Evidence that Oil Limits are Leading to Limits to GDP Growth
Posted by Gail the Actuary on July 19, 2012 - 4:09am
The usual assumption that economists, financial planners, and actuaries make is that future real GDP growth can be expected to be fairly similar to the average past growth rate for some historical time period. This assumption can take a number of forms–how much a portfolio can be expected to yield in a future period, or how high real (that is, net of inflation considerations) interest rates can be expected to be in the future, or what percentage of GDP the government of a country can safely borrow.
But what if this assumption is wrong, and expected growth in real GDP is really declining over time? Then pension funding estimates will prove to be too low, amounts financial planners are telling their clients that invested funds can expect to build to will be too high, and estimates of the amounts that governments of countries can safely borrow will be too high. Other statements may be off as well–such as how much it will cost to mitigate climate change, as a percentage of GDP–since these estimates too depend on GDP growth assumptions.
If we graph historical data, there is significant evidence that growth rates in real GDP are gradually decreasing. In Europe and the United States, expected GDP growth rates appear to be trending toward expected contraction, rather than growth. This could be evidence of Limits to Growth, of the type described in the 1972 book by that name, by Meadows et al.
Figure 1. World Real GDP, with fitted exponential trend lines for selected time periods. World Real GDP from USDA Economic Research Service. Fitted periods are 1969-1973, 1975-1979, 1983-1990, 1993-2007, and 2007-2011.
Trend lines in Figure 1 were fitted to time periods based on oil supply growth patterns (described later in this post), because limited oil supply seems to be one critical factor in real GDP growth. It is important to note that over time, each fitted trend line shows less growth. For example, the earliest fitted period shows average growth of 4.7% per year, and the most recent fitted period shows 1.3% average growth.
In this post we will examine evidence regarding declining economic growth and discuss additional reasons why such a long-term decline in real GDP might be expected.
Connection of GDP Growth with Oil Supply Growth
It should not be surprising to find that there is a close tie between GDP growth and oil supply growth. Oil is used in many ways, from the manufacture of goods (synthetic cloth, pharmaceuticals, chemicals, asphalt for roads), to transport of goods and people, to food production (plowing, harvesting, weed killers, diesel irrigation), to operating construction equipment, to mining. While it is possible to substitute away from oil in some situations, or to find more efficient ways of using the oil, we have literally trillions of dollars of machinery in the world that uses oil right now. Because of this, the rate of substitution away from oil is necessarily very slow.
James Hamilton has shown that in the United States, 10 out of 11 post-World War II recessions were associated with oil price spikes. He has also published a paper specifically linking the recession of 2007-2008 with stagnating world oil production and the resulting spike in oil prices. I wrote an academic paper, Oil Supply Limits and the Continuing Financial Crisis, explaining some of the connections I see involved.
One connection between oil supply and the economy is the fact that when oil prices rise, indicating short supply, salaries don’t rise at the same time. Fuel for commuting and food (which is grown and transported using oil) are necessities, and their prices tend to rise as oil prices rise. Consumers cut back on buying discretionary goods and services, so as to have enough money for these necessities. This leads to people being laid off from work in “discretionary” industries, and a whole host of other effects we associate with recession.
Figure 2, below, shows world oil supply (broadly defined, including biofuels) with trend lines fitted to periods exhibiting similar growth patterns. It is these same time periods that I fit trend lines to in Figure 1, with one small exception. I had consistent real GDP data going back only to 1969, so stopped at 1969 rather than 1965 with GDP.
Figure 2. World oil supply with exponential trend lines fitted by author. Oil consumption data from BP 2012 Statistical Review of World Energy.
What we see in Figure 2 is a pattern of falling growth rates in oil supply rates, similar to the declining pattern we saw for real GDP in Figure 1. In Figure 2, the growth in oil supply falls from 7.8% per year in the first fitted period, to 0.4% per year in the last fitted period. The “gaps” that I didn’t fit lines to were periods of falling oil consumption. A glance up at Figure 1 shows that these periods where no line was fit (that is, the places where the black “actual” data shows through on Figure 1) correspond to relatively flat GDP periods–as a person would expect, if high prices/short supply are associated with recession.
A person wouldn’t expect the two types of growth rates (oil supply and real GDP growth) to be exactly the same. The GDP growth rate would likely be higher than the oil growth rate because the oil growth rate is theoretically depressed for several reasons: continued switching from oil to cheaper fuel (often electricity); improvements in energy efficiency; and a gradual change to more of a service economy. (Services use less energy per unit of GDP than the manufacturing of goods.)
If we compare the two fitted growth rates (world oil consumption and world real GDP), this is what the comparison looks like:
Figure 3. World Oil Supply Growth vs Growth in World GDP, based on exponential trend lines fitted to values for selected groups of years. World GDP based on USDA Economic Research Service data. Earliest time-period uses 1969 to 1973 for both oil and GDP for consistency.
Downtrend in Real GDP May Be Understated
The last thing governments want to do is to let their constituents know that the economy is currently doing less well than in the past. There are (at least) two ways that governments can increase real GDP:
1. Understate their inflation estimates. The way “real GDP” is calculated involves first figuring GDP based on how much goods and services increased during the period in question, and then “backing out” the amount of the GDP increase that was due to inflation. There is latitude in figuring out how much inflation to reflect. For example, in the early years, my understanding is that if the price of beef went up, it directly affected the calculation of the inflation rate; now, there is an implicit assumption that they buyer will be willing substitute chicken to some extent instead, keeping the inflation assumption lower and the real GDP increase (as calculated) higher. There are many other things that be manipulated as well–for example, how the cost of housing goes into the calculation. The site Shadowstats gives one view of how changes since 1983 distort reported US real GDP amounts.
2. Encourage lots of additional debt. Real GDP looks at the amount of goods and services are produced and sold, not how they are paid for. If the government sponsors a program to provide mortgages to people who have no chance of ever paying them back, and this results in the sale of more houses, this will help real GDP–at least until the borrowers start defaulting on their loans. Increases in other types of loans work to increase real GDP too, including auto loans, student loans, and government debt.
Besides increasing real GDP, increasing debt also acts to increase employment, since it takes workers to build the things that people who get the loans can now afford. In other worlds, the higher loan amounts increase employment of people who build new cars or new houses, or who teach at universities.
The problem with encouraging additional debt is that it at some point the amount of debt becomes too much for holders of the debt to service, and they start cutting back on other purchases. For example, recent graduates with a lot of debt are likely not to be in the market for new homes unless they have very high-paying jobs. So, at some point, additional debt becomes self-defeating, especially when the economy is not growing very quickly. Too much debt seems to be one of the limits, besides oil limits, we are reaching now.
Other Factors Holding Down Real GDP Growth
We live in a finite world, and this fact imposes limits. The amount of land suitable for cultivation is not expanding over time. There is limited fresh water for irrigation and other uses. In many areas, water tables are dropping. Ores are declining in quality because the highest quality ore tends to be extracted first.
Pollution, including carbon dioxide pollution, leads to attempted substitution by higher cost alternatives. It also leads to the addition of devices such as expensive filters. Both of these add costs, without increasing the amount of usable goods and services (in the usual definition) produced. Peoples’ funds for discretionary goods can be expected to drop as a result, (since funding through taxes or other approaches is mandatory) putting downward pressure on real GDP growth.
There is also the issue of how many new entrants are added to the paid labor force. If, for example, in the early years, many homemakers are being added to the paid labor force, their addition will tend to raise GDP growth, because the goods or services the homemaker creates will be added to real GDP, as well as the cost of daycare for her children, if this is purchased. Once homemakers have been pretty well absorbed into the labor force, that positive influence on real GDP will disappear. If the number of people employed starts declining (because of more retirees, or because people can’t find jobs), or fails to rise as quickly, this will tend to slow economic growth.
Oil Importers are Likely to Have Lower Economic Growth than Others
There are a couple of reasons why oil importers can be expected to have lower economic growth than other countries, especially when oil prices are high. First, oil importers have the problem of needing to pay exporters for crude oil or oil products. The revenue that is spent on higher priced crude oil could have been spent on discretionary expenditures. It is unlikely that the oil exporters will reinvest the money in the economy of the buyer of its oil–they are just as likely to reinvest it in their own country.
The second reason is that oil importers tend to be the countries like the United States and Europe that “developed their economies” early on. Since these countries have hired women in large numbers since World War II, most homemakers who want jobs already have them. If birth rates have slowed, these countries may be seeing disproportionate growth in the retiree population and fewer workers in ages where employment usually takes place.
In the United States, if we do curve fitting (of the type shown in Figures 1 and 2) to the reported number of non-farm workers employed in the United States (from the Bureau of Labor Statistics), and compare these employment trend rates with the corresponding trend rate in US GDP growth, we find a high correlation:
Figure 4. US growth in number of non-farm workers versus growth in real GDP. US real GDP from US Bureau of Economic Activity; Non-Farm Employment from US Bureau of Labor Statistics. Fitted periods are 1969-1973, 1975-1979, 1983-1990, 1993-2007, and 2007-2011.
Note that decreased growth in the number of employees could be taking place for any number of reasons–less growth in illegal immigrants, fewer homemakers going back to work, more people going to college, or more people retiring or taking disability coverage, or just generally discouraged.
It is my observation that the number of workers in the US today seems to depend on the number of jobs available. If jobs in some fields are being increasingly shipped to lower-cost countries–the ones we will see in Figure 7 are now using a disproportionate share of the world’s oil–these jobs will not be available, no matter how many workers might be willing to take them, if they were available.
If we look at the trend in real GDP growth for three major areas (United States, European Union-27, and Remainder = World minus the US and EU-27) , we discover that indeed, all three of the areas show a downward trend in real GDP over time (Figure 4, above). The GDP growth of the EU-27 and the US start from a lower level, and drop off more in the 2007-2011 period, (when the price of oil imports was more of an issue) than the “Remainder” grouping.
Figure 5. Annual growth in world oil supply compared to annual growth in real GDP, both based on exponential trend fits to values for selected years. Oil supply data from BP oil consumption data in 2012 Statistical Review of World Energy; real GDP from USDA Economic Research Service.
One reason why the Remainder-GDP may be doing better than the others is that heavy manufacturing, and the jobs that go with heavy manufacturing, are finding their way to lower cost countries. High oil prices may also be discouraging oil importers from purchasing oil. If we look at oil consumption for the three groups, this is what we see:
Figure 6. Comparison of oil consumption by area (United States, European Union -27, and rest of the world), based on BP’s 2012 Statistical Review of World Energy
Much of heavy manufacturing has been moved out of the United States and the European Union. Figure 7 below shows that the rest of the world is now using well over half of the world’s oil:
Figure 7. Percentage shares of world oil consumption based on BP’s 2012 Statistical Review of World Energy.
Going Forward
We have seen (Figure 5, above) that all three grouping shown (United States, EU-27, and the rest of the world) are showing declining real GDP patterns, similar to the world pattern. GDP growth rates of the United States and EU-27 are both at lower levels than the World and Remainder, for reasons explained.
It is hard to see why current trends wouldn’t continue, with growth in real GDP continuing to decrease for all three groups. Regardless of the hoopla in the United States press about supposed growth in oil supply, the fact remains that growth in world oil supply has been worrisome for many for roughly 40 years, since US oil production started decreasing in 1970. It is hard to believe that the latest “fix” is going to turn things around. The typical pattern in oil supply is for extraction in an area to hit a maximum (or perhaps a plateau) and then decline.
Figure 8. Crude oil production in the US 48 states (excluding Alaska and Federal Offshore), Canada, and Europe, based on data of the US Energy Information Administration.
Figure 8 shows (among other things) how steep the US drop in oil production in the contiguous 48 states was starting in 1970. This decline set the stage for the 1973 Arab Oil Embargo, since oil-producing countries now had the upper hand. Production in Alaska and in the Gulf of Mexico eventually helped offset part of the drop, but the Alaska production (not shown) is now declining as well. Change in the balance of power regarding oil production following the decline in US production, and recognition that increased imports would cause balance of payments problems, seem to have influenced the US and Europe’s decision to focus on service industries and on industries with little oil usage, holding their oil usage down (Figure 6).
Figure 8 also shows how new onshore techniques–fracking and other enhanced oil recovery–are affecting US crude oil production. While US-48 states crude oil production has shown a 25% increase since 2006, this production is still only 39% of the 1970 amount, and about equal to 1942 production. Oil production in Canada (which includes the oil sands) is rising, but not very rapidly, from a low base. It is hard for small increases such as those of Canada and the US-48 to make up for major declines in production occurring in Europe and elsewhere. World oil supply would be increasing by more than a fraction of 1% per year if changes frequently noted in the US press were really making an important difference in world supply.
Analysis of Annual Change Percentages for Oil and Real GDP:
It is also possible to look at annual percentage changes, corresponding to the ranges analyzed above. (Some people may be more familiar with this approach.) In this approach, we "lose a year." For example, the first range is five years, 1969 to 1973. But if we use annual percentage increases, the first percentage increase occurs in 1970, and there are only four percentage changes in total, 1970 to 1973. To calculate some sort of an indication (similar to, but not equivalent, to that above), we calculate the simple average of the four increases. The resulting graphs are as follows:
Figure 9. Annual percentage increases in world real GDP with simple averages for the ranges indicated, corresponding to Figure 1.
Note that percentage changes are slightly different, but follow the same pattern as in Figure 1.
Figure 10. Annual percentage increases in world oil supply with simple averages for the ranges indicated, corresponding to Figure 2. (except 1966 to 1969 us omitted to correspond to GDP ratios and amounts shown on Figure 3.)
Here again, we note a very similar pattern. Thus, the analysis on this basis seems to be similar to that using the fitted exponential trend lines.
Tentative Indications for the Future
We can use the relationships between the individual year changes in oil supply and real GDP to build a simple model showing how much of an increase in GDP can be expected to take place for a given increase in oil supply.
If we graph the annual percentage changes in real GDP versus the annual percent changes, what we see is the following:
It is clear in looking at the data that the pattern in the earliest part of the period is different from that in the later periods. In the very earliest period (1970 to 1973), oil use increased more rapidly than GDP. Once we realized we had a problem, there was a mad dash to try to reduce usage. If we look at only the period since 1983, when there was more of a sustained attempt to transfer to lower priced fuel, this is what the graph looks like.
Using only the recent data, the R2 is similar (.53 for 1983-2011 data vs. .52 for 1970 to 2011), but the slope of the line is a little steeper. While at R2 of .52 or .53 is not exceptionally high, it does explain a significant portion of the total variance, so let's look at what the indications of the trend lines are.
If the annual percent change in oil supply is 0.4% (as it seems to be now), the predicted annual increase in world real GDP is 2.5% per year using the 1970-2011 fit, or 2.2% using the 1983-2011 fit. Thus, both fits suggest that with the small increases we are seeing in oil supply currently (about 0.4% per year), we are already at a point where world real GDP can be expected to be much lower than most economists would prefer (2.2% or 2.5% per year).
The Figure 12 fit (using 1983 to 2011 data) would seem to be slightly better for predictive purposes, since it is more representative of the current situation.
If we want world real GDP to grow by 4.0% per year, the fit from Figure 12 (based on the equation y = 0.741 x + 0.0193) would suggest that world oil supply needs to rise by 2.8% per year. If we want world real GDP to grow by 3.0% per year, we need oil supply to grow by 1.4% per year.
We can also look at what theoretically would happen if world oil supply starts declining (but here we are on shakier ground, because of many follow-on effects). If oil supply declines by 1.0% per year, the regression line in Figure 12 would suggest that world real GDP can be expected still be expected to increase, but by only 1.2% per year. If world oil supply declines by 2.0% per year, the model would suggest world GDP can be expected to increase by only 0.4% per year. If world oil supply declines by 4.0% per year, the model would suggest that world real GDP can be expected to decline by 1.0% per year.
These are very tentative amounts. Clearly, if world oil supply or world real GDP starts decreasing, there will be many follow on effects, including political changes, and these may have effects of their own. Also, if it is clear that we again have a serious oil problem, there will be a mad dash to eliminate unnecessary use, and this may have a favorable impact on real world GDP.
But it is clear from these calculated amounts that we are entering a very challenging period.
This post combines two Our Finite World posts: Evidence that Oil LImits are Leading to Declining Economic Growth and How Much Oil Growth do We Need to Support World GDP Growth?
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Thanks, Gail, for another information-rich and well-reasoned post. This is autonomous research at its best. Much appreciated.
Well reasoned? I think not. Try this paragraph from the article:
These "lower-cost countries" are supposedly using a disproportionate share of the world's oil. From eyeballing Figure 7, we find that the US had 21% of global oil consumpton in 2011, the EU 16% and the Rest of the World 63%.
From the CIA Factbook, we find that the US had a population of 313,847,465 in 2011, the EU population was 503,824,373 and the Rest of the World had 6,204,017,509, for a Total World Population of 7,012,689,347. In percentage terms, the US had 4.47% of the world's population, the EU had 7.18% and the Rest of the World had 88.36%.
Combining these figures, we can calculate that in 2011 the United States consumed 6.59 times the amount of oil per capita as the "Rest of the World" category. Whose use is "disproportionate" then?
Gail's post is an example of the sort of sloppy, complacent thinking that leads to support for US imperial wars. It is exactly the same as the thinking that has the prime problem of US foreign policy being to deal with the fact that so much of "our" oil is underneath "their" sand.
The rest of the world gets by with a good deal less oil than the United States does. Perhaps, instead of spreading gloom & doom over declining oil production, Gail could study how other countries manage.
Ablokeimet you are way off base here. Gail was not talking about the "per capita" use of oil, she was talking about the total use of oil. One can clearly see that the as jobs are being shipped to the "Rest of the World", they are also getting a larger and larger share of what oil is left in the world.
In 1965 the "Rest of the World" consumed about 38 percent of the world's oil and then now consume over 60 percent.
That was obviously Gail's point and she was spot on while you are out to lunch. Your post is an example of sloppy reasoning in order to complain about something you do not understand.
Ron P.
Maybe the US should let the rest of the world consume the remainder of global URR.
Just kidding, I like your protection and BAU as much as anyone.
No, I'm not off base. I'm just very angry. You say yourself:
To consider anyone to consume a disproportionate share of the world's oil is to have an assumption (possibly unconscious) about what a "fair" proportion of the world's oil would be in the circumstances. What would be a fair proportion of oil for 88.36% of the world's population to consume? What would be a fair proportion of oil for 4.47% of the world's population to consume? If the current shares are disproportionate, what would be proportionate? I come back to this point because, like it or not, there is no other construction that can be properly placed on Gail's statement than that she believes 88.36% of the world's people are taking more than their fair share of the world's oil production and that somewhat more should be allocated to the US and Europe. As should be obvious, the degree to which the "Rest of the World" would take offence to this is pretty strong.
Now, I don't think Gail was actually meaning what she wrote - as I said, it is the result of sloppy thinking. It also has corollaries with which she is unlikely to agree. This sort of thinking is dangerous, though. There are plenty of people who would actually agree with those words as Gail wrote them - and this in a world where wars are fought for oil.
as jobs are being shipped to the "Rest of the World"
As we saw below, that's not the primary problem.
Thanks for a fantastic article Gail. I find it astonishing that most people, even most economists, cannot make the connection between energy and the economy. Charles Hall points this out in his book "Energy and the Wealth of Nations" which I have not read because of its $80 price tag. But he does summarize it in a great video: EROEI and the Collapse of Empires
Also, as you point out in this article, the oil supply is not evenly distributed over the world. For decades, we in the west, got the lions share of all the oil produced. Now the tables have been turned. Though oil production has been relatively flat since 2005, oil consumption in OECD countries has dropped 15 percent or 2.5 percent per year since 2006.
The oil supply to all importing nations is dropping. The oil supply to the developed world is dropping even faster. And the EROEI of all the energy available to the world is dropping like a rock. As Charles Hall points out in the video I link to, most economists of the world have not made the connection between energy and the state of the economy. Energy is not even part of their equations.
Why this blind spot by the world's economists?
Ron P.
I think part of the problem is the high degree of specialization of researchers, and their lack of knowledge of other fields. Each field builds on what previous people in the same field have said. The object of the game is publishing papers that are in line with what others have said, not truly advancing knowledge.
Another issue is that politicians and businesses have a very strong interest in upholding the status quo, because growth is what gets politicians elected and helps businesses pay back debt with interest. Even if someone trips across ideas such as those I have shown, they are not likely to see the light of day given the political situations. University researchers are drawn into what governments and businesses are advancing, because that is where all of the "grant money" is. If money is being handed out for research on Carbon Capture and Storage, you can bet that a lot of university professors will work on this, regardless of how ridiculous the whole concept is.
A third issue is that we as individuals all need the possibility of "happy endings". This makes the discussion of "collapse scenarios" such as discussed in the 1972 book Limits to Growth, very difficult for most people to even comprehend.
I suppose the fact that 'Limits to Growth' failed in all it's extrapolations doesn't count for anything.
Just rub the dates off, plonk in some new ones and still claim it is all 'inevitable', and the methodology is not in any way dodgy.
It is unclear which group is the one not facing up to reality.
Could you elaborate?
"I suppose the fact that 'Limits to Growth' failed in all it's extrapolations doesn't count for anything."
Gosh, Dave, I'm just wondering if you realize that your repeated lack of citations and insistence on using absolutes where none exist pretty much invalidates your credibility as a poster. Perhaps you need to work at this more, or at least adhere to the TOD Reader Guidelines.
Regarding your claim that Limits to Growth "failed in all it's extrapolations":
You say: "It is unclear which group is the one not facing up to reality."
It's quite clear to me. Sorry for your confusion.
Apparently it is quite easy to conclude that LTG was filled with errors: simply avoid reading it and decide based on your favorite pundits.
The Limits to Growth scenarios were designed not to prove that there were limits to growth. Instead, they were designed to show the behavior of a system that contained limits (overshoot). The limits were assumed by the model.
I would agree that the LTG model was useful - it showed what overshoot looked like, and showed that overshoot was possible in a model of limited resources.
It did not demonstrate that it was a model of the real world. The model was extremely simple. For instance, resources were unitary: they weren't broken down into minerals, energy, food, or anything like that: just "resources". There wasn't an explicit recognition of renewable energy - wind, solar, etc. That's a mighty simple model.
This simplicity, and the exclusion of substitution of non-limited resources for limited resource made the model very, very far from anything that might be expected to model the real world. As the authors said repeatedly, these were scenarios, not forecasts. It was treated as such by the economics community, much to the puzzlement of environmentalists who didn't understand just how limited the model was.
Was this the main point of the Limits of Growth?
I always feel that I must have read a different book than everyone else many years ago when I first read the Limits of Growth. Every comment I have ever read about it focuses on the charts and quantitative predictions. The main take away I got from the book back then was that there was a fundamental mismatch between biosystems and political sociology: democracies generally act only when there is a crisis, but by the time we get this crisis it will be too late because natural systems will be far into a chain reaction that cannot be stopped at that point. The book predicted the key reason Global Warming will wipe us out. Homo Sapiens is a fundamentally unscientific animal and therefore must produce short sighted societies.
Did anyone else get this point? I thought it was the central argument of the book and is being proven out today. I only glanced at the graphs. I think the big mistake the book made was giving a specific set of predictions or range. When some of these predictions failed people ignored the main premise of the inevitibility of ecological disaster given our limited psychological and sociological abilities- and this premise is true.
Every comment I have ever read about it focuses on the charts and quantitative predictions.
uhhmmm....mine didn't.
Yes, the model was intended to show overshoot, and one could plausibly argue that applies to Climate Change.
I'd quibble that the model didn't really anticipate Climate Change - the pollution it modeled didn't have the very long development time/lag time of Climate Change. In a sense, they "got lucky" - something happened that resembled the behavior of their model.
Worse, Dennis Meadows is out there arguing that peak Fossil Fuels will cause TEOTWAWKI.
That's ironic, given that Peak FF is far less damaging than Climate Change, and would possibly prevent Climate Change if only FF were as limited as Dennis thinks.
The major problem is that the framing is bad: Climate Change isn't primarily a growth-related problem, it's a pollution problem - it could have happened with lower growth rates, and it could have been prevented without eliminating growth.
LTG has been criticized for not anticipating a variety of things, such as increasing efficiency on the positive side and climate change on the negative side. But this, in my opinion is exactly why the very general categories used in LTG stand the test of time. Climate change falls into their general category of environmental degradation and will certainly be a serious drag (if not a total death-knell) on human civilization. It was not necessary to anticipate exactly the nature of the specific trends that developed.
And BTW there was at least one scenario they ran in the original study that had a positive outcome, or at least a steady-state outcome and not a collapse.
The model only went to 2100, so lasting to 2100 isn't really permanent, IMO. We are still dealing with a finite world.
One major thing that LTG left out is the financial system, and what its needs are. To me, the financial system is the part that gets stressed first. Leaving it out makes the model suggest that bad outcomes will play out more slowly than in real life.
Needless to say, political systems are also left out. This adds yet another dimension that can amplify bad outcomes.
We are still dealing with a finite world.
As a practical matter, in the longterm we don't face limits on available energy.
OECD energy consumption will never need to grow much above where it is now, and the rest of the world will plateau in a few decades in the same way. That plateau is far, far below the 100,000TW of solar insolation.
LTG did not fail in all its extrapolations. The authors actually mention that they are not predicting future events precisely:
"we cannot predict the population of the US, the GDP of brazil or the world production of food in the year 2015. the data we are working with are not sufficient for such predictions" (a rough translation from the German edition, so perhaps not quite what is in the English edition)
The Wikipedia page on LTG has this to say: "The purpose of The Limits to Growth was not to make specific predictions, but to explore how exponential growth interacts with finite resources. Because the size of resources is not known, only the general behavior can be explored." (emphasis mine)
If you want to look at a recent comparison of what was predicted with what is happening, then check this link: http://www.smithsonianmag.com/science-nature/Looking-Back-on-the-Limits-... - but be warned, it may upset your world view..
Thanks a million for this link Fierz. I had no idea LTG was so spot on so far. I am going to save this link and post it the next time someone starts trashing Limits To Growth.
Ron P.
This is a comparison of 1972 projections with one author's depiction of the actual experience. This does not show that TEOTWAWKI is happening or will happen, just that BAU growth curves are still continuing. This is only bad news if limits are indeed awaiting the economy around 2015, as suggested by some of the (many) LTG scenarios.
Please note that the author's curves are questionable. In particular, the "resources" curve is highly unrealistic, given the existence of resources which are much, much larger than human consumption (especially solar energy: 100,000TW of resource vs 10-20TW actual consumption).
Nick, if it's not business as usual then it is the end of the world as we know it later in the century. Every curve on the chart goes down. This could only be caused by TEOTWAWKI. Business as usual has everything going up... forever.
The authors curve of non-renewable resources remaining is very realistic. Solar is not counted as non-renewable unless you are talking the sun dying out. And your figure of Terawatts of solar power is unrealistic. That and a lot more may fall upon the earth but it's what you can realistically and economically turn into electricity or horsepower that counts?
Ron P.
Every curve on the chart goes down.
Yes, but that's still in the future, and is yet to be tested.
Solar is not counted as non-renewable
Well, that would be my choice, yet the LTG model includes all energy (excluding agriculture) in the non-renewable category. That's part of why the LTG model is so unrealistic.
your figure of Terawatts of solar power is unrealistic
That's the resource. Sure, we might only be able to capture 1% of that - that's still 1,000TW.
it's what you can realistically and economically turn into electricity or horsepower that counts
Wind and solar are scalable, affordable, high E-ROI, etc.
Wind is cheaper than new coal.
Solar has reached grid parity in many places, and even if it's a bit more expensive than coal and NG in most places, it's still very affordable.
That did it. The very idea that we might be able to capture 1 percent of the sunlight that falls upon the earth it totally and completely absurd. The area of the earth is 198 million square miles. Sunlight falls upon half of that all the time. That would mean one million square miles of solar panels.
But wait, solar panels are only 11 to 15 percent efficient. Let's give you the benefit of the doubt and say 20 percent efficient. That would mean 5 million square miles of solar panels to get the equivalent of 1 percent of the solar power that falls on the earth.
Oh well, what could I have expected? Of course a fraction of one percent would be enough. Lets say a million square miles, or only 100,000 square miles, 1/50th of one percent. Think that is possible?
Let us not get ridiculous. Throwing such absurdly large numbers around without any reasonable way to turn them into reality adds nothing to the debate. It only serves to muddy the waters.
Ron P.
The very idea that we might be able to capture 1 percent of the sunlight that falls upon the earth it totally and completely absurd.
Exactly my point: there's far too much sunshine for us to ever need or want to use up a significant fraction.
No that was not your point. Your point was that there was so much sunshine we could easily capture it and use it for power to replace oil. Contrary to what you state above, we would desperately want and need to capture sunshine and use it. But there is no way we could build enough solar panels and batteries to store the electricity when the sun don't shine and build enough electric cars and charging stations to make a dent in liquid fuel use for transportation.
Your entire point was that solar power is so abundant that it could easily replace oil. You are sorely mistaken on that point.
Ron P.
Your point was that there was so much sunshine we could easily capture it and use it for power to replace oil.
My point is that as a practical matter we won't run out of sunshine. And, that's the case.
there is no way we could build enough solar panels and batteries to store the electricity when the sun don't shine and build enough electric cars and charging stations to make a dent in liquid fuel use for transportation.
Now that's a different question. And, of course we could.
Let's break this down:
solar panels
Wind is a cheaper way to indirectly capture solar energy at the moment, so for the moment we'll maximize that - $2k of wind turbines will power a car for life.
Panels have become very affordable - Germans are installing them for $2/Wp. The average European car only drives about 13k km per year - at 5 km per kWh, that's only 2,600 kWh per year, which would require perhaps 3KW of solar panels. That's only $6k, to power the car for life. That's still much cheaper than oil.
batteries to store the electricity when the sun don't shine
For light vehicles, the battery is part of the car. That's pretty straightforward.
build enough electric cars
They're pretty much as easy to build as ICE cars.
charging stations
PHEVs and ERVS will dominate for a long time - they can displace 90% of liquid fuel, and ethanol can handle the other 10%. For EVs, most people would charge at home. charging stations aren't a big deal - they exist now in Canada (and a little in the northern US) for engine block warming.
Run out? No, but that doesn't change the fact it is diffuse and intermittent.
Europe is a special case with very high gas taxes and very high subsidies. And you seem to have forgotten the higher costs of EVs negate these savings.
So are battery costs, which you neglected. And Darwinian wasn't talking just about light vehicles, but industrial society as a whole.
Except for the batteries.
PHEVS and ERVS dominate nothing, they are a rounding error in the grand scheme of vehicle sales. And you are neglecting the fact the world's grid's can't handle the additional load. You are also neglecting the load shifting infrastructure to charge these EVs at night.
Nick, your writing is as compelling as a six grade science fair exhibit. I don't know why you keep at it. Its not like this hasn't been pointed out to you before.
Rethin,
it is diffuse
It's common to say that renewable power sources are "diffuse". Is that realistic?
No. Let's discuss the land needed for wind power:
Right now 60 acres per turbine is pretty standard (probably 1.6MW), for 37.5 acres/MW.
Farmers have often gotten about $4K per 1.6MW turbine, which meant about $40K on a 640 acre farm. 10 turbines means they only lose 5 acres of productive farmland (less than 1%), and perhaps double their net income. That's huge money for a farmer.
Conventional comparisons:
There are 525,000 operating oil wells in the US, and probably 10M abandoned or dry wells. There are 70,000 abandoned coal mines - shouldn't we include those somehow in space requirement calculations?
Regarding the land use footprint of a nuclear power station, let's fire up Google Maps and take a peek at Sizewell on the UK Suffolk coast. The site contains the now-decommissioned Sizewell A, and an American style PWR, Sizewell B, about 1.2GWe (1200MWe), which has been running happily at about 90% load factor since 1995. The scale rulers on the map indicate that the site is pretty close to 1 sq km (100 hectares). Similarly, we can cruise over to Finland, and look at the Olkiluoto site, where reactor 3, also about 1200MWe is under construction. The area per GWe is very similar to that of Sizewell. So that's ONE (1) sq.km per performing GWe, close enough.
To this we of course have to add the land use for mining and refining the uranium yellowcake.
Wind power consumes very little land - perhaps 1/2 acre per 1.6-3MW wind turbine - much less than other forms of generation, when you include fuel mining and the overall footprint of generating plants (nuclear plants can take up more than a square mile). Rooftop solar doesn't consume any land.
The Clinton Power Station is located near Clinton, Illinois, USA. The nuclear power station has a General Electric boiling water reactor on a 14,300 acres (57.9 km2) site with an adjacent 5,000 acres (20.2 km2) cooling reservoir, Clinton Lake. Due to inflation and cost overruns, Clinton's final construction cost exceeded $2.6 billion, leading the plant to produce some of the most expensive power in the Midwest. The power station began service on April 24, 1987 and is currently capable of generating 1,043 MW.
http://en.wikipedia.org/wiki/Clinton_Nuclear_Generating_Station
a wind turbine may only stand on 1/2 acre, but you can't pack them that dense, and no one wants to get perticularly close to a working wind farm either. So the land use is larger than that figure implies.
The land between wind turbines isn't "consumed" - it can be used for other things. This is clearest for farmland - the land in between can be planted quite nicely. Farmers love wind power (it brings in a lot more money than food crops), and in the US there is an enormous wind resource in farm areas. A nuclear plant, OTOH, encloses it's land for security reasons, so it's really unavailable for other uses.
The Clinton nuclear plant uses 20 acres per average MW, and a 3MW wind turbine on a 1/2 acre uses 1/2 acre per average MW. Coal and nuclear also have to add in the space used for mining - there are 70,000 existing and old coal mines in the US.
intermittent
Are we talking daily (diurnal) variation, or seasonal? Each of those is a different (long) discussion.
Europe is a special case with very high gas taxes and very high subsidies. And you seem to have forgotten the higher costs of EVs negate these savings.
Yes, Germany is farther north, and Europeans drive less, so it's a more conservative case. The economic case for solar is much stronger in places like the US, where insolation is much stronger and the vehicle miles are much higher.
battery costs, which you neglected.
No, those are included in the cost of the vehicle. Over their full lifecycle EVs are cheaper than ICEs, even with artificially low market prices for fuel, as we have in the US.
Darwinian wasn't talking just about light vehicles, but industrial society as a whole.
True. OTOH, the majority of liquid fuel consumption is by vehicles, and the great majority of that is light vehicles. Industry can move from liquid fuels pretty easily, as they primarily use electricity.
the world's grid's can't handle the additional load.
The world's utilities are eagerly awaiting EVs, as they will add load at night, when the grid is underutilized, and help deal with renewable intermittency.
the load shifting infrastructure to charge these EVs at night.
Smart meters, which are being installed as we speak, and which pay for themselves by reducing the labor needed to read meters.
six grade science fair exhibit.
I notice that your comments still have sarcasm and personal attacks. Too bad. Is it an attempt to intimidate and silence people who disagree with you, or are you just angry because you think I'm somehow doing harm? I find it puzzling - I think we're really on the same side, which is moving the world away from oil and fossil fuels.
The Clinton Power Station is located near Clinton, Illinois, USA. The nuclear power station has a General Electric boiling water reactor on a 14,300 acres (57.9 km2) site with an adjacent 5,000 acres (20.2 km2) cooling reservoir, Clinton Lake.
Oh, I have a competitor for the Nuke plant that uses the most land! Dominion Power dammed a stream in the middle of my state to build a lake 53 km^2 dedicated to cooling the plant. The plant itself is another 4.35 acres, for a total of 57.35 km^2, *just* shy of Clinton. But surely North Anna still holds the record for length, at 27 km (17 mile)?
http://en.wikipedia.org/wiki/Lake_Anna
That's a big lake!
Nick, one of the main reasons we have a liquid fuels problem now with high prices is peoples choice. In the US despite these high prices the number one selling car is the Ford F series pick-up truck. There is no hope of replacing cars like the Raptor, powered by a 411 hp 6.2 L V8, with an EV that uses...
The type of EV that replaces SUVs will need to be big and heavy, to be bought by those wanting big and heavy cars. Such a beast does not exist.
We can use a lot less liquid fuel now if everyone chose a small efficient diesel or petrol 4 cyl.
You a very good at describing a utopian world where we can do lots of things, pity we exist in the real world where we are heading straight for the energy (and economic) cliff because of overshoot and failure to plan.
Hide_away
You a very good at describing a utopian world where we can do lots of things, pity we exist in the real world where we are heading straight for the energy (and economic) cliff because of overshoot and failure to plan.
So are you saying that with very high gasoline prices ( $4/gallon is not really very high) people will prefer to loose their jobs and keep Ford F pickups, rather than car pool or commute in very fuel efficient ICE vehicles, EVs and EREVS. ??
Nick is not describing a utopian world, its a world very similar to what we have now same traffic jams, people living and working much as they are now, just using a lot less oil and an relatively small increase in electricity consumption distributed on a national grid very similar to what we have now. This is only possible because most ICE vehicles are very inefficient in using the energy content of petroleum products but electric motors are very efficient in using the chemical energy stored in batteries.
We are fortunate that cars have a relatively short lifespan, so once we start seeing real expensive gasoline(ie higher than EU prices) the shift to better fuel efficiency, car pooling and EVs will result in big reductions in oil consumption.
Isn't that exactly what's happening right how? High gas prices, people are losing their jobs and ev/erev sales are almost nonexistent.
Gas prices are very low in the US. For most people, depreciation is a much larger expense than fuel.
Hybrids, like the Prius, are also electric vehicles, and they're doing fairly well.
Yes, EVs are taking off slowly. The (faux) media are attacking them viciously, and fuel prices are artificially low ($2T oil wars, anyone?).
Still, they're available: anyone who wants to can become independent of oil for personal transportation, overnight, and reduce their overall cost of living.
That is the reality of the situation NOW!!
Nick keeps telling us that EVs are cheaper now, yet the populace is still buying SUVs. There is a disconnect between what some people say/think is possible and what is clearly happening.
Nick keeps telling us that EVs are cheaper now, yet the populace is still buying SUVs.
They're only slightly cheaper (given current artificially low fuel prices), and even realizing that is true requires a long-term view point, one that the media don't promote.
one of the main reasons we have a liquid fuels problem now with high prices is peoples choice.
True. The media are telling people that high prices are temporary, and that EVs are bad. It's understandable that people would make the choices they do, but it's a shame.
the number one selling car is the Ford F series pick-up truck
The Prius is the number one seller in Japan, and it's doing pretty well in the US.
The type of EV that replaces SUVs will need to be big and heavy, to be bought by those wanting big and heavy cars. Such a beast does not exist.
Here's an OEM Ford Ranger EV Pickup, and a EREV light truck (F-150).
Here are electric UPS trucks. Here is a hybrid bus. Here is an electric bus. An electric dump truck. Electric trucks have much less maintenance.
Kenworth Truck Company, a division of PACCAR, already offers a T270 Class 6 hybrid-electric truck. Kenworth has introduced a new Kenworth T370 Class 7 diesel-electric hybrid tractor for local haul applications, including beverage, general freight, and grocery distribution. Daimler Trucks and Walmart developed a Class 8 tractor-trailer which reduces fuel consumption about 6%.
Volvo is moving toward hybrid heavy vehicles, including garbage trucks and buses. Here is the heaviest-duty EV so far. Here's a recent order for hybrid trucks, and here's expanding production of an eight ton electric delivery truck, with many customers. Here are electric local delivery vehicles, and short range heavy trucks. Here are electric UPS trucks, and EREV UPS trucks. Here's a good general article and discussion of heavy-duty electric vehicles.
Here's an electric mobile strip mining machine, the largest tracked vehicle in the world at 13,500 tons.
In all those links you provided, there is not one SUV equivalent that can be purchased off the rack from the local dealer.
As I stated, such a beast does not exist, especially getting 5km/kwh, as you stated was possible.
The simple point that the F-series pick up truck is the number one seller in the US, seems to have been missed. That is what people are choosing.
A few thoughts:
How do you feel about the Prius V?
I never said that an SUV equivalent would get 5km/kWh. That figure is an average. Small cars can get twice that, while SUV equivalents might get 3km/kWh.
The F-series is just one model out of many. The fact that it's at the top doesn't tell us quite as much as it might seem, given the fragmentation of the market.
On the other hand, you're absolutely right - things are still early for hybrids/evs, etc. They started at the low end of the market and are moving up. How quickly that happens depends on a wide range of social choices, including artificially low fuel prices.
Nick,
The most important point is that EVs and EREV are actually being manufactured now. In 2005 the Hirsh report virtually dismissed EVs as a solution to the coming oil shortage. In the 2008 oil price spike they were on the drawing boards, but few considered EVs an option. Now production is ramping up quickly from a small base so we should start to see unit costs declining. Does anyone doubt that the US could rapidly re-tool all auto-production capacity to EVs, hydrids and EREVs if faced with an real oil shortage requiring WWII type rationing.?
The opposition to EVs is understandable, on the one hand a lot of auto dealers/mechanics and oil refining and retailing outlets will become obsolete. On the other hand those who are attached to the idea of purely mass transit or bicycle transport, redesigning livable cities etc will be disappointed that the end of oil will not kill off the private automobile. It may not even kill of the SUV and that's a pity.
Good thoughts.
One quibble - I think battery production might be a bottleneck, which might limit the number of pure EVs, and require some interim carpooling as we ramp things up. Carpooling even now carries more people than mass transit in the US.
Carpooling - the horror.
This is a comparison of 1972 projections with one author's depiction of the actual experience. This does not show that TEOTWAWKI is happening or will happen, just that BAU growth curves are still continuing. This is only bad news if limits are indeed awaiting the economy around 2015, as suggested by some of the (many) LTG scenarios.
Reading this made me wonder whether or not the ZIRP (zero interest rate policy) of first Japan, then the USA and Europe is a consequence of falling GDP growth in some way, and not originally a politically motivated stimulus.
It also reminded me of this post on a favorite blog of mine:
http://pipeline.corante.com/archives/2012/07/20/does_anyone_want_to_inve...
It outlines how tech companies like Google are sitting on a mountain of cash with which they cannot find anything useful to invest in.
And this brought me back around to thinking about all the failing infrastructure in the western world that no-one can afford to replace. It seems like we are already living in a world that is a left over legacy of a previous era of expansion. Even though people need bridges, water mains and power grids we cannot afford to pay for them in a way that makes a profit for investors (who would rather sit on their billions and watch them inflate away slowly).
This observation makes me gravely suspicious of being able to invest in alternative energy technologies as a society. My feeling is we will be lucky to get a couple of decades of bicycle use of the current road system before it too crumbles.
I agree that the zero interest rate policy is related to very low/ no growth. IF the economy is growing quickly, then it is possible to pay reasonable interest rates.
I looked at the possibility of investing our way out of an energy shortfall, and decided that there is no way it would work. Can we invest our way out of an energy shortfall?
Gail, thanks for the link, great article. At some point, the US will run out of assets to leverage.
Excellent graphs...the data speaks for itself.
Retire or not to retire? That is the question. Oh well.
Paulo
My view is that the money for retirement that is available to you today is likely not to be available to you tomorrow. Thus, the money in bank accounts is likely to either lose value or will disappear for some reason--the electrical supply to the bank is no longer working; the government puts a cap on how much that can be removed in a given week at $50; or there is some other huge change, such as substitution of local currencies for national currencies, that changes the nature of the "ball game' greatly.
Pensions have their own particular issues. They have been making investments, assuming annual returns in the 8% to 10% range. These haven't been happening. The US government guarantees these up to some extent, but at some point in time the number of government guarantees would seem to be overwhelming. If pensions have problems, there is a good change banks will have problems as well.
Social security (and most other government programs) are more of a pay as you go plan, with funding today for today's recipients. These may continue to some extent, but if the country is poorer, the relative benefits are likely to decline.
So in making the retirement decision, it seems to me that you need to consider that in the future you are likely to need to work. If there is some way you can temporarily "take a break", and spend money you have today that likely won't be there tomorrow, there might be a possibility of temporary retirement. You might also spend some time/money becoming better friends with the younger generation, because we are likely to be depending on them more in the years ahead.
I have long realised that a financial pension will not exist by the time I retire. In the UK the poor receive a flat rate state pension provided they have spent most of adulthood in taxed employment, but it is not much more than a basic safety net against extreme poverty. Middle income people are expected to pay into a stock and bond market based fund managed by fund managers who all end up extremely rich regardless of the success or failure of the funds they manage. The rich manage their own money and make sure they stay rich. Already the state pesnion is becoming a receeding horizon. Entitlement age for men has risen from 65 to 68 for my age band (under 50). By the time I am 68 that figure will be 75... The token amount I invest in my pension fund is performing badly.
I have two real pensions. My parents and their parents both had the good sense to have small families. The same for my wife. We have inherited two properties in a wealthy area (presitigious university city) and will soon inherit enough to buy a third. The rental income from these properties will be enough for a comfortable retirement that should ride the energy descent curve reasonably well provided that title to property is retained. My second pension are the two children we adopted out of poverty, abuse and neglect some years ago. Although nothing is certain I hope they will become our property managers and maintainers when alternative employment is hard to come by.
For various reasons I gave up on rental property some years ago. It has occurred to me that that might have been a mistake as all of my retirement funds, minus social security, are invested in financial markets, mostly corp. bonds and CDs. Yet now I wonder if even local rental property is safe. If no one has any money, who is going to pay rent?
There is always someone willing to pay rent. It just might be a lot less than what you're looking for.
My experience in real estate is that price is the #1 factor in whether something sells or not. Not the only factor, but the biggest one. Rents are pretty high right now (ironically, partly because many people were pushed out of their houses during the housing crash and related foreclosures), but if things go downhill eventually rents must decline or there will be a lot of empty properties.
There is another way to invest in making sure your future needs are met after retirement as I am doing. You can INVEST in reducing your
use of energy and resources in as many ways as possible. I have a folding bike which I can take on any train or bus to have Transit without oil. I bought the best triple pane insulated windows, an energy efficient new furnace, and new insulation and have cut my natural gas usage by over 50%. I will soon be installing a solar carport grid connected capable of supplying 100% of my own energy plus when the sun is shining - selling to the grid for Solar credits during the day and consuming only at night so that my electric bills will be $0. At current rates I will earn over $1500 per year on electricity I supply the grid. I live a few blocks from a train station where I walk to take the train to work and other places with my monthly pass for $100 per month versus $500 per month equivalent driving at $.50 per mile for driving. When I retire if it still exists NJ Transit offers senior discounts which are even cheaper to ride the train or bus.
I live in a 19th Century "Transit village" community of about 1200 people ready for the 21st Century reality with our own post office, library, school, public performance space, parks, grocery store, 6 restaurants all within easy walking distance. We also have a 9 hole golf course and playground public space which I find pretty but useless as I find golf boring and stupid. But it *could* grow our food in the future if needed.
I do NOT live out in some rural boonies but 1 hour train ride from New York, Hoboken, the Jersey Gold Coast, and just about any cultural, educational or entertainment event you can think of.
Some day I will also be able to take the restored Lackawanna cutoff Rail line to the "mountains" in Northwest New Jersey and Pennsylvania or to the beautiful Catskills in New York via the "Jersey Crescent" along the I 287 median.
If we truly believe that oil and all resources will become increasingly scarce in the future isn't the best investment any way in which you try to reduce your consumption of these resources to 0?
As my neighbor said who invested in solar panels on our local grocery store told me - they can tax or you can lose future income. But if you CONSERVE and never spend in the first place that can never be taxed or taken away and lost!
I don't think most people here really appreciate the dramatic growth possible (inevitable? necessary?) in solar energy and in energy storage. I leave out wind because it's a well established industry. If you put your retirement into a *diversified* set of solar, energy storage, and smart grid that provides value to energy users (not just the utilities), then you might have a pretty darn good chance at having a retirement fund. And worse case, if the money evaporates, then you might at least have some ownership interest in a physical asset that actually generates energy.
What would change if you could only conduct bank transactions (because the computers were only powered) when it was sunny or windy? You'd probably start paying attention to the daily/weekly energy forecast, and schedule around the weather instead of some artificial 9 to 5 regiment.
Those that had invested early in on-site generation, as well as long-lasting energy storage would have a serious competitive market advantage over the latecomers who will insist on seeing a 2 year payback.
The only reason to worry about your retirement is if it depends on unchanging daily cash flows. If you can deal with variability (both in market volatilty and energy availability), then you will probably do pretty darn well, and maybe we can all take days off when the wind stops, and get cheap electrified rail transport and rates to the tourist spots during their local windy season.
What would change if you could only conduct bank transactions (because the computers were only powered) when it was sunny or windy?
Realistically, that's maybe 5% of the time. If cheap underground storage of simple fuels ( such as hydrogen or ammonia) created during periods of surplus power generation and burned in cheap peaker turbines doesn't work (and it will, if needed), it won't be a hardship.
This statement is very questionable:
For the USA this is patently false at this point in time.
As has been pointed out by many TODers in this site Auto Addiction is the biggest use of US oil at about 69% of oil usage for cars, trucks and air transit. There IS a substitute
almost immediately available for this usage - namely vastly more efficient Green Transit usage of our already built trains, lightrail, buses and shuttles along with bicycles and walking. The Auto Addiction lobby myths that the US is "too vast and spread out" for Green Transit, that Americans will not use it, that it will cost too much and take years to transition are false. In fact 79% of Americans live in urbanized areas according to the FHWA whose mandate is to support highways. Brookings in May, 2011 completed a 2 year in depth study of Census data, transit and jobs which found that already 70% of working age Americans in 100 US Metro areas live only 3/4th mile from a Transit stop. Note that this is without laying a single Rail, buying another bus or buying another shuttle. Unfortunately since the 2008 financial crash Green public transit has been very hard hit with over 150 cities facing major transit service cuts and fare increases. Ironically TODers like Gail would appreciate the connection to the financial meltdown as many of these public transit agencies like the DC Metro got hit hard with their interest rate swaps still going to banksters rather than running public Transit.
Adding to the irony is that when gas prices first hit $4 per gallon in 2008 and Americans were flocking to public transit in droves was exactly when cuts were made all over the USA. I experienced that directly in my daily Rail commute - my train stop's parking lot was full as people in desperate search of parking came to my train stop which still had some available parking. This is not to mention myself and most train riders at my stop who walk to the station as about 2,000 people live within walking distance. Across the US public transit ridership was increasing by double digits. And then it was cut in town after town due to increased fuel costs, default swap callbacks and municipalities budget crunches.
If the US, which consumes 25% of the world's oil, wants to cut oil consumption it is
very simple and could take affect within months - simply RESTORE all the public transit cut since 2008 by the Federal government restoring operating subsidies which had existed for decades until Reagan.
This is not a "shovel-ready" stimulus this is a "NO shovels" stimulus!
Permanent Green Transit jobs would be created immediately calling back laid off Transit workers and college students who have had to stop school due to lack of Transit, those who can no longer afford cars and others who want to cut gas expenses would get back a public transit option.
This could easily be paid for by a $.20 increase in Federal gas taxes which is long overdue.
At one time, even Boone Pickens was in favor of increasing the gas tax, perhaps up to the same level as the EU, offset by cutting the US Payroll (Social Security + Medicare) Tax.
Old Republican Cabinet stalwart George Schulz has even endorsed a straight carbon tax as reported in another story linked from TOD!
There is hope I believe for fundamental change. The question is will it come soon enough?
Although just RUNNING existing Green Transit is easy, the next stage of actually restoring our Rail network can be a lot more expensive. For example the cost overruns on restoring the NYC 2nd Ave Subway.
As we here know it will get more and more expensive to run the
bulldozers and other oil-fueled equipment needed to restore Rail and to do new Projects like building down strategic highway medians where no Rail ever ran before.
I was speaking about over $1 trillion in world built infrastructure. We have cars, trucks, boats, electrical systems, factories, home heating and air conditioning systems, and many other things that need oil in some way--certainly for lubrication, but also for maintenance, and servicing with new spare parts. Maintenance of huge grid-connected wind turbines depends very much on the fossil fuel system, so it is another part of the world built infrastructure that is likely to fail, with oil supply problems.
Then the umpteen electrical engineers who have posted on here to the effect that the grid can be run just fine on very limited supplies of oil, well within the possibilities of biofuel must be seriously ill-informed on what it takes to run a grid.
Either that or we get into the circular pattern of reasoning that no part of the system can be maintained as the whole system of economics and everything else will crash.
So the crash is inevitable because of the crash.
The electrical grid can run just fine on limited quantities of oil because the vast majority of electrical generation uses fuels other than oil. The small amount of oil required for lubrication and fuel for maintenance vehicles is insignificant in the overall market.
The highway system is totally different. The vast majority of vehicles run on petroleum-based fuels, so in the even of a serious oil shortage, the whole thing will come to a screeching halt.
Note that I'm assuming the electrical utilities will be among the fire departments and ambulances in getting priority in any kind of rationing system.
Of course, the electrical grid is part and parcel of a larger economy utterly dependent upon fossil fuels, especially liquid fuels. Supported entirely by rate payers whose incomes are dependent upon cheap non-electrical energy in many ways, our electrical grids are equally dependent. The whole system's vulnerability to declining fossil fuel availability and/or rising costs effects all of its sub-systems and our collective ability to support them. It's our reliance upon highly complex interconnected systems that most folks have trouble understanding; our ultimate vulnerability. Overshoot encompasses everything.
I agree. You said it well.
Thanks, Gail. I hope to see more whole systems posts and discussions as I feel TOD does a great job of covering various aspects of peak oil, etc., but it tends to become compartmentalized, losing sight of the big picture. Whole systems analysis is a tough nut, as much art as science, but essential to discovering where we are and where we're going. This post is a refreshing step in the right direction. Thanks again..
Several editors at TOD object to whole systems analyses, in general, although some numerical analyses are OK. They want this to be an oil site. This is one reason I write at Our Finite World, where I have latitude on what I can write.
There is also an issue of how readers respond. Readers like "happy endings". Whole systems analyses tend not to come up with happy endings. If readers get upset, the discussion tends to go downhill badly, with many arguing that the reasoning must be wrong, awful things couldn't happen to them, etc.
Gail, I understand where the TOD editors are coming from, but one would think that by now they should be beginning to understand that the oil affects the whole system and the whole system affects oil. Everything is tied together in a complicated mess.
People focusing on oil, and only oil, is the reason some peak oilers still see oil prices going to $200 and even higher. They fail to realize the devastating effect high oil prices have on the whole economic system.
My Dad, who married in 1927 and raised a family during the depression, said things were dirt cheap during the depression because no one had any money to buy anything and that drove prices down. People who expect oil, or any commodity for that matter, to be extremely high priced while the world wallows in a depression betray their lack of understanding of the whole system.
And TOD editors who insist on concentrating only on oil while leaving whole system analysis out of any coverage only help to perpetuate this misunderstanding.
Ron P.
Ron, I couldn't agree more that: "everything is tied together in a complicated mess". Down thread I asked Gail about an estimate of where GDP would be minus all the debt spent on consumption, lack of savings due to overly generous promises to retirees as well as income generated on the spread between borrowing and investment/speculation. My back of the envelope estimate for a reduction in GDP is about 10% for debt spending, 10% for savings and 5% on the credit spread. Credit spread being roughly 2% on about 250% of GDP. In other words, an eventual reduction of GDP similar to the Great Depression but since the system is far more out of balance than it was at the end of the 1920s, the likelihood of a near term overshoot of the 25% is a real possibility.
So, the idea that in the near term there will be a surplus of commodities, at current prices, would indicate that peak oil for the next few years/decade will more than likely be a monetary event rather than a physical supply event. How that plays out in individual countries will be determined by a whole host of monetary, political, military, balance of payments and maybe the most important of all: food production issues.
The trap that many countries will have IMO, as many have discussed in TOD, is that there will not be sufficient wealth remaining to make the investments to a lower energy intensive economy. The ironic thing about that is that, as Russia shows, it may be some of the resource rich developing countries that bear the brunt of the economic decline.
Great post NC, and I agree with everything you say except this:
I am going out on a limb and calling peak right now. The decline will start, or started in June 2012. So it will be a physical supply event in my opinion. I expect prices to go higher later this year then turn down as the world slides into a deeper recession in 2013.
Of course everything is just a guess but I call it an "educated" guess. I follow the production numbers of every producing nation very closely. And I also look at what they have coming on line in the next few years. I see depletion overtaking new production in late 2012 and 2013. And it will be all downhill after that.
Ron P.
Ron, thanks for the insights. One of the things that brought me to TOD was trying to decipher how all the crosscurrents of the financial world would interface with oil production and prices. When it comes to investing in alternative energy strategies, it is very difficult to figure out how this will all play out and the timing. Just like every oil company looking at high cost unconventional oil plays, I have been trying to figure out when the price floor will be stable enough to launch a biomass business. Since capital is scarce, pulling the trigger too soon can be fatal. On the other hand, if prices are low for too long, people won't have the funds to invest in alternatives no matter how robust the rate of return in the future when prices eventually rise.
It really is a shame that the US is putting all it eggs in the monetary/military basket rather than working to reduce the energy dependence that drives the need for all the games in the first place.
I see depletion overtaking new production in late 2012 and 2013. And it will be all downhill after that.
In that case, how can you say that decline started in June 2012? Shouldn't the decline start next year?
No I believe that late 2012 is part of this year. Actually June is not late 2012 but production will be down quite a bit in June from the peak in the first quarter of the year. But why are you so pickey? The peak will be early 2012. Or hell, I might be off a few months. I am calling peak in 2012... Okay?
Ron P.
I wasn't being picky. Sometimes people make typos (2012 instead of 2022, etc). I just wanted to make sure I correctly understood what you were saying.
What do you think the decline rate will be after the peak?
I expect the decline to be in the range of 1 percent for the first two or three years. Then I expect it to pick up to around 3 percent or so. But there are wild cards that come into play after three or four years, some exporting nations will cut back, hoarding the oil for themselves. Oh they will still export enough to get a handsome income but not export all they could if they were producing flat out. That could cause the rate of decline to be in the neighborhood of 5 percent or so. That will be catastrophic.
Ron P.
For some reason, this coincides with my prediction that around 2015-2016 we will get an economic collapse due to sovereign debt crisis. Governments will be unable to roll over debt, they will print a lot of money, and the value of paper money will be mostly destroyed. We are all Greek and Spaniard; we just haven't realized it yet.
I think those who listen to Stoneleigh and stay in cash will see their wealth destroyed. A major commodity spike is coming (oil can go to $200/barrel if its purchasing power is devalued).
I will think about it, and try to come up with a post. I try not to be too over the top, because I have a number of sites copying my posts besides TOD and the standard "peak oil" sites. Non-peak oil sites that copy my posts include Business Insider, Forexpros.com, Financial Sense, OilPrice.com and recently OilVoice.com from Britain.
That's really too bad Gail. I wish you had a second blog, under a pseudonym, where you would feel free to go as far over the top to your heart desires. I would love to read your "over the top" opinions. However I would still bet that they are not as far over the top as mine. ;-)
Ron P.
I suppose I will end up with some posts that are more over the top than others, and the various sites can skip them if they choose. All of the various sites "found me"--I didn't go looking for them.
Ron it would be great to see you and others here that are interested in how resource depletion will affect the whole global system in the comment section at Gail’s blog as well as the blog of George Mobus entitled Question Everything.
http://ourfiniteworld.com/
http://questioneverything.typepad.com/
Mark, I only occasionally comment on other blogs. However I can answer your question right here. Resource depletion will be disastrous for the welfare of all the world's nations and all the world's people. We are deep into overshoot and we are depleting all the world's natural resources, not just oil.
We will hit a brick wall and when it happens it will be fast, not slow as many believe. When will it happen? I would guess, and it would be a guess, within the next ten years. It will come within 5 to 15 years after peak oil becomes an obvious fact in the rear view mirror. How long will it take? Not long, weeks to months probably but a very few years at the most.
However....
"All I say is by way of discourse, and nothing by way of advice.
I should not speak so boldly if it were my due to be believed."
-Michel de Montaigne
Ron P.
no no , not screeching - more of a phut phut bang - quite roll to stand still .......:-)
Forbin
I'm an EE, and I'm fairly sure I can grasp the concept that you aren't gonna raise a 300kV tower with a bunch of dudes on bicycles (well, maybe a couple, but one hurricane and you're pretty much done in that situation). Not that we couldn't figure that one out pyramids-style (autocracy anyone?), but Gail's got it right to the extent that you don't do those things when you can't pay for it, regardless of whether a substitution is theoretically available or not. I don't know about a hard crash or not, but maybe we'll find something really useful to substitute with rust, cause I forsee an abundance. I suspect earth is gonna be as hot as africa, and as rich as appalachia (ask them how they are doing out there with all their coal being sold out from under them to china, by the way). Welcome to Afrolachia...has a nice ring.
Desert
Jambo, you'uns!
Yes we have a huge sunk cost in incredible stupid investments in Suburban Auto Addicted living. I view this about the way I view the obsolete PC from the 1990's I had in my attic - as something to be abandoned from its current use and recycled. A few weeks ago I gave my PC to a Church recycling fundraiser.
Luckily the millions of junked cars all over the AutoAddicted USA will eventually be a treasure trove to recover steel and all sorts of other materials for better and more efficient uses.
... and the roads? How about the employees of the automotive parts supply factories, auto repair shops, sales yards and so on? Can they all just be mined for raw materials too?
Facetious, yes. But the investment is not so much in the cars. It's in the system.
The biggest direct impact on employment will be on the 1.6 million long haul truck drivers who will be largely replaced by freight Rail. ( see http://www.bls.gov/ooh/transportation-and-material-moving/heavy-and-trac... )
The process of moving huge amounts of long-haul truck traffic to freight is already in progress and accelerating with major investments in projects like the Crescent Corridor which aims to take 1 million trucks per year off the road. ( see http://www.thefutureneedsus.com/crescent-corridor/ )
There will be some jobs created - Norfolk Southern is claiming 73,000 but of course
there will be a lot more long-haul truck driving jobs eliminated.
CSC also has a major freight rail project, the National Gateway:
http://www.nationalgateway.org/
This will tie the Midwest to the Northeast for freight rail.
These are their claimed benefits:
Of course Warren Buffet did not buy Railroads for frivolous reasons. Buffet's freight Railroads are also investing heavily in improving their capacity see
http://www.bloomberg.com/news/2012-02-01/buffett-railroad-boosts-capital...
Obviously the switch to Green Transit from auto/air/truck addicted transit will prompt major changes. For the best portrait of how industries and businesses have adapted to past Transport Revolutions I strongly recommend Anothony Perl and Richard Mandel's excellent book of that title: "Transport Revolutions: Moving People and Freight without Oil" ( http://transportrevolutions.info )
The transition is already happening for freight. We need to jumpstart it for passengers.
That's true. Due to the vastly better fuel economy of railways per ton/mile, as diesel prices rise they will have a huge competitive advantage over highway trucks. And, if things get really bad, they always have the option of converting to electric power. After all, a diesel-electric locomotive is just an electric locomotive with its own portable diesel generator (a lot of people hate that concept, but it's true). If they have to, railways can just string some wires, add some electronics, and run them on pure electricity. The main barrier is the capital cost of changing the infrastructure.
It will have a huge impact on employment because the railways only need 1 driver per 100-car train versus 1 driver per truck on the highway. This means that at least 1.5 of those 1.6 million drivers will be looking for other means of employment in the post-peak-oil era.
Rocky – “…the 1.6 million long haul truck drivers who will be largely replaced by freight Rail.” I’m not going to worry about my long haul friends (who lust made a run from Minnisota to the North Slope)…they and most of the other current truckers will be dead long before this happens in a couple of decades or so. In fact if rail expansion kicked real fast there should be a noticeable increase demand for the truckers. IOW how are you going to get those rails (and all the other infrastructure components) from the mills to the sites: blimps or maybe bicycle brigades? LOL. We’re back to those unavoidable conundrums: changing our system significantly will require huge amounts of capex/energy. And the books may balance out nicely in the long but in the short term there’s an inevitable deficit. We’ll have to spend trillions of $’s and BTU’s long before we start saving them. Of course, we can just borrow the money. After all there’s no limit to how far we can go into debt, is there?
Rockman, the freight going from Minnesota to the North Slope to the Alaska North Slope more or less has to go by long haul trucks because the railroad tracks end at Mile Zero of the Alaska Highway in Dawson Creek, British Columbia, and from that point freight has to go north via the Alaska Highway and Dalton Highways.
The Alaska Railroad isn't much use in doing this since it is orphaned from the North American rail network and only runs from Anchorage to Fairbanks, AK.
In the lower 48, the US is more or less completely covered by railroad tracks, and most points can be served by short-haul trucks from railroad lines. There are not very many points which are more than a few hours from a railroad track.
Alaska could benefit from railroad connections to the south, but the US government would have to subsidize Canadian railroads to provide service to Alaska - American railroads just don't get very far north of the Canadian border, whereas Canadian railroads reach north to the latitude of Anchorage (although far to the east of Anchorage).
I don't think the US government can get its mind around the idea, but it wouldn't actually be very expensive compared to the cost of building highways in the far north.
Orbit, there are many problems with your post. First of all, the statement of Gail's you posted is the hard truth despite denials by cornucopians. The rate of substitutions away from is extremely slow and will likely continue to be very slow in the future. Simply because it could be different if everyone behaved in a certain way does not make the statement false. We are talking about real possibilities and probabilities here not what is possible if we lived in a perfect world.
Look at the progress we are making today in moving to "Green Transit" as you call it. It is extremely slow if moving at all. That is what is happening in the real world, not what could happen if everyone behaved as you think they should.
Wikipedia lists 366 Metro Areas in the US. 70% in just 100 of them is a long way from a majority. And three quarters of a mile is a long way in a rainstorm, snow, or freezing weather. And, how far would most of those people have to walk after they got off the bus?
I live in a metro area of almost half a million people. Not likely one of those 100 in the Brookings study. People are spread out over the entire county. Almost everyone lives in some remote suburb. Designing a bus system to be within the reach of most would not be practical, would cost millions that would never be recovered in fares.
That first sentence is ambiguous. Double digits per year? No, that was just not happening. Double digits per decade? Perhaps but the population was also increasing quite a bit per decade. Anyway you need to give a source for such data if you expect to be believed.
I agree that converting to buses and trains is very desirable. But it would cost many billions of dollars at a time when there is hardly any money available to do so. And the return on investment is questionable. That means it is not happening and is unlikely to happen with peak oil upon us and peak imports as well as peak EROEI well in the past.
Gail's statement that you quoted is the absolute hard truth because we must live in the real world, not a world that we could have if only, if only, if only.
Also, learn how to use paragraph breaks. Your post is extremely hard to read because it has so many lines without a break.
Ron P.
Ron despite the major cuts to public transit many of which have not been restored since 2008 public transit ridership increased by 5% year over year in 1Q2012. And it WAS increasing by 10% year over year levels in 2008 when commuter trains here in New Jersey, including mine, were packed with people at the first increase of gas prices to $4 per gallon. A new train station was opened ironically just a few months before the "Great Train Massacre" in May, 2008 in New Jersey and in less than a month its commuter parking lot was full.
Historically New Jersey has only provided $300 Million in operating subsidies to Green public transit to provide over 350 million rides. Unfortunately our Teabag Gov Christie just cut that to $76 Million for 2013 budget making up the difference by consuming what was supposed to be spent for a new NYC tunnel which is desperately needed. By comparison to fix just 1 entrance ramp on County roads 2 miles from my house cost $17.7 Million!
As far as people being willing to walk 3/4ths mile - that is the type of sacrifices which may have to be made. But it is hardly insurmountable.
The point of the 100 US Metro areas is that these are the most populated and thus represent the biggest potential for increasing public transit. If you want to check your own Metro Area you can click on the interactive map link included in their article
http://www.brookings.edu/research/interactives/transit-access-to-jobs-in...
The "real world" involves PHYSICAL constraints. The barriers to increasing public transit are not "REAL" they are primarily POLITICAL barriers of choices. Will we continue to spend billions on Auto Addiction and Air travel instead of Green Transit? Will Americans be forced to spend 2x what Europe spends due to AutoAddiction?
Or will we follow the path outlined by Anthony Perl and Richard Mandel in "Transport Revolutions: Moving People and Freight without Oil" and stop ALL road expansion and redirect it to grid controlled electric public transit?
( http://transportrevolutions.info)
As Perl and Mandel point out during WW II the US elite made the POLITICAL decision to bring AutoAddicted transit expansion to a grinding halt as car production was cut to 300 cars and Green transit ridership at all levels quadrupled in only 3 years. There is no PHYSICAL constraint to taking this path again. It is totally political.
If we say that no political change is possible then we may as well give up on this site as it becomes only a depressing litany of Cassandra doom when any actual solutions are simply ruled out as not politically possible.
Surely simply restoring public transit to what it was in 2008 is neither budget-breaking nor physically impossible. Nor is it impossible to make the most cost-effective steps like shuttles for the last mile, safe bicycle paths for the 3/4ths mile etc.
I know political action can work - in less than a week my town rang NJ Transit and local politicians phones off the hook to the point they restored 3 train stops. After months and a townhall meeting we got them to restore 8 more of our train stops cuts including a midafternoon train for the whole Rail Line.
Nevertheless Gail wrote:
You replied:
No, the statement by Gail is absolutely true. You gave reasons why it could be false if only we invested in Green Transit, whatever that is, and if only the political "Auto Addiction lobby myths", whatever that is, would stop doing what they are doing and several other things that keep buses and trains from carrying more people.
Orbit, you cannot say a statement is patently false, then give reasons it could be false "if only". What you should have said was this: Yes that is true but we could change things if only....
Ron P.
I always eagerly take in the information here at the OilDrum, but rarely enter the comments, but on occasion I peek into what people are saying and it is sometimes too frustrating for me to not say something. I think my perspective as a car-free a young millennial involved in bicycle and alternative transportation advocacy in Los Angeles (which is making big gains in transit development thanks to self funded tax measures for transit), gives me a very different awareness than suburban and exurban boomers who have a difficult time imagining life without cars or that many Americans are actively trying to move away from cars as we speak, including those who can easily afford to drive. Even employed college grads making over $70,000 a year are driving far less than equivalent peers of prior generations.
http://www.theatlanticcities.com/commute/2012/04/why-young-americans-are...
http://www.smartcitymemphis.com/2012/07/young-people-are-driving-less-an...
A transition away from driving not only can happen, it is already happening. Vehicle miles traveled in cars in the US has flat lined since 2008 with slight decline, but if you dig in further, on a per captia basis it has declined significantly, and starting well before the economic crash so that is not the only explanation. When broken out by age groups, for millennials it is especially dramatic, with driving rates that go back to levels many decades ago. Some of this economic recession related, but since no "robust recovery" appears in the cards, I don't see some sudden switch back. Culture change is part of this, and goes beyond just the economics. A lot of young people are just turned off by cars and see them more as liabilities than assets. I sold mine a few years ago and haven't looked back.
Public transit ridership has been growing in the US significantly also hitting numbers not seen in many decades, despite being starved of funding while we continue to squander many billions on highway expansion and parking garages. Every year for the past 8 years Amtrak ridership has increased, and last year it set an all time ridership record, beating years when service coverage was much higher decades ago. If we shift the funding paradigm to favor public transit even just a little bit more, I would expect the changes to be even more dramatic. In Los Angeles, which is so often associated with the car, new rail and BRT bus line extensions are opening just about every year, and the CicLAvia event shuts major streets down for cars and opens them for everything else for a Sunday a few times a year is attracting hundreds of thousands to walk, bike, and rollerskate through the heart of LA.
(Looking toward Downtown LA on 7th St. during CicLAvia)
New York City is about to roll out a 10,000 bike bike share system in a month, and LA is intending to roll out 4,000 within the year. A number of US cities have already started running systems or are progressing on their own plans for a roll out. These kinds of developments are huge and game changing, yet seem to be either ignored or downplayed at by the folks here, which I do not understand and frustrates me to no end.
I realize oil is critical to many things beyond just urban car commuting, but since much of the car commuting in the US is pointless, particularly in the big cities that have a substantial portion of our population, a concerted effort toward mass transit and active transportation can and I believe will buy more time allowing oil reserves to be more focused on sectors of our economy more necessary and critical to survival. This only buys a little more time, and I fully get we are too late for any easy transition at this point, but these emerging transportation trends deserve consideration in imagining how the future may play out.
In the end of course the oil won't last forever no matter how many of us ditch cars, but I feel those imagining a very sudden collapse in part because they can't fathom Americans making a sensible shift away from cars, are underestimating what is already in motion and the potential for that shift to accelerate. In some cities that have invested modest sums (compared to all other transport modes) into bike infrastructure, we are seeing significant growth rates. Albeit from a low base level but the rapid acceleration shows potential for big gains in a short time. NYC since 2000 has seen a 262% increase in bicycling with investments that are basically left over pennies compared to highways, wide boulevards and subway lines. http://transportationnation.org/2011/07/28/breaking-new-york-city-biking...
I can only imagine if the effort were more on par with places like Copenhagen which have fewer resources and less wealth but invest it more heavily into non-car modes.
I have no doubt my life will be much more difficult and less leisurely than my parents generation, with significant threats to human welfare due to our mismanagement of natural resources, but I also believe the situation is not as entirely bleak and hopeless as some paint it here. Anyone who assumes Americans will just keep driving off into oblivion without ever considering a bus pass or riding a bike in their projections will be wrong, I am fairly confident of that.
I never drive in most cities (10 days in NYC without entering car last month, or SF where a car is a liability).
I lived in LA (was born there), and used buses frequently, but found a car to be a necessity for my lifestyle (I needed to escape regularly).
Gary
Thanks for chiming in from a younger generation's perspective. I myself am a baby boomer but since 1971's Environmental Handbook and Limits to Growth in 1972 I have ALWAYS promoted Rail, and bikes whenever possible. In the 1970's I used to ride my bike 5 miles at 5:30 AM to work on a garbage truck and then frequently ride it to Clearwater Beach to wash off the stench!
When I went to college I deliberately took Amtrak rather than drive or fly and in College although possessing (of course!) a VW Bug rode my bike for 90% of trips including to classes.
In 1997 I got a bike locker and took the train 3 1/2 miles from Bell Labs and I would ride my bike 3 times per week to work which was totally enjoyable!
I now have a daughter who just graduated from college and she is not screaming that she never got a car but instead I gave her the money and some funds for a Zipcar. As you relate, a number of her friends do not even have their drivers licenses yet as college graduates and have no intention of getting one as they plan on living in the city and transit accessible areas. None of her friends considers any used beatup cars they may have for transportation to music gigs as any sort of status symbol or even necessary if they move to transit accessible locales like NYC.
What is most frustrating to me is old Rail advocates who have the same defeatist attitude about cars. They have been losing to Auto Addiction for so long they are like an abused old dog afraid of another smack from the Auto Lobby instead of advocating and organizing for the bold steps we need.
And you will NOT suffer as much as some people think.
Besides the pleasures of bike riding, we will also see the revival of Main Streets, people-oriented instead of car-oriented town squares with music, dancing, the arts and conversation, none of which uses much oil or produces greenhouse emissions!
For example take this encouraging article from Jay Walljasper, UTNE Reader editor:
http://www.commondreams.org/view/2012/07/18-2
Forget the cynical old boomers!
Your generation is already changing the world in ways we never thought possible!
As Pete Seeger said who at 93 has seen and lived through the Depression, Fascism, McCarthyism, the threat of nuclear annhilation always says:
The rate of substitution is extremely slow in the US because, after generations of promoting the building of highways, and the use of automobiles and petroleum-based fuels, the politicians just can't get their minds around anything else. They are actively resisting the economic pressures encouraging people to move away from oil, as witness the "cash for clunkers" program to encourage new automobile sales, and the spate of highway building as a response to the economic downturn.
At the same time they are cutting back increasingly popular public transit systems just at the time people need them the most.
That's because of 60 years of bad planning since WWII. The US dismantled almost all of its streetcar and interurban rail systems in favor of freeway-based systems. New cities and suburbs were totally designed around the car, with no thought given to how well public transit and walking would work in the streetscape they created. This explains the now ubiquitous "crescents and cul-de-sacs" layout of modern suburbs, which is the absolute antithesis of a walkable neighborhood, and housing densities which are legislated to be too low to support public transit.
But, it didn't have to be that way. Take Canada, for instance, which followed a more European development pattern:
Statistics Canada: Public transit in Canada, 2007
Note that by "nearby", they mean within a 5-minute walk, i.e. 400 metres or one-quarter mile.
So, instead of 70% of people in 100 metro areas being within 3/4 mile of a transit stop, Canada has 68% of everybody in the country being within 1/4 mile of a transit stop. The result is that transit ridership in Canadian cities is 2 or 3 times as high as in equivalent US cities.
Canada has similar demographics to the US, and the population density is considerably lower. The main factor in the much higher transit ridership is URBAN PLANNING which includes transit as a mandatory feature.
(Also, due to public protests, Toronto never abandoned its streetcar system, and it continues to have very high ridership.)
Unfortunetly Canada has largely abandoned any intelligent urban planing new growth is very much following the urban sprawl model of the US. Any vestige of better availability of public transport is a heritage of past sanity that will fade as the sprawl increases. IMHO
Well maybe where you live they don't have urban planning. Where I live, they have me to contend with, and I will demand intelligent urban planning. And if they don't do it, I will get involved in local politics, circulate petitions, and force it down their throats. But that's just me and the way I work.
If you want things to happen, you have to get involved. Sometimes you have to get pushy and kick people out of office until you get someone who understands.
Am I the only one that fails to sympathize with people having to walk 3/4 of a mile (1.2 kilometres, about 11 football fields or exactly 3 400 meter outdoor running tracks)? Wouldn't that be the best thing that has happened to American lifestyle since WW2?
Well, I always thought a 3/4 mile walk was pretty nice first thing in the morning. However, by the time I was done, I was at work and there was no point in taking transit.
The walk back was not bad either, because I could pick up some fresh-baked baguettes, some meat, a bit of cheese, a few salad greens, some wine, and make a really nice, fresh, healthy dinner when I got home.
It kind of makes me wonder why people want to live in the suburbs and have to drive everywhere.
Here's why I live in the suburbs:
Because you don't want to wake up at 2 am and find there is someone standing in your bedroom who shouldn't be there. The cities in the US are generally very different from the cities in Western Canada. I think Kunstler is way wrong on this. As things get more desperate people are going to want to flee the cities even more.
1) No
2) Yes
NAOM
orbit - "... the rate of substitution away from oil is necessarily very slow." And you respond: "For the USA this is patently false at this point in time." I understand the point you're trying to make but at the same time you seem to completely negate your proposition. We've just going through a period of high energy costs, including $147/bbl oil, as well as all the nasty side effects. And what rapid changes have we seen to our system in the last 4 years? Opinions may vary but I see nothing substantially different today than before prices began rising 5+ years ago. And as you point out we're still seeing little effective change. Other than negative feedback loops.
Oil prices have been steadily rising since mid 2007. Perhaps we have different concepts of "very slow" but after 5 years we're still following the same format we have for decades. Perhaps you're offering what "could be done" vs. what's actually being done. That's all well and good but what "could" be done is rather unimportant IMHO. The solution to any problem is worthless if it isn't implemented. And so far none of your ideas seem to be gaining any meaningful traction. At least not yet but maybe in the future. But, as I pointed out, the future has been here for at least 5 years. "Very slow" seems to be an apt description IMHO.
Please see my reply above to Ron
It is absolutely critical to realize that the "slowness" of the reduction in the 69% of US oil usage going to Auto Addiction is totally a POLITICAL decision not a real world constraint. Some people on this site fail to see this critical distinction. I believe as in WWII the US could easily quadruple non-Auto/Air transit in a matter of a few years if the political will existed to do it.
Chris Nelder has outlined the comparison between maintaining Auto/Air addiction or transitioning to electric Rail in his excellent article "Reframing the Transportation Debate":
http://www.smartplanet.com/blog/energy-futurist/reframing-the-transporta...
The early part of this transition is easy given the US huge waste of oil at the same time it does not even use the capital already invested in public transit. In the long run it will be more difficult to actually get normal Rail going, high speed Rail going, full electrification and major new Rail connections along highway medians to tie together existing sprawling suburbs.
But it is foolish to just assume that such a transition can never be made or could not play a major role almost immediately.
orbit - I do truly appreciate your passion on the subject. BUT: "Addiction is totally a POLITICAL decision not a real world constraint. Some people on this site fail to see this critical distinction." Sorry buddy but IMHO political decisions are not only real world constraints but perhaps our biggest constraint to seeing any amount of significant change in a reasonable amount of time. I appreciate what you and your cohorts accomplished but in the grand scheme of the US dynamics we're dealing with today they were totally insignificant. And yes, if another 80%+ of the people took similar actions it could make a difference. But they haven't and I don't see any indication of anything of significant size going that direction. In fact just to balance your efforts Texas/Houston has spent over $3 billion recently to expand highways so folks can drive to work by themselves in their cars. And have just earmarked another $1.5 billion for more expansion. And let's not forget about the plan to raise speed limits to 85 mph on one Texas highway. And why did they do all this? Simple: a political decision....build more roads in Texas and you get re-elected. Not saying that's right or wrong but it is the reality. I suspect that speed limit change will offset what good you've done with your transit system.
There's also an abundance of wishful thinking on the subject. Some cities are growing fairly fast, but that amounts to fast growth of only a few pixels in a corner of the Bigger Picture, so it won't bring about any great overall change anytime soon. Just as raising "Green Transit" pax-miles from 2% to 3% over the next decade or three would not materially change the Bigger Picture.
Another reality is that in absolute numbers, the suburbs are still growing more than six times faster (H/T Grist) than the cities. This ratio is a bit lower than it used to be. But it is not a harbinger of impending vast change; it is simply a side effect of young singles growing up ever later than they used to, something which is not indefinitely scalable.
The crowded places that actually have good, effective "Green Transit" service necessarily sprawl upwards, otherwise they'd be running empty or very infrequent trams or trains. That sprawl tends to get you into ruinously expensive fire and disability codes, buildings filled with ramps, elevators and stairwells instead of useful space, as Kunstler has pointed out. So it's fine for young singles with no responsibilities and "$70,000" (amount from post higher up) salaries, as long as they're OK with living in a broom closet, and they essentially never need or want to go outside the city limits.
It's not so fine for grownups with families, very few of whom can afford downtown rents (and private schools, since the downtown public ones are often dangerous.) They have lives to live, and they haven't got time to wait 45 minutes for a bus (the off-peak weekday headway on a downtown-to-suburb Calgary line I pulled up at random) every time they need to make a move. Besides, in almost any city the bus wouldn't get them to the kids' soccer game over in the next town, nor would it accommodate the equipment. It's designed to take commuters, carrying nothing more than briefcases, in and out of the skyscraper district.
So yes, indeed, "very slow" can be expected to remain the description for the time being. Unfortunately, the view from Manhattan or San Francisco, or even from the more ruinously expensive of the New Jersey suburbs, is not very representative of the country as a whole. Nor, really, is the view of young singles making $70,000 p.a.
Well, they better move faster than that, or three decades from now the Bigger Picture in the US may look like a scene from "The Walking Dead".
Let me run a few numbers past you. If you want to have effective urban transit, you need a population density of at least 20 dwelling units per hectare (8 per acre). This gives you about 500 square metres of land per DU (5380 square feet). This means the lots need to be, say 15x30 m (50x100 ft).
A 50-foot lot is small by US suburban standards, but not at all bad if all you want to do is live on it. If you cover 50% of the lot with structure and the rest with walks, lawn, and garden (small lawn, big garden), you could have a 250 m2 (2690 ft2) one-story house, or a 500 m2 (5380 ft2) two-story house. That should be enough room for even Americans.
For the less affluent who can't afford a 5000 ft2 house, they could go for a semi-detached structure, in which case they could have two 250 m2 (2690 ft2) dwelling units on halves of the same lot and double the density, which would be very useful for transit planning and still give each of them their own walks, small lawns, and decent-sized gardens.
Note that there is no law saying you can't do this in the suburbs. Oh, well, actually in many places in the US there is a law saying you can't. Not so much in other countries.
Note that I left out parking for any cars. They would only screw up the planning process in the post-peak-oil era.
That density typically gets you the desultory bus every half hour at best, or a clump of buses randomly at roughly that frequency in "rush" hour. If you don't want to spend your whole life walking and waiting, it's got to be a lot denser then that. Or, if it's indeed only that dense, then to get decently frequent service you've got to be heading towards or away from a skyscraper district, and doing so in just the right corridor. And indeed the rail lines in Calgary or Edmonton or Chicago are OK heading towards or away from the skyscraper district, and less OK, or even entirely useless, for other purposes.
Alternatively, you have to have an enormous population density, as in Paris (55,000 to the square mile, twice New York City), or Tokyo. Then you will have crisscrossing lines and you can go nearly anywhere fairly efficiently - provided "anywhere" includes only places with that order of magnitude of density, plus possibly some cherry-picked radial corridors, for example along the Paris RER lines.
And if one is anticipating future conditions as bad as what seem to tacitly underlie discussions like this, one probably ought to wonder long and hard about the role and scale of the skyscraper district. Mainly, it produces abstract pixel-pushing, legal obstructionism/redistribution, and a bit of "high culture". Under dire conditions, there may be less demand those things. In that case, pushing yet more people and out of downtown, which is what almost all transit systems are designed to do best, may not be a huge issue.
That's rubbish, I live in Edinburgh which has a population density of 4,776 per sq mile, and there are many many busses. I can also go pretty much anywhere by bus or train, (although it might take a while).
That's right. Edinburgh's population density is high enough to support a reasonably good bus system.
The value I quoted (8 dwelling units, or likely 24 people per acre) is over three times as high and enough to support a very good transit system, including light rail. It also is low enough to allow everyone to have a much bigger house than most people in Britain have, on a reasonably large lot with walks, a modest lawn, and a decent-size garden.
The problem is that the population density in the suburbs of America is much lower than Edinburgh, and they haven't been designed with walking or public transit in mind.
The scale of US suburbia will present significant challenges, and I'm well aware of the terrible layout of them having grown up in West Covina a far flung suburb city of Los Angeles. However if you look at the distances in them, while terrible to walk, are often not that bad for bicycling. As a bit of a weird kid growing up, I rollerbladed all over suburbia relatively independently, which worked pretty well actually. I didn't learn to ride a bike until much later because skates worked so well for me.
What makes them terrible for bicycling has more to do with the threatening feeling of high speed car traffic once you get out to the main travel corridors, but the road widths are often crazy wide and could accommodate a separated space at minimal cost.
Most suburbs are organized with internal knots of cul-de-sacs, but stringed together on big arterials. Those arterials could support more transit service than they do today with a mode shift away from driving. One of the hurdles to accomplishing this is the walk-shed of the stops is stunted by circuitous walking routes within the subdivisions, however those distances that are cumbersome and time consuming to walk are often brief bike rides.
Bus routes with this multi-modal approach in mind could be designed with more secure bike parking, which is low cost to provide and does not require a lot of space, and buses can also carry up 2-3 bikes on a front rack as well.
As suburbs are increasingly home to poverty and not just affluence (which is already happening), suburban municipalities will have to start grappling with these issues as fewer people can afford to drive all the time or at all for some people.
The suburbs will face significant transportation problems, and some may be better suited to pulling through than others, but there are approaches that could facilitate a transition away from autodependancy there, and if more yards were placed into productive agricultural use, they could further extend their viability.
The Sprawl Repair manual by Galina Tachieva is a great resource on the subject of rational paths forward for the suburbs. Some will likely fail no matter the intervention, but I've become convinced bicycling will out of necessity feature more heavily in American life, and not just in urban centers.
Nonsense! Precisely because, as you just said:
...which was most of the point. If you want decent and comprehensive service, you've got to live in a place like Manhattan or Paris (or, if you only want to go downtown, in a carefully cherry-picked corridor.) Otherwise it might well indeed "take a while". And people who have a life haven't got 45 minutes to wait for a bus, and another 40 extra minutes to go all the way downtown and all the way out again, in lieu of a 10-minute drive, So for the US at least, transit will remain a 2% BB pellet for the time being, beneath notice in the Big Picture of energy consumption.
I live 2.5 miles from my employment, ride a bike for all daily work and errands and take transit for occasional demands that are beyond my comfortably bikable radius. I know I'm not the only person in a situation where this kind of arrangement can work and I know a lot of people with little or no concept peak oil or other big picture issues, that are making similar life choices for both practical reasons or wanting to opt of the mental aggravation of driving in urban areas.
American public transit ridership has recently hit highs not seen for many decades, and Amtrak has seen ridership increase every year for the past 8 years and hit it's all time annual ridership record last year despite straight jacket budgets. It is on pace to do this again in 2012 and set another all time ridership record, this at a time when highway miles stopped in their tracks in 2008, and per capitia VMT is in decline. http://www.railroad.net/amtrak-on-pace-to-break-ridership-records-in-201...
Bicycling remains a very small slice of the overall picture in the US but in a number of cities significant recent growth is emerging, especially with younger people who also taking transit far more than their predecessors.
http://www.uspirg.org/news/usp/new-report-long-term-drop-how-much-people... :
http://money.cnn.com/2012/03/12/news/economy/mass-transit/index.htm
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/08/AR200903...
http://money.cnn.com/2012/03/12/news/economy/mass-transit/index.htm
http://transportationnation.org/2011/07/28/breaking-new-york-city-biking...
http://blog.bikeleague.org/blog/2011/02/ridership-up-crashes-down-safety...
These kinds of numbers and stories are not where I feel they ought to be this late into things by any means, but these are variables that matter. Not all demand destruction is necessarily people dropping out of economic activity, a lot of people are still participating but filling up a gas tank less often or in some cases not at all, but who may have always done so before.
I believe that anyone attempting to model how the future will play out who does not pay attention to these factors will be basing their predictions on faulty assumptions. A blind spot to this kind of information and subtle cultural changes well underway can throw off expected timelines. Given past predictions of how events would play out in time that were way off base, I don't believe this kind of data with potential relevance should be derided as irrelevant out of hand.
That's not true. In addition to the downtown attractions like City Hall, the Central Library, and the main police station, Calgary's LRT system connects to the University of Calgary, the Southern Alberta Institute of Technology, the Alberta College of Art, the city auditorium, the Calgary Stampede grounds, the main hockey stadium, the main football stadium, the Calgary Zoo, a few hotel districts, and numerous shopping centers.
A major gap in rail coverage is the airport, but that seems to be true of most Canadian cities, excepting Vancouver.
Downtown Calgary has the head offices of about 90% of the oil companies in Canada, plus numerous other corporate head offices. It is the second largest head office center in Canada after Toronto. There's only a limited amount of high culture there. It's mostly about money.
It even connects directly to Fish Creek Provincial Park so you can go for a walk in a relatively natural environment without having to drive. Bus service from the airport to Whitehaven station isn't too bad.
First of all, one of the errors made by those who ignore or disparage alternatives to driving in the cities is in assuming that means it only matters if everyone moves to the city. No, even if city growth were merely a trickle, a vast number of Americans already live there or in their orbit, and these places are burning far more oil than necessary to move people around, often distances that are not prohibitively far.
There is enormous amounts of fat to trim in US transportation with minimal impact on the ability to move people goods and services. Plenty of people are circling parking lots, sitting around in cars with the AC on and making 1 mile grocery store trips in a car. Enough of these worthless VMT miles get cut and it reduces consumption dramatically because of their sheer scale of waste.
Even if you live in a place where you can never imagine life without a car, that does not render the experience of others meaningless, if millions of people shift habits where it is viable, it effects the playing field of everyone. This is the problem with tunnel vision and projecting a lifetime of personal preference and bias onto people living different lives.
"The crowded places that actually have good, effective "Green Transit" service necessarily sprawl upwards"
Vertical sprawl as in skyscrapers is not a perquisite for good or viable transit service. We only think that way in the US because people think New York City and only imagine transit going with mega structures. Densities high enough to support good transit can be found with much less energy intensive buildings, and numerous mid-size, moderate density cities in the world support transit service far superior than even many places in the US with higher density.
http://pricetags.wordpress.com/2011/12/13/density-is-not-destiny/
As for families, grown ups with families do just fine in bicycling oriented cities because the kids are given safe paths to ride to school independently and parents routinely carry kids by bike as well. There was a time when a child riding a bike to school was normal here in the states not all that long ago. Riding a bike or walking to school was replaced with motor chauffeuring in about a generation. It's not nearly as difficult as many people think to make family life work without a car, or at the very least depending on a car less often.
(One of many racks at Bike It Day at Santa Monica High School, a program to boost bicycle ridership rates to school)
These were all photos from the LA region I have taken personally. If you look at images of what families accomplish in truly bicycle friendly cities in the world like Amsterdam or Copenhagen it's quite spectacular and eye opening what can be done with modest investment in creating safe space to ride, and not necessarily very high densities or giant buildings:
http://www.flickr.com/search/?q=bike%20netherlands%20family#page=0
This story about a Portland OR mom with 6 kids and no car has been getting a lot of attention, and no of course this does not work for everyone's situation, but it is possible and happening and if more people make these kinds of choices to go without the car even in-spite of challenges, this stuff matters to managing the oil curve: http://bikeportland.org/2012/06/28/with-six-kids-and-no-car-this-mom-doe...
And lessons can be learned about what we can do to make such choices easier, safer and more enjoyable. Other cities in the world have been making this stuff work for years with very modest investments. Mega billions not required, and a vast utilized fleet of bikes are sitting in garages across America unlike any of the absurd ideas of building an entirely new alternative energy car fleet.
To address criticism I know will be thrown at me, yes bikes do not work for everyone, but they can work for a lot of people for a lot of trips and that matters. The number of sub 5 and sub 2 mile car journeys in this country are staggering. It's also not an either or proposition, people can use a bike sometimes and drive other times. Copenhagen has more than a third bicycle mode share despite crap winter weather and a very high rate of car ownership at the same time. It just takes the political will to stripe and separate out more bike lanes and paths and stick some posts around to attach to.
To reinforce GaryRidesBikes point that many trips are actually more Green Transit accessible then most come to think from behind their steering wheels:
Partly inspired by this Website and its forecasts for increased gas prices I took my George Bush jr tax rebate a few years ago and bought about a $400 folding bike with it. The reason I bought a folding bike is that it is allowed on all NYC area trains and buses (In theory at least!) so it would enable me to get a lot more places with a train/bike combination. The accessibility of destinations with a folding bike taken on a train turned out to be way more than I expected!
For example I discovered that my Dentists office which I had been driving to for years even though I took the train to work was actually about 1/2 mile from the train station. I had never realized how close it actually was because driving there meant taking circuitous routes up and down entrance/exit ramps etc which were literally miles longer. I had never even looked at the direct route by bicycle right from the train station.
I could also ride my folding bike from an office out in the NJ "boonies" 3 1/2 miles to the Lyons train station in about 20-25 minutes. Of course walking that distance would have been very time-consuming but a folding bike made it feasible.
A final demonstration of the increased transit accessibility with a folding bike on the train was when the NJTPA (North Jersey Transportation Planning Association) had a meeting in the Frelinghuysen Arboretum in a location normally not considered close to any public transit. I discovered that I could take the train and again ride my folding bike 1 1/2 miles to the meeting from the train station.
The Republican chair of the committee glared at me when I asked how many people took Green Transit to the meeting and I pointed out that I did and it was possible. Of course this pointed out the great hypocrisy of the NJTPA which allegedly supported public transit when in reality the 2030 Plan they trotted out called for a 15% INCREASE in car traffic and a rise of a few percent in Green Transit. Why would a planning organization supposedly promoting public transit have a meeting someplace transit inaccessible for most?
Despite the glare from the Republican chair a lot of people came up and congratulated me on my points about actually RUNNING trains and the importance of public transit
The major problem was NOT reaching the meeting from the train but once again the abysmal off-peak frequency which meant waiting an hour if you missed the train.
There is absolutely no excuse for New Jersey NOT to be the US leader in Green Transit as we are the most densely populated State, more densely populated than China in which over 50% of the population already lives within a few miles of a train station which actually already run trains. There are 996 miles of Rail in New Jersey most of it doing almost nothing but periodic freights or tourist trains.
Why should downtown schools be dangerous? Don't you have an efficient police department patrolling everywhere which watches gang members and claps them in jail every time they do a crime or threaten someone? Oh, that's right, you live in the US where you probably don't. You would have to raise taxes to pay them.
That's actually pretty poor, but that is probably an express bus for commuters working downtown. On the off-peak most Calgarians would drive (or bicycle) to the nearest LRT station and take one of the trains which arrive every 10-15 minutes off-peak, 22 hours per day, 7 days per week. The LRT is just so much more efficient than buses.
Well, yes, it would be. But the tacit assumption is you're headed for the skyscraper district, which is where the three lines radiate from. Otherwise driving to the nearest station leaves you with no car (or bicycle, assuming you're traveling in a season when that's safe) to complete the other end of your trip. IOW it remains that the system is best designed for commuting downtown, and may be a bit lame for most anything else. That's to be expected, except in enormously densely populated (read: expensive, even the only-eight-story upward sprawl of Paris is costly to build and maintain) places, like New York, Tokyo, or Paris.
N.B. you would have to overcome a lot of political correctness to get the gangs in hand. Just throwing money at the police to keep putting the gang members through the revolving door over and over again has little effect.
LA, which has in the past been an epicenter of gang violence, a bit of an understatement, has been seeing it's violent crime rates dropping to rates not seen since the 50's, along with nearly every category of crime except bike theft. http://www.huffingtonpost.com/2010/01/06/las-crime-rate-lowest-in-_n_413...
Kids in the US are far more likely to be harmed by car crashes than any other factor by a wide margin and it is the number one cause of death for anyone under the age of 30. Cars are at the root of a number of problems and scaling back their dominance accomplishes far more than reductions in fossil fuel energy demand.
In many cases the greatest risk to one's life living in a city center is the car commuting suburbanites rushing through as quickly as they can. The dangers of city life I feel are largely overstated and based on the dated perceptions of those who either haven't lived in an urban center or not in the past 2 decades. I grew up with the 1992 riots in Korea Town on television as a kid in a suburb outside LA and today I can walk down those same streets at night with little issue or concern. The difference 20 years of slow healing and reinvestment shifting back inward rather than just outward, can make is incredible. Are all the problems gone, of course not, but things have changed, and in many ways for the better.
As for "the tacit assumption is you're headed for the skyscraper district", as I pointed out elsewhere, creating successful transit service does not require either mega density or mega buildings. http://pricetags.wordpress.com/2011/12/13/density-is-not-destiny/ and there are numerous places in world with modest population scale and density with less wealth but better transit service than most American cities.
You cited Paris, which has transit service predominately not anchored around skyscrapers, but there are much smaller cities in France investing in trams on dedicated rights of way above ground and making enormous transit gains with a lot less density, population and wealth than Paris.
A substantial number of trips being made in the US are within a 5 miles radius that takes about a half or less on a bike. Car trips under 2.5 miles are not uncommon and be reached by bike in about 15 minutes or less.
How anyone knowing what there is to know about our oil predicament can not see the obviousness of a shift away from cars taking place in response, I just cannot understand at all.
Gary RB: I think your stats are correct but your missing a key psychological dimension, most women would prefer to be in a car accident than be raped. Most men would prefer to be in a car accident than be mugged beaten and humiliated. Its the personalness of city violence that traumatizes people and damages them for years. Rape is relived thousands of times. This is why people will take their chances with the suburbs and freeways (which I agree are far more dangerous).
I'm not sure what city you live in but Seattle, Portland, San Francisco, Vancouver, DC, Boston and New York are all cities where I've seen plenty of young and middle aged women (some of them in professional attire) riding bikes in the middle of downtown. Maybe it's a "liberal thing".
I'm not sure what city you live in, but I work in downtown Vancouver and while I do see a few young women (maybe 1 for every 8 or 10 men) on bikes downtown, I see almost no middle-aged women, and none of them are in "professional attire". The vast majority of the women I see on bikes are not going either to or from work, and they most likely don't have jobs or cars. I'm sure there are a few coming over from Kits, but not many.
Now, downtown Vancouver has no personal safety issues, certainly not during the day. Riding a bicycle in traffic has significant personal safety issues, though. And it rains like 9+ months of the year here. I do not see any mass migration to bicycles until people just cannot afford to drive at all and transit stops working (or is too full, which will happen about 8 seconds after any significant number of people can no longer afford to drive).
Funny how times change. When I was a kid, my mom hauled me all over town on the back of her bike in a little metal seat and of course no helmet. Thing is traffic volumes were about half of what they are today.
I live in Seattle and part of my commute is along a major bicycle corridor which surely influences the number of riders I see. Like you I don't see any mass migration but I do agree with Gary RB's assertion above that a subtle cultural shift is underway and that those who anticipate everyone to "drive until they drop" are missing something important.
There are definitely a lot more young people riding bikes regularly than there were not that many years ago. Particularly men 20-50 commuting to work. I don't think they amount to much of a percentage of the population, though.
While I acknowledge there are concerns that matter more to women that are discouraging, and contribute to the present male/female imbalance in US bike riding rates, I think this is exaggerating things a bit. This is anecdotal but for one thing I met my wife on a social bike ride in the middle of Hollywood, so clearly she didn't feel that threatened riding in the city. Most of my friends that are couples met bike riding as well.
The cities in the world with the highest bicycle commuter rates also happen to have the most gender balance in riding, including in city centers. I think women may be more risk adverse than men, but there are things that can be done to make bicycling feel less risk taking with modest investments. Portland Oregon which has one of the highest bike commuting rates in the US also has a higher proportion of women riding as well, though but still has some ways to go to reach parity.
I like rail. I use rail. I think we should expand it.
Nevertheless,
1) rail currently is small. It serves only a very small % of vehicle miles traveled, perhaps 4% in N America, and 8% in Europe (that doesn't include bus pax-miles, which aren't fuel-efficient). Expanding that will be very slow, whether we build rail where people live, or build housing around existing rail.
2) mass transit is expensive, because of the need for drivers, as well as major new infrastructure. Look at any of the mass transit systems: I think you'll find overall costs of roughly $1 per passenger-mile: that's substantