that there might be a hurrican and so you double up on your infrastructure (i.e. you got more than one port, multiple refineries etc.). Doubling up on oil infrastructure, on the other hand, will not do anything about PO. This is a pretty poor analogy, if you want to use it that way.
"However, inside the USA catastrophe would strike because even though the economic "price" signal is heading down globally, you can't get any of that stuff locally."
Except, of course, that a scenario where the rest of the world has oil but the US does not is about as likely to happen as that asteroid hitting earth... are we competing in a "unlikeliest of events writing contest"? I for one, am not. I see the average price of oil rising substantially over the next few years and it will rise the same for pretty much everyone who does not live in an oil producing country.
"Along that vein, for certain kinds of local enterprises, oil is a critical (essential) feedstock even if it does not make up a major portion of the final market price: Plastics for example."
What about plastics? Any organic chemist can make them for you from coal, water and a few other ingredients from scratch. You start with converting water over coal to hydrogen (and CO/CO2). Then you take that hydrogen and some more coal and make methane. You partially oxidize methane to methanol and formaldehyde. From these three single carbon compounds you can work your way up the chain to any monomer you like and produce any plastics you need. It's expensive... buy hey! You burnt all your oil in your SUV... what can I do but to tell you how to replace it with what you have? (And I only mentioned one way of going at it: other ways would start with ingredients like starch and sugars, proteins, natural rubber etc.). But before we ever start losing our ability to make valuable medical plastic parts, we will probably start mining for plastic bags in our dumps, anyway. That might be a lot cheaper for a long time than bottom-up synthesis or even synthesis from natural products.
"It's not about "price", it's really about breaking the weakest link in the chain even if that link is "low priced". The whole chain collapses anyway."
You are right, in principle. What you overlook, though, is that induestries are not one dimensional chains of events. They are more often meshes of different production methods, recipes, suppliers, etc.. There are not many things that can only be made one way. What you simply lack is the knowledge about all the different alternative ways people have figuered out to make stuff. Even two products which look alike and have the same function but where made by different manufacturers might not share a single common procedure in how they are being made. But typically unless you are in that particular industry you are not very likely to know anything about these things. That is forgivable. What is not forgivable is to make an argument that solely relies on your ignorance of how things are being made.
"On item #2, I'll let Sailorman or one of the other economics professors explain to you why the things we "NEED" (i.e. water, food) end up being the cheapest things in a free market economy and the things of least marginal utility (i.e. tickets to see Mick Jagger's last road tour) end up being the most expensive. :-)"
The things we need are by no means cheap. If that is what you think, you have little understanding about economy, yourself. Water in California, for instance, is by no means cheap. The cost for much of the infrastructure we need to supply it just happens to have been paid for by the generations of our grandparents and parents who built large parts of our water supply systems with their tax dollars. To create the farms that supply our food required the investement of lifetimes of your ancestors. They paid in sweat and hard work for it but you seem to be forgetting about that. The same is true for all our industrial infrastructure. It did not just pop up and was there for us to use. Somebody had to work for it.
In short: every substantial change of society and technology requires the lives and work of a whole generation.
Our lives will be filled with paying for the change from an oil dependent society to one that is powered by renewables. It will be expensive but in comparison to the backbreaking labor of our forefathers, it will be nothing.
How comes I know these things and you don't? Maybe you should add industrial and agricultural history to your repertoire? Economy alone doesn't quite seem to cut it.
This reminds me of Frank Herbert's Dune Chronicles:
"The Spice (Oil in this case) must flow!"
He who controls the Spice controls the universe.
He who has the power to disrupt/destroy the spice flow controls the universe.
How true it rings...
Cheers,
And in one of those continuing "coincidences," we are seeing a massive increase in the US military presence in the Middle East.
westexas syas :
And the invasion of Dune by the Emprie has begun!
The analogies with crap SciFi are only skin deep. Energy, unlike "spice", can be produced copiously using solar and wind energy. That is even more true for the US which geographically has some of the best solar sites in the world, and again is a winner. All you need to "make" endless energy is a desert and a few mirrors, a hot water boiler, pipes and a steam turbine/generator. The only "magic" here is that you actually have to do it rather than elect morons for president who waste your tax money on war.
Your cornucopian assumption ignores the huge scale (1000's of sq. mi.)of these "few" mirros, their questionable energy return (compared to petroleum), intermittency and backup, the ecologic impacts, and the lack of political will to actually fund it.
These ommissions render your fiction much crappier then one my fondest novels.
This helps put it in perspective...
I used 350 TRILLION BTUs????
Let's see... there is some 3400BTU/kWh, right? So according to this I was using 103 million kWhs last year... that would be 11.8MW of average power in my name. At 15cents per kWh, I would owe $15.4 million on my energy bill...
I guess it should have been "Billions of BTUs per person per year"?
That sounds more believable. Looks like this government can't get anything right. Or am I missing something?
"Your cornucopian assumption ignores the huge scale (1000's of sq. mi.)of these "few" mirros, their questionable energy return (compared to petroleum), intermittency and backup, the ecologic impacts, and the lack of political will to actually fund it."
Huh? Did you fail to actually inform yourself?
1000 square miles equals a 32 mile square. Please get yourself Google Earth, open a satelitte map of one of the deserts in the US and draw a 32 mile square in there with the measurement tool. Then zoom out... At what "altitude" does it become so small that it practically disappears.
Of course, you can just put a few solar panels on your roof. That would work, too. EROEI of PV is on the order of 5-10. Industrial thermal solar power plants are much better. Please inform yourself.
Energy return compared to petroleum? Petroleum does not have an energy return. Once its gone there will be no more... how do you calculate return on something that is not available? Just curious...
"intermittency and backup"
Thermal plants can store wast amounts of heat and steam at the daytime if necessary and they can be operated in conjunction with other sources, e.g. a coal burner to improve overall power plant efficiency. Solar electricity can be stored with hydroelectric storage facilities and solar energy can be used to produce hydrogen directly, from where you have any number of options to generate power during the night or when the sun does not shine. Until solar hits some 15% electrical of peak load, intermittency will not be an issue because the current power infrastructure can absorb it. Intermittance with solar generated fuels is not an issue at all because fuels can be stored.
"the ecologic impacts"
Not any worse than if you plant wheat and corn all over the midwest. Oh, that's right... aLL agricultural areas we use have already been destroyed by settlers... there used to be trees, switchgrass and bisons there...
I think we can do a lot better than our forefathers. Especially with PV on rooftops.
"and the lack of political will to actually fund it"
The political will is where the money is. Wind and solar are a $30 billion market today. They are growing at 30% year over year. Ten years down the road politicians will be standing in line to get money from these companies.
"These ommissions render your fiction much crappier then one my fondest novels."
Looks like you are not only not reading up on renewables but you also fail to have good taste in SciFi. To be honest: I think you care way more about me calling your beloved book a pile of crap than you care about energy issues...
:-)
You cornucopeans have no notion of scale. A simple calculation suggests a 1,000 mile square of sterling engines would cost $56,320,000,000--5 times greater than then the entire Gross National Product of the United States of America
1 engine per 500 sq. ft.
Cost per unit (under mass production) $10,000
88 per acre (44,000 sq. ft. per acre)
56,320 sterling engines per sq.mile (620 acres per mile)
56,320,000 sterling engines * $10,000
Your math and analysis is no better than your taste in literature. May you suffer the indignities of the gom jabbar and lie as fodder for the Shai-Hulud: the Great Worm.
US Gdp is $13,000,000,000,000. You were off by a factor of 200, however your general point is still valid (but not the worm part)
I realized that after I posted. I hope the worm-hunter doesn't notice
Let's take another cut at that. Say that each american is piggishly using about 4kW electricity steady state, all uses included. And since the sun is shining even in N Mexico only about 1/4 the time, each american pig needs 16kW rated power sitting on the ground. A production stirling engine and its rest of system will cost about 500 dollars per kW. Assume the land is free since that 3 sq meter/kW mirror provides welcome shade to all those gila monsters, and cactus don't vote.
So then the cost of plant per person is $8K. That's cheap, given that we can then go chuck all those nasty coal plants and substitute just a great big long fluorescent pink extension cord from NM to the banks of the Ohio.
Now, all you gila monsters- relax- try to read this as just a joke, huh?, I'm goin' to bed.
You cornucopeans have no notion of scale. A simple calculation suggests a 1,000 mile square of sterling engines would cost $56,320,000,000--5 times greater than then the entire Gross National Product of the United States of America
Uh, NOT. $56.3 billion is barely 1/10 of what the United States government spends on the MILITARY every year. Your argument is completely wrong, unless your point was that the United States could EASILY construct a 1,000 mile square of stirling engines by changing spending priorities.
About one year of our current land war in Asia, no?
:(
"All you need to "make" endless energy is a desert and a few mirrors, a hot water boiler, pipes and a steam turbine/generator. "
Right. So then why do people with manifestly impressive engineering deployment skills and cubic kilometers of capital spend so much freaking money on extracting oil from stupendously expensive manufactured structures over violent, cold oceans?
Wouldn't they make so much more money if they did the easy thing and put mirrors in the desert?
Or perhaps (as is true) the numbers and physics don't work out so well.
The reason solar (and other alternatives) hasn't caught on yet is this: Huge sunk-in capital in the liquid fuels infrastructure. The cost of exploring, finding and producing one extra barrel of oil even under the most extreme conditions is vanishingly small by comparison to the existing infrastructure cost (tankers, pipelines, refineries, gas stations, the ICE auto industry, airplanes...). In econo-speak, the marginal cost of one more barrel is very small, while the ability to sell that extra barrel is almost guaranteed. Profits (and losses) are made on the margin, of course.
When all is said and done PV, H2, wind - all the alternative technologies are there and available right now. The socio-economics are not, however, and will not for as long as the marginal price of liquid fuel for transportation is so low. Cheaper than bottled water...ludicrous taxation policies beget ludicrous results on the ground, both domestic and foreign (as in wars abroad).
Here is an idea: every car registered in the US gets an ATM type card which allows it to purchase X gallons per year at the current low tax price. Anything over that and the owner has to pay twice the price. Marginal pricing for marginal use.
Not to mention that fuel is not the same as electricity.
Well, what would be the marginal price of solar power in your car?
I think that there are essential and immutable thermodynamic reasons why solar power hasn't taken off with an equivalently large industry as petroleum. With an electrical grid there is similarly instantaneous demand---this grid needn't be constructed from scractch---and yet barely any solar. Wind's better, but still all wind + solar equals one large nuclear installation.
What is the cost of using solar power to make liquid hydrocarbon fuel? Make it fair--so the rest of the infrastructure is there.
"Here is an idea: every car registered in the US gets an ATM type card which allows it to purchase X gallons per year at the current low tax price. Anything over that and the owner has to pay twice the price. Marginal pricing for marginal use."
I envision many wealthy SUV users buying junk cars and parking them permanently to get their gasoline allowance.
huangrx -- I think that the analogy works pretty well.
"Spice" is not exactly analogous to "petroleum" but it is pretty darn close.
Whether we (or stuff) are moving around the planet or around town, it is generally because we have petroleum.
I am finishing up Frank Herbert's trilogy ("The Jesus Incident," "The Lazarus Effect," and "The Ascension Factor") wherein humans seem to have jumped the hurdle regarding production of energy, but are essentially in exile from planet earth because of changes in the sun.
Even though humans had learned better ways to get energy (largely electric energy) they were still plagues by war and violence. In fact, control of the food supply seemed to stand in an analogous position to "spice" or "petroleum."
Our military monitors and "secures" oil in exactly the way that spice or food are secured and used as instruments of ultimate control in Herbert's science fiction.
As WT noted, the current gathering of force in the ME is a telling move.
""Spice" is not exactly analogous to "petroleum" but it is pretty darn close."
How so? "Spice" is something that can not be replaces in the scenario of the Dune world. Oil is something I can replace today with electricity from wind and solar. Having to pay more for the same amount of energy is not the same as not having energy at all. It just seems like that if your middle name is "Scrooge" adn you are trying to be like your namesake. Thank goodness most parents don't do that to their kids...
"Even though humans had learned better ways to get energy (largely electric energy) they were still plagues by war and violence."
War and violence are not plagues. They are options people and governments pursue BY CHOICE. No war in the world was ever started by accident. All wars were started by people who opted for violence as one possible solution to their problems. And most of the time it turned out to be the wrong choice. Some people argue that it always turned out to be the wrong choice. Be that as it may... it was always a choice!
"Our military monitors and "secures" oil in exactly the way that spice or food are secured and used as instruments of ultimate control in Herbert's science fiction."
You might want to read more newspapers and less SciFi... so far oil production in Iraq is down from before the war and if we ever wanted to get a return on our investment in Iraq, oil prices would have to go to $1000/barrel. Which would kill our economy, even if we were the only ones to get cheap oil.
"As WT noted, the current gathering of force in the ME is a telling move."
It sure is telling: it tells you that you voted for a moron for president. What it also tells you is that investing the $1 trillion Iraq will cost us on energy efficiency measures would have made the US far less dependent on oil and far more secure.
I'd appreciate it if you'd back off on the aggression, Infinite Possibilities. I've not been demeaning or aggressive with you, and I expect mutual respect if we are to converse.
One can go anywhere on the Internet to exchange insults, and I don't have time for that.
I disagree that you or I can use any technology currently available to replace the energy we get from oil. We have some options for much more expensive, much less return-intensive technologies. Some of these technologies also have even worse environmental impacts than use of petroelum.
If you disagree, great, but I've not seen anything to persuade me of that at this point. Any links or info you could recommend?
The use of the military to procure and secure oil is clear. Read Michael Klare's book or listen to General Wald's recent testimony before the US Senate Committee on Energy and Natural Resources.
The US Military now functions as a security department for resource procurement and protection. Listen to the General. This "military paradigm" is also failing, according to the General's testimony. Hence, the Iraq production situation.
"Military Paradigm." General Wald used this term to describe our current energy security policy, not me. He also stated that this paradigm was not working and will not work in the future. (Like, the Senators could not already see this, I guess.) This is not science fiction or fiction. It is also not even mentioned in the Main Stream Media.
RE: "you voted for a moron for president" -- this seems like an odd insult, because I believe that you do not know who I voted for. (Or do you? If so, I'd love to know how!)
Were all candidates for US president in the past two elctions morons? Did I vote in these two elections? What do you know about this, and what is your point?
You seem frustrated. I'm sorry that you are frustrated. We all get that way... I hope tomorrow is a better day for you....
IP, it’s difficult to figure you out. Month after month, article after article the reality is spelled out, but you fail acknowledge. Oil (in current quantities) is not something anyone can replace today with electricity from wind and solar; because wind and solar are oil as well. There are no 200 foot steel tube-towers built in factories powered solar or wind. It is analogous the ethanol problem.
Use Nate’s current example for wind turbines. Steel towers; raw materials, fabrication, shipping. Multi-ton generators; raw materials, fabrication, shipping. Massive Yaw Bearing, massive Pitch bearings, Main-shaft, Transmission, Rotor, Blades. Massive copper cables, transformers, autonomous computer system, fiber optics, ad nauseum.
But we have to build the Windplant; site preparation, giant cranes, caterpillars, ham sandwiches. Then its operations & maintenance; Ford 250 pickups, employees that commute to work, tools, maintenance facility, inventory of hardware, contactors, breakers, …replacement parts from a JIT system. Return to top of page.
A while back, someone used the example of gas being stolen from ambulances as an example of what might happen with increased supply scarcity; and a good example it was I thought, of chain reaction unintended consequences. But you missed the point completely and ended up in the court system wasting more energy with subjective solutions.
You have said, often, that we are addicted to oil. In reality that just a metaphor and pretty good one, as far as it goes. Perhaps there is a better one. Let’s say a guy has two prosthetic legs; would you contend he is addicted to them? Tell him to stop his addiction and use real legs? Modern man, in current numbers, has crossed many bridges that no longer exist.
This is a real problem; a shit sandwich if you will. And without refills, the glass is in fact half empty. Wishful thinking is often mistaken for positive thinking; but it’s a deceptive form of negative thinking. That is, your confusing infinite possibilities with finite probabilities.
Stupid off-topic question here. A number of the images you posted are too large and get clipped off on the right hand side. I have the browser as large as it will go on my laptop, and still the things are clipped. Frequently the stuff on the right has the legend for the graph, or the most recent data, so it is typically the most interesting part of the image that gets lost. To view the whole thing, I have to copy the URL for the image into a new browser tab, and that is a huge pain in the neck.
How do other people deal with this? I am using Firefox, if that makes any difference, but I just checked this page with IE, and I get the same behavior.
If you use Firefox, you can right-click and View Image.
Eric
not off-topic at all. sorry you cant see the right side (and youre right-thats where the recent years are)
I dont know the quick answer - but I originally had the problem you experienced with IE but never with firefox - eventually I fixed the width of the images on my computer and submitted the story - looked ok to me.
you should be able to click on each image and it should open in a new window and keep the original story open though.
Prof Goose and I joked over the weekend that I used to spend 90% of my time in creating a post on the graphics and its now down to 70% so Im improving...;)
Not sure if this will help but the latest version IE 7 has a zoom function in the lower right corner so you can set the magnification. Fonts might be a bit smaller but if you set zoom to 75% or 80%, you should be able to see everything...
I use Opera. Occasionally an image is cut off, but both zooming out and opening the image separately by right-click are possible.
Nate, it's a really interesting article, but there is some fact-checking that got left by the wayside. Your chart Transportation as % of GDP does not deal with GDP at all. The x-axis is time and the y-axis is quads of energy.
Hence, you write that in 1960 transportation accounted for 13% of U.S. energy consumption, and today, that figure is approaching 30%. Since the y-axis doesn't deal in percentage units, but rather, in quads of energy, this claim isn't correct. It appears, even, that from 1960 to the present day, the share of transportation in U.S. energy consumption has actually decreased.
As for energy used in transportation as a percentage of GDP, we do not have enough information from this chart to make the claim that it's share of GDP has increased since 1960. I don't know if it has, and I would like to know, but we can't draw that conclusion from this chart.
These observations certainly don't overturn your argument. The argument itself is very interesting.
Matt Stone
http://theglobalbuzz.typepad.com
thanks for pointing that out - the graph label is correct but sentence prior is not - it is not % of GDP but % of energy use in America. Its being changed.
And energy use for transport HAS increased since the 1960s per the graphic. the data is in the National Transport Pdf referenced at the bottom
If you get a chance, do you mind pointing out where in that 500-page report I can find the statistics? I'm just eyeballing it here, but it appears that in 1960, the U.S. consumed 45 quads of energy, of which 13 quads were used for transportation -- or 29% of domestic energy consumption.
In 2005, it appears that the United States consumed 100 quads of energy, of which 27 quads were used in transportation -- or 27%.
These are obviously approximations from eyeballing the graph. In absolute terms, the U.S. increased its consumption of energy for transportation, but as a percentage of total energy consumed, the amount decreased (or at least flat-lined).
What I'm still trying to figure out is this conclusion:
fixed, thanks Matt.
The data is from the National Transportation Statistics 2006 pdf (Dept of Transportation) on page 269
Nate, nice article, except for certain of your unquestioned assumptions. Like the one embedded in your statement, "High oil prices will eventually make certain types of trade prohibitive." High oil prices will do this only assuming liquid transport fuel supply/demand will not change in the future by, say, development of CTL, by a shift away from more to less fuel-intense forms of transport, or by demand reduction by other means (transport electrification). Nobody knows---and I mean *knows*---how quickly things can change in any of these regards, rendering any thoughts about the future but suppositions.
I agree. My conclusion was under an assumption of the continuation of 'business as usual'. I wasnt making predictions of what will happen, only what will happen if things dont change dramatically. Its hard for me to imagine a dramatic shift from 99% of transport needing oil to 50% or less in a decade - perhaps 3 decades. So I will stand by the statement that certain types of trade will (generally) become prohibitive if oil does what Matt Simmons and some others are predicting byt 2010.
"Its hard for me to imagine a dramatic shift from 99% of transport needing oil to 50% or less in a decade."
Why does it have to be so much less? Even if your estimate for how much less energy there will be available is correct, who says we can't manage? If we cut 10% transportation out, which in my opinnion is easy, all I have to do is look at all the junk that nobody needs in the supermarket, we are down to 40%, right? Now, repackage a lot of the fluff and optimize transportation routes (including putting more containers on rail) and you might have another 10%, right? So now all we need is 30% savings in energy on trucks. Impossible? Not according to Walmart:
http://www.greencarcongress.com/2005/12/walmart_seeks_t.html
Some European trucks had efficiency improvements like the skirts installed 20 years ago.
I did a quick search for aerodynamic improvements on tractors/trailers and here is an interesting overview:
http://www1.eere.energy.gov/vehiclesandfuels/pdfs/hvso_2006/06_clarke.pdf
Obviously, the sqare Mack/Peterbuilt frame of US trucks is far from ideal. Even with these relatively minor changes 20% improvements in drag coefficient seem possible.
More details about tractor/trailer economy are here:
http://www.energycommission.org/files/finalReport/III.4.a%20-%20Heavy-Du...
There is plenty more. Obviously tractor/trailer fuel efficiency is a key issue to the transportation industry and government research.
I'll have to print this out and read it again. First thoughts --
Comparative Advantage
Great job, Nate.
Which one is Senator Brownback?
On the right, the one without a brain.
Aaaahhh...of course! Now I see! Thanks!
But wasn't it George, Dick and Karl who started us on our merry way down the corn-golden road towards that Ethan-hole City of Oz?
(Mayor)
As mayor of the Munch-thanol City
In the oil addicted land of Oz
I welcome you most regally
(Judge)
But we've got to verify it legally
To see...
(Mayor)
To see...
(Judge)
If we...
(Mayor)
If we...
(Judge)
Are morally, ethically
(Munchkin 1)
Spiritually, physically
(Munchkin 2)
Positively, absolutely
(Munchkin Men)
Undeniably and reliably dead
...
(GuLullaby League)
We represent the GuLullaby League
The GuLullaby League, the GuLullaby League
And in the name of the GuLullaby League
We wish to welcome you to Munch-thanol Land
Thank you, a very good essay.
A couple of points I noticed along the way. Notice on the chart of oil imports, many oil exporters are represented. Canada, for instance, is a net oil exporter but the chart shows significant oil imports. We, in fact, export in excess of our internal consumption needs and import the difference.
Transportation is directly responsible for this behavior. It is less expensive to export excess oil in the west and import oil from Venezuela and the US in the east.
I was a student in Taiwan in 1976. I toured a brand new GTE factory. Very clean and bright, it was assembling components for a new telephone exchange to be installed in Taiwan. The solenoid coils for the electro-mechanical exchange were wound by hand in the factory. The President related a key difference in factory processes between Taiwan and an equivalent factory in the US.
The American quality control manual stated that solenoids found defective during QA were to be discarded. However, that part of the manual had to be rewritten for Taiwan. The issue, as he explained it, was the solenoid core was made in the US and imported into Taiwan for winding by hand (Taiwan's relative advantage). The core was too expensive to throw out, compared to the cost of unwinding the core and starting over. Taiwanese workers were being paid only 10¢/hour at the time, plus a free lunch.
These are two examples of transportation's role in the cost of trade, in things large and small. Of course, while transportation is always a factor, sometimes it isn't a deciding factor, even for very small components.
Another factory I toured was an American factory run by a now defunct major US TV manufacturer. This particular factory made electro-mechanical TV tuners to be shipped back to the US for incorporation into TV sets. They made their own diodes, which in those days were still pretty big. The silicon wafers were checked by eye, twelve year old eyes. By the time those kids were fourteen they were moved to other tasks because their eyesight was no longer up to the task. Some of the relative advantage Taiwan had would simply be illegal in the US.
For some components of items we see on our store shelves, the cost of transportation may need to rise considerably before the production could return to the US simply because the conditions under which the components are made represents a significant portion of the relative advantage.
Well. You've got my undivided attention now.
Re: Furthermore, after specialization, countries lose their freedom not to trade (the chinese finger trap). They have become vitally dependent on each other...
I don't think the importance of this can be overstated. Once the bonds of utter dependency have been established, how do we back out once they are lost? Which brings me to the subject of re-localization — I'm sure what I'm about to say is going to make me very popular with some people.
Re: How Local is Local?
A thing has been made/produced locally when it and all of its component parts originate within a reasonable vicinity of the place where the thing is used/eaten, etc. The word "reasonable" qualifying "vicinity" is the hand waving part. Now, it seems as though there is hardly any such thing as local anymore — but, really, there hasn't been all throughout the Holocene (last 10,000 years). Examples abound — the obsidian trade at Catal Huyuk comes to mind for me. In the globalized world, the vicinity of manufacture & use is the whole Earth. It's a matter of degree. This has bigger implications. Since global warming is a tragedy of the commons — the whole Earth — I had to laugh when Boulder passed a local CO2 emissions tax.
There will always be trade, but that may involve only a few hundred miles, not China. However, how to break the global trade dependencies has me totally stumped. What raw materials are available within a reasonable distance of where you are? Who remembers how to do stuff? Who here could make a wooden barrel or cask? Who here remembers what people who made such barrels were called? Coopers. How do you make the transition from global to local when transportation costs cut you off at the knees?
I don't see — and have never been able to figure out — how all this is going to work.
Dave- I agree with your sentiment and that is why I wrote this. I think the answer is a combination of a)less consumption b) diversifying transportation so that oil is only one input rather than THE one and c)consuming more needs than wants.
The problem is that a generation or two of Coopers have been lost, due to this highly energy dense stuff we call oil.
Don't we still have "Mini Coopers?"
They are smaller than the regular Coopers, I guess.
One of my friends drives one, and he's tall!
Can't we just make them into barrels? You know, plug up the holes?
Everything's alright, then.
I feel fine. G'nite!
I am now intimately involved in starting a new farm from scratch. We have to relearn almost everything that our grand/greatgrand parents knew by age 10. It is astouding how many details come into play when you need to actually get something done--like provide food. And to try and do it with as little fossil fuel dependency as possible adds another layer of complexity. Who is willing to do this kind of labor? Should I hire a band of "local" Mexicans to help out some days?
Our predicament and how to disentangle ourselves from it does indeed boggle the minds willing to consider it at all.
I've reinvented the wheel daily in my project.
http://americanvalleygrowers.com/
tell me what you think
Inspiring to see what you are doing. I have so many questions.
How many years has this been going on? How many acres do you have and how many CSA members? Do you produce beyond the CSA needs and sell to local markets? How do you integrate volunteer members and do they provide efficient labor making it worth your while to include them? How are you financing the capital cost of infrastructure?
The farm here is viewable at: http://www.energyfarms.net/willits
Jason, I viewed that URL.
Are you trying to start real farming or just an educational project for children and a school?
It makes a difference.
Volunteers? Thats novel. I doubt that volunteers are helpful in the long run.
Not sure what you are about but it doesn't look like farming to me.
Its looks like a social project. That is not true farming.
I am confused. What is your mission? To feed yourselves or a school?
To show others when your not sure yourself?
You might want to get in close touch with the nearest FSA office. In my county they have numerous documents on farmlife. How to can, gardening , etc. This is through the extension service of various colleges/universities. Its all free. Soil testing costs a bit.
This is a farm at a school, so the school is interested in the educational aspects. It is also a CSA farm and a school site, so there are people who want to help out at the farm. But I don't want to have to manage a lot of volunteers so need to be careful about this. If you look at the Quincy farm site, they offer a "work for your food" program and so that is why I asked him about volunteer management.
Are you familiar with Community Supported Agriculture? It is indeed part social project.
There are different ways to start a farm. I didn't pay a lick for this land and so have lower capital costs, but more need to develop social capital to make it happen. It is right in town and so transport costs will also be very low. But the site isn't very large and so the farm output will not be huge, hence the need to keep operating costs low and build in an educational component.
Hope this helps.
I leveraged a house to finance this. This is my first year as a csa my third year into the project. I'm only taking ten members this year and will hand pick them. so we'll see. I lease three acres from a freind, he raises grass feed beef and sells it localy, a saint in my opinion. I've only got 98 beds all 5' x 50' so I call it a garden. and yes I can out produce 10 members and supply my local food co-op and work a local farmers market. I would have really liked to meet you on my trip to the coast, just didn't work out. If your ever in Quincy stop by.
by the way Quincy is in the sierra nevada, snow pack is about 4"
Thanks for more info. You are really dedicated and I admire that.
I call it a farm if you produce more than is needed to just feed or augment yourself and your family. Perhaps a mini-farm is appropriate.
We are planning on about 104 annual planting beds at 5 x 20 each but not sure we will get them all done this year as it is our first year and have plenty of things to work out. Are also putting in perennial sections.
I had a college roomate from Quincy. His family runs the True Value.
Would love to meet you if you get back this direction.
how many people does it take to plant/work 98 beds of 5 by 50??
elliot coleman claims he can take care of 5 acres himself with minimal outside hired help. I think I can plant and work these beds myself, marketing is another story. It's a hell of allot of work, but in my 39 years I,ve never been as satisfied. feeding people is um... um...well try it you,ll like it.
oh and jason the best time I had all year was when a 1st. grade class came out on a field trip the teacher said 45 min. they staid four hours. maybe the most fun I,ve had in my life. the children told me about deer getting into mom's garden and how she cried and so on, very heart warming. the things kids liked the most were potatoes and carrot, they freaked out.
so here's my next deal. Ive contacted the local community college to see if I can start a course dedicated starting local farms/food sources, so as to share in/and and make easier this crazy process. they are showing real interest
Who remembers how to do stuff?
Lots of people that don't contribute to this board know how to do stuff.
Indeed they do. It all takes time. Am I allocating my time appropriately by checking in with this site? I don't know. The information is interesting and may help me make good decisions, but then again I could be picking up more practical skills instead.
Getting to know my neighbors and what they do in their spare time has taught me something about the hidden diversity of skills out there. Just hard to figure how that may translate into a future where those skills are challenged to be necessary.
Dave,
"How local is local?" is a most excellent question, and here are a couple of answers from economics.
For bulky "low value" goods such as timber or cement, "local" means pretty darn close. We have cement plants all over the place because of freight costs, and lumber mills are numerous--placed near forests and when possible also near major markets.
Now for luxury goods such as coffee or chocolate or rubies, I think we can transport those many thousands of miles indefinitely with benefit to all concerned. Whatever is of high value and compact can be shipped half way round the world.
Seventy years ago, John Maynard Keynes observed (in a rather offhand remark that is seldom quoted): "Most goods should be homespun." by which he meant that comparative advantage and long-distance trade is a special case. The general case is that most manufactured goods can be made pretty well pretty much anywhere. Agricultural land is a special case, and that is why in Ricardo's famous example Portugal should specialize in producing wine and shipping it to England in exchange for cloth, even though absolute production costs of both wine and cloth might be lower in Portugal.
I think it is a mistake for a region or country to try for autarky (complete self-sufficiency), but security of sources of food and energy clearly is a matter of major concern.
"The general case is that most manufactured goods can be made pretty well pretty much anywhere."
The contemporaneous empirical evidence appears to be quite the opposite, especially those with complex supply chains.
I think that the reverse is more true that services can be done equally well by most people locally---manufacturing requires such a complex system of interlocking pieces, growing ever more complex with technological progress, to be effective. The accumulation of local capital further amplifies its advantage over other areas, as well as gives training to the humans employed there to develop improved manufactured goods. It is as if in Ricardo's example, England's fertile land were permanently transfered to Portugal. Does England benefit?
China appears to have an absolute production advantage in all manufacturable goods which will not change for 100 years (the US held such an advantage for a similar length of time), and as such free trade will result in destruction of external capital and deployment of such capital inside China, with the obvious transfer of prosperity. It isn't clear to me that such trade is a long-term winner for non-Chinese.
there somehow needs to be a middle ground. Perhaps call it 'marginal comparative advantage', where basic goods are met locally and luxury goods are traded internationally. Trade will continue, until the shortfall risk of not being able to produce the marginal 'necessity' at home, exceeds the benefits from trade. We are a long way extended from that point now.
And thanks for your insightful comments.
Sailorman says:
Of course, he would have said this; he was English, liked good wine, and didn't want to go bankrupt paying for it!
Ricardo chose his example with great care to illustrate the priciple of comparative advantage which does indeed apply in some cases.
Keynes was right about manufacturing. Take ship building for example: Most any country with a coastline can build good ships--England, Portugal, the U.S., and most certainly Korea and China. It would be hard to point to a particular country that is especially blessed for shipbuilding or car building or building most any manufactured good. That of course, was Keynes's point: Knowledge is mobile, and so is capital; labor can be trained. Thus in most cases, goods should be homespun, because the comparative advantages are such that trade is of small benefit; unlike many economists, Keyenes recognized the large advantages from having a strong and diversified manufacturing base in a country.
Agriculture is a bit trickier, because you need a lot of land for it, and some kinds are best for certain crops. For example, it would be hard for Belgium to grow all its own wheat, and although Germany could grow all its own oranges (in greenhouses) it makes better sense for Germany to import oranges and export beer and other manufactured goods. Thus, trade in agricultural goods and some manufactured goods does make good economic sense.
And yet, what of the emprical reality that ships are being built in significant numbers only exclusively in the Far East and nearly all previous shipbuilding locations have shut down except for military production, which is maintained domestically for national security, and not economic reasons ?
If such goods are freely transportable and non culture specific, as ships obviously are, then it seems that the smallest cost differences between locations will be ever more amplified.
And what if labor is not equal? Suppose one country has political power structures which can firmly reduce the equilibrium demanded wage of laborers?
Keynes appears to have a very nice theory repudiated by nasty facts. He was sufficiently empirical that he wouldn't maintain an outdated idea in face of such. We shoudln't either.
I have a different theory (though I'm not an economist): namely that manufactured goods, because of their capital intensity and their easy substitutability, result in lower profitability for the owners of the firms, and yet when you consider their entire impacts (multiplier effect) they result in greater prosperity for the nations which embrace them. Furthermore, manufactured goods are intrinsically more liable to be improvable due to progress of science and technology than non-manufactured godos.
Let's take a most extreme example that even the hypercapitalists would love: taxation. The most profitable enterprise for the owner would be of course the ability to tax with minimal effort. And yet if everybody just taxed each other nothing would get done. Maybe such an analogous example is a 'service' with strong regulatory and other economic moats, the type of investments which give great returns to shareholders.
A fallacy of composition in reverse. Is this unreasonable?
Hence policies which encourage production and development of manufactured goods despite apparent owner-specific lower profitability will lead to greater total sum prosperity for the nation who embraces such for its citizens.
Sorry, sailorman, I meant the remark as a joke.
Oranges vs. German manufactured goods. Fair trade only works if it is balanced.
In the 1920-30's the best oranges in Europe came from Jaffa in what was then called Palestine. Because of the rise of Hitler and restrictions in reichsmark foreign exchange transactions, many Palestinian orange growers that exported to Germany improvised. Some became auto dealers: they were paid by barter in Mercedes cars, even then considered some of the finest, most expensive cars in the world. What do you think the price of the best Mercedes model was, in tons of oranges, wholesale? Two.
In today's prices, it would mean that oranges were priced at around $5-10/kg. Today oranges go for just 30-40 cents/kg wholesale. The same analogy applies for just about any agricultural product, anywhere in the world.
I will let everyone come to their own conclusions about comparative advantage, trade and Ricardo - who did not for a moment imagine or dare suggest that "oranges" should be grown in Germany with a heavy subsidy so that natural comparative advantage producers would be forced to accept pittance prices for their own production. Modern day equivalent: sugar in the US. Look it up.
Sorry, the last paragraph may be misconstrued as a criticism to Don where none is intended. I meant to say that today wealthy nations do indeed "grow oranges in Germany" by heavily subsidizing domestic agricultural production and thus keep food prices too low, to the detriment of nations that possess a natural advantage in, for example, sugar production. The US imposes stiff sugar import duties, though it is not the best place to grow sugarcane, a tropical plant. The EU does the same thing, making sugar out of beets.
Decimals..decimals...the correct tonnage for oranges was twenty.
Belgium actually exports a lot of agricultural products (they also import a lot, but mainly as animal fodder). 3/4 of the Belgian GNP is generated through international trade; however, this merely illustrates the obviousness of the EU: 4% of international trade is with the US, 1% with Japan, 15% with other non-EU-members. Belgium's (and the other Low Countries') comparative advantage mainly consists of being the crossroad between the UK, France and Germany.
Alexander Hamilton was a well-respected voice in the affairs of this republic during its early years. This quote, by that one-time Treasury Secretary seems particularly suited to the subject of the current thread, especially in the context of relocalization:
"Not only the wealth, but the independence and security of a country, appear to be materially connected with the prosperity of manufactures. Every nation...ought to possess within itself all the essentials of its national supply. These comprise the means of subsistence, habitation, clothing and defense."
This is as worthy an objective in the 21th century as it was early in the 19th. IMO the cost of having lost our economic independence in the age of global trade is absolutely tragic. Pat Buchanan, in "Where the Right Went Wrong" noted that in 2003, Pentagon procurement officials opposed a law that mandated a 65% domestic content in U. S. weapons. I am not aware that such a law was passed.
ELP is great!
Cheers,
-- Mort.
Why should a nation-state have all its manufacturing within its borders? Should every state/province/department have all necessary manufacturing within its borders? How about every county?
I was startled to read recently that California is importing gravel, yes gravel, by ship from British Columbia. More information here and here . During the recent Canada-US softwood lumber dispute, British Columbia industries had some success developing the Asian market for timber. Then there's the interesting transboundary market between Canada and the US for raw logs, which go south in the west and north in the east. As local goods become scarce, it looks as if the benefits of shipping even bulky, low-value added products over longer distances can become attractive.
2. High oil prices will eventually make certain types of trade prohibitive.
3. Those nations, regions, communities and families that produce lower on the left graph and consume lower on the right graph will have an advantage when transportation costs increase. Those communities using predominantly rail and water transport will have advantages over those more dependent on truck and air, everything else being equal.
I agree---but I think the consequences are different from what many people assume.
As oil depletion continues and prices rise, the increase in general poverty will mean that the low-cost producers will have even higher advantages. People will be less willing and able to 'subsidize' production of potentially higher-quality artisinial goods made in higher-wage areas, even if they have intangible benefits.
To be concrete: the cost in oil of shipping enormous freighters of Chinese goods to Western ports is very low compared to their value. Large container ships are very fuel efficient, especially relative to the value of their cargoes. Indeed, often the value of one or two cargo loads is worth more than the entire ship itself, not just its fuel bunker.
But the cost in oil of transporting those goods in small numbers to diverse, and especially rural/semi-rural stores, will be quite high.
Many people of ecological sensitivity promote the fantasy that a post-peak-oil world will encourage some kind of return to happier, more decentralized "crunchy" lives in outlying areas.
It just isn't so. Let's look at current 3rd world countries who have to pay international prices for oil; for most people there the effects of high oil prices has already hit.
The pretty universal model is that rural areas are abjectly poor with a miniscule proportion of landowners making the significant profits. There is employment (for physically fit men), but at miniscule wages and in poor conditions, with local police in the pocket of the powerful.
The center of major cities are where the rich fraction lives, surrounded by suburbs of marginally employed former middle-class people and then even worse off unemployed people surviving in squalor. Crime is horrendous.
If transportation oil is expensive then the desirable parts will be those close to rail infrastructure and power and jobs, and that means central cities. The wealthy people will outbid the rest in order to live there.
"As oil depletion continues and prices rise, the increase in general poverty will mean that the low-cost producers will have even higher advantages."
First fallacy: you implicitely assume that higher oil prices mean more poverty. Where would be the proof, please?
"People will be less willing and able to 'subsidize' production of potentially higher-quality artisinial goods made in higher-wage areas, even if they have intangible benefits."
A higher quality good is not necessarily "artisinal" in nature. The Chinese are not producing artisinal goods like silk designer robes instead of cheap plastics parts but they produce high tech goods instead of low tech goods. They can do this because they can now afford to invest in complex production facilities, have well educated engineers to run them and can profit much more from the higher earnings on high tech vs. low tech products. This is not driven by oil price at all. They will continue this strategy no matter what happens in the energy markets. The (business) world has many dimensions and none of the important ones are labeled "oil price".
"It just isn't so. Let's look at current 3rd world countries who have to pay international prices for oil; for most people there the effects of high oil prices has already hit."
Developing countries suffer from a lack of education, infrastructure and economic opportunities for their people. They were in trouble before oil went up. Please, please, people, do not portray the developing world as having been this happy place before gas went to $3 at the pump. It's simply not true. It is also not true that a developed nation falls from grace and becomes like a developing nation just because has gets a little more pricy.
"If transportation oil is expensive then the desirable parts will be those close to rail infrastructure and power and jobs, and that means central cities. The wealthy people will outbid the rest in order to live there."
Huh? The wealthy will want to live next to the railway???? That is a funny thought. Let me know when the real estate prices on top of the hill start to fall because the rich are moving to the other side of the street. I am in the mood to buy that now useless six bedroom, five bathroom mansion!
"First fallacy: you implicitely assume that higher oil prices mean more poverty. Where would be the proof, please?"
In the absence of a substitute of superior potency, convenience and value, it seems to be self-evident, no?
OK, less available oil will result in more poverty than would otherwise be there.
Didn't the availability of inexpensive petroleum contribute greatly to economic growth and increase in wealth?
I agree with your description of Chinese moving up in quality an added value but they still will enhance their cost advantage with low cost goods.
"Developing countries suffer from a lack of education, infrastructure and economic opportunities for their people. They were in trouble before oil went up. Please, please, people, do not portray the developing world as having been this happy place before gas went to $3 at the pump. It's simply not true. It is also not true that a developed nation falls from grace and becomes like a developing nation just because has gets a little more pricy"
I don't portray the developing world as being this happy place before expensive gasoline. For much of the developing world without subsidized domestic oil, petroleum was alwyas rather expensive for most people if they had to pay international prices and I think that development patterns reflect that reality.
I do think that if, for example, gasoline were 5 cents a gallon and had little environmental impact the developing world would be significnatly wealthier than they are now. Transportation, and fast reliable transportation, contributes to wealth.
"Huh? The wealthy will want to live next to the railway???? That is a funny thought. Let me know when the real estate prices on top of the hill start to fall because the rich are moving to the other side of the street. I am in the mood to buy that now useless six bedroom, five bathroom mansion!"
The wealthy want to live within walking distance of a well-maintained metro, of course---and a few blocks (not miles) away from an open rail line.
The super rich can do whatever they want, but there will be many more affluent people who still need jobs. It isn't necessary to look just at the third world but also Europe as well, which has taxation-induced high personal fuel prices. High real estate values, a decent proxy for desirability in a market economy, are concentrated in the major cities with developed transportation infrastructure, including significant rail links, short and long distance----significantly more so than the U.S.
Why is that? If private motoring is expensive then geographical locations which can minimize the need for doing so while preserving the ability to make a good income are favored. It's pretty obvious, no?
Similarly the desirability of living in "the boondocks" will continue to decline as the cost of getting around, entirely petroleum dependent, will continue to rise without any obvious reason to believe outlying incomes will increase in general to compensate. Those people now already spend significantly greater fractions of their income on fuel because of the greater distances.
For those interested in how new political developments are affecting the world of green automobiles, check out the Green Machines Road Trip (http://www.greenmachinestour.org/). It follows the story of a team of green bloggers that travel from Minnesota to Michigan writing about how fuel-efficient vehicles have been and will continue to transform America’s heartland. Also, provides links to commentary on the politics of green machines (http://www.dailykos.com/storyonly/2006/12/24/17371/067)
Plus there are the occasional negative externalities from large amounts of long distance transport, like today's container ship accident
Hi.
I'm first time poster and english is not my mother tounge so bare with me :-)
This post was very interesting and I wonder if there are any ecomics among you that could
spare some time and develop some thoughts about how the economy will be effected.
As far as I can tell it all points to the fact that inflation should be soaring and the theory behind Central banking and 'Inflation expectations' will be in deep trouble.
What about interest rates ?
My guess would be that a world-wide reccesion will be the first (long before the Spark Plugs will be missed) real sign of Peak Oil.
Can anyone even afford Spark Plugs in such a scenario ?
Any thoughts ?
Recession combined with inflation is likely to be a result of Peak Oil. In the nineteen seventies, when the price of oil soared to record levels (in real terms, correcting for inflation) economists coined the term "stagflation" to describe the combination of inflation and recession (or stagnant economic growth).
Two things nobody knows:
1. How bad the recession will be.
2. How bad the inflation will be.
As far as money is concerned: fiat money = debt, i.e. dollars are created by the creation of debt. If concentrated energy resources such as oil and gas go into permanent depletion mode, people by definition will have to consume less of everything (energy = everything). Debt growth will slow and then go into reverse, i.e. there will be less money around. First we will get disinflation and then deflation.
Damn. Great article; thanks for building it.
Time for some humour. The disconnect between "knowing how to make things" and the service-based pseudo economies sprouting up everywhere is captured in this rather long story (no offence to real software guys ;-)) :
An ambitious software engineer finally decided to take a vacation.
He booked himself on a Caribbean cruise and proceeded to have the time of
his life. At least for a while.
A hurricane came up unexpectedly. The ship went down and was lost instantly.
The man found himself swept up on the shores of an island with no other
people, no supplies, nothing. Only bananas and coconuts.
Used to four-star hotels, this guy had no idea what to do.
So, for the next four months he ate bananas, drank coconut juice, longed
for his old life, and fixed his gaze on the sea, hoping to spot a rescue ship.
One day, as he was lying on the beach, he spotted movement out of the
corner of his eye. It was a rowboat, and in it was the most gorgeous woman he had ever seen.
She rowed up to him. In disbelief, he asked her: "Where did you come from, and how did you get here?"
"I rowed from the other side of the island," she said. "I landed here when
my cruise ship sank." "Amazing," the software engineer said, "I didn't know anyone else had survived.
How many of you are there? You were really lucky to have a rowboat wash up
with you."
"It's only me," she said, "and the rowboat didn't wash up, nothing did."
He was confused, "Then how did you get the rowboat?"
"Oh, simple," replied the woman. "I made it out of raw material that I
found on the island.
The oars were whittled from gum-tree branches, I wove the bottom from palm
branches, and the sides and stern came from a eucalyptus tree."
"But, but,that's impossible, "stuttered the man . "
You had no tools or hardware? how did you manage?"
"Oh, that was no problem," the woman said. "On the south side of the
island,there is a very unusual strata of exposed alluvial rock. I found that if I fired it
to a certain temperature, it melted into forgeable ductile iron. I used that to make tools, and used the tools to make the hardware. But enough of that....Where do you live ?"
Sheepishly, the man confessed that he had been sleeping on the beach the whole time.
"Well, let's row over to my place then," she said. After a few minutes of
rowing, she docked the boat at a small wharf. As the man looked onto shore, he nearly
fell out of the boat. Before him was a stone walk leading to an exquisite bungalow
painted in blue and white. While the woman tied up the rowboat with an expertly
woven hemp rope, the man could only stare ahead, dumbstruck.
As they walked into the house, she said casually, "It's not much, but I
call it home. Sit down, please. Would you like to have a drink?"
"No, no, thank you," he said, still dazed. "I couldn't drink another drop of coconut juice." "It's not coconut juice," the woman replied."I have made a still, How about a Pina Colada?"
Trying to hide his continued amazement, the software engineer accepted, and they sat down on her couch to talk. After they had exchanged their stories, the woman announced, "I'm going to slip into something more comfortable.Would you like to have a shower and a shave? There is a razor upstairs in the cabinet in the bathroom. " No longer questioning anything, the man went into the bathroom. There in the cabinet was a razor made from a bone handle.
Two shells honed to a hollow-ground edge were fastened to its tip, inside a swivel mechanism. "This woman is absolutely amazing," he mused.
"What next ?" When he returned, the woman greeted him. She beckoned for him to sit down next to her.
" Tell me," she began suggestively, Slithering closer to him, brushing her
leg against his,"We've both been out here for a very long time. You've been lonely.
There's something I'm sure you really feel like doing right now, something
you've been longing to do for all of these months." She stared into his eyes.
He couldn't believe what he was hearing - this was like all of his dreams coming true in one day
"... You mean...," he replied, "I can check my e-mail from here?"
That is a great new version of an old joke, written before personal computers, that used to end with, "You mean you have a set of golf clubs too!"
LOL.
But I bet there are some software gurus out there still scratching their heads and wondering where the punch line is. :-)
Nate, there are two basic pieces of info missing here: 1)what is the ratio of fuel cost to cargo value, and 2) what substitutions are available for oil?
1) One post by OilLearner provided some useful info: a 60,000 ton ship uses 29 tons of fuel oil at 15 knots, at $270/ton for 216 days, for a total cost of $125,280. Now, assume 45,000 tons for payload, and a payload of cars. The cars might be 1.5 tons and cost $20,000, for a value of $13,333 per ton ($6.67 per pound) and a total payload value of $600 million.
That gives a ratio of $125,260 to $600M, or about .02%.
So, if the cost of oil triples, the cost of transportation rises to .06%. If that seemed too high, they could cut it to .03% by slowing down from 15 knots to 12, at a cost of increasing travel time from 16 to 20 days.
I don’t see this as a barrier to transportation from Asia to the US. I think depletion is going to reduce other things first. Water shipping will be the last refuge for fossil fuels, and can hold on for many decades while other things go to alternatives.
OTOH, If you do the same calculation for lower value goods, or less efficient transportation, it won’t change much. Reduce the value of the goods to $.67 per pound, and increase the cost of fuel by 10x per pound-mile, and you’re still only at 6% of the value of the goods after a tripling of fuel prices.
2) There are a lot of substitutions for oil. Coal has half the btu’s per pound, and is much less convenient, but it’s perfectly workable for shipping (shipping went to oil because it was denser and more convenient, not especially for cost reasons). More importantly, rail can be electrified (and powered by renewables), and trucking can go inter-modal (most miles by rail, last few miles by truck). Short haul shipping can be electrified easily: batteries have already recently become economic for short distance, high mileage fleets at $2.50/gallon fuel, and will become more economic with higher fuel prices. While not needed, it’s worth mentioning that wind (automated high altitude kites) can easily be used for water transportation to reduce fuel useage by 50-60%.
Nick - there was alot more missing than that -this is a huge topic and data is not easy to come by - I just wanted to give a broad brush view that our goods system is dependent on oil in ways we might not normally think of.
True, but that assumes that once the ship lands there is an economical route to get it to its final destination - the PORTION of the trip by boat is still relatively cheap, but then if its trucked to wisconsin, it might cause certain products to fall out of the market, at least at cheap prices.
See Chris Vernons piece on Peak Oil and Climate Change.
Also, my take is that you are right - there are alternative transport methods, but we need to change to them now - this will quickly become something other than a theoretical exercise.
Interesting wind idea - I dont know anything about that? Kites can haul ships?
I'm sure it alreay has. The jump in oil prices over the last few years must have made transportation of some goods more expensive. We just pay a bit more or get a bit less.
I agree that this is likely to become much more important in the future. In fact, I see this as a way to balance the shrinking EROEI from energy sources available to man. We have to have a lower EROEI life.
I would guess that some aspects of this will be so easy we don't notice (i.e. blueberries in January) and some so horrible we can't imagine them (strvation in poor countries). The big picture is impossle to see in advance.
By the way, I do know that the cost of shipping sugar and coal can be 1/3 of the value of the product. I would guess that fuel could average a third of that (although it depends a lot of shipping rates, oil prices, and the age and type of ship). I have access to data on this and can track it down. Will post or email.
Please do post the data - it would be very interesting.
" I see this as a way to balance the shrinking EROEI from energy sources available to man. We have to have a lower EROEI life."
Are we agreed that "shrinking EROEI" applies only to fossil fuels, not to renewables like wind & solar?
I don't think that the EROEI of renewables is shrinking, but since, in many cases, they have a lower EROEI than traditional oil resources, they do represent a part of a transition to a lower EROEI future.
But wind and solar have a perfectly good E-ROI, and they're sufficient to provide all of the power we'll need, yes?
I do think that solar and wind can have very good EROEI. I am not sure that they will be able to provide all of the power we need, especially when we need more power because cars are electric.
I suspect that we will always use some oil and other fossils fuels. I also think that other renewables, i.e. biomass, will be in the picture.
So, it may be possible for us to transition to a future with an energy supply EROEI not too different from what we have now. I tend to doubt it is realistic, but won't write it off.
I, however, do believe that we can have an equally good life and economy with a lower overall EROEI.
Ok, I believe our thinking isn't too far apart. A few thoughts:
Wind and solar both scale quite well. A study by Stanford researchers for NASA found 72 terawatts of average electrical production potential, which can be compared to total world electrical production currently of about 1.7 TW. Total world energy consumption equals the equivalent of about 4 TW.
see http://news-service.stanford.edu/news/2005/may25/wind-052505.html
So, there's more than enough wind, and at a E-ROI of around 60 and a cost of about $.06/kwhr (and falling), it's energy and cost effective.
Solar has a max of about 100,000TW per year, though it still needs to get cheaper to compete well with wind.
Intermittency is still a problem, which is why I doubt the best mix of renewable energy will include more than about 1/3 wind and solar each, but I wouldn't propose each of them as the single silver bullet. Though...you could do it if you had to: it would just not be the cheapest solution.
I agree that biomass will be in the picture, perhaps providing 20% of energy needs. I imagine we'll use FF's for quite a while, too, though I suspect at some point there will be a decision to discontinue them.
As far as cars go, EV's and PHEV's actually make renewables easier to deploy, as their charging is easily scheduled and used to mitigate intermittency. The more EV's, the faster we move to renewables.
"True, but that assumes that once the ship lands there is an economical route to get it to its final destination - the PORTION of the trip by boat is still relatively cheap, but then if its trucked to wisconsin, it might cause certain products to fall out of the market, at least at cheap prices."
I would think that would apply to all goods: interstate as much as inter-country. In fact, it may be cheaper for Seattle to get their kiwi from Chile by water, than from California by truck.
This indicates that intercontinental water transport will be affected very little by peak oil, and that globalization will likely be little affected by peak oil. Are we agreed on that?
Further, I believe that rail freight will be similarly unaffected. Paul Dietz has said that "Railroads are not huge users of diesel (about 10% the usage of trucks, despite moving greater tonnage)", and "the cost of shipping freight by rail in the US is around 2.3 cents per ton-mile" (this doesn't break out energy, but it would of course be a fraction of that, so rail shipping of a ton of freight for 1,000 miles might cost $10 in energy costs currently). This is also supported by your chart which shows comparative fuel use for water shipping and rail are comparable. Does that make sense to you?
Would you agree that local delivery in dense areas is pretty energy efficient?
I think that leaves interstate trucking, and rural delivery. I would expect trucking to be very strongly affected, and rail freight to expand greatly. I agree that will take a while, and create real transitional pain, which deserves good planning to mitigate.
On using wind propulsion to cut long-distance shipping costs by 10- 50%:
http://www.greencarcongress.com/2006/01/beluga_shipping.html
http://www.skysails.info/index.php?L=1
It's astonishing what can be done with modern materials, computer-aided design, and electronic control systems, to turn the old new again..
Why don’t you start by giving that chainsaw a rest? That way the firewood will yield much more energy: it’ll warm you when you saw it by hand and when you burn it (grin).
Anyway a great post wrapping up a series of important concepts.
thanks Luis.
A paper Im writing is on Multicriteria analysis - using several, differently weighted criteria to compare an energy (or other) process. Instead of just comparing BTU to BTU, we also have to look at impact on land, labor (time), water, soil, etc.
Though I agree with you on the chainsaw, the time it would take me to chop a chord of wood by hand would have precluded me from writing this post. So in effect I personally have a comparative advantage in writing about comparative advantage. That fact plus $2 will buy me a bowl of soup...;)
Nate,
Bravo, very well done. I reached the same conclusion in Peak Oil and the Preservation of Knowledge.
http://www.energyskeptic.com/PeakOil_and_Preservation_of_Knowledge.htm
I think computers will be one of the first complex objects to go, not only from the complexity of making chips, but the requirement for .999999 percent or more purity. If computers wink out, that will make things a bit rough. War, piracy, and theft of anything of value will further gum up the international trade gears.
Nate,
One last thought: the chinese fingertrap of international trade may be our best hope for international peace. The more intertwined are our economies, the less we'll risk disrupting them with war.
Even now, you can see this dynamic between the US and China: both depend on each other too much to risk open conflict.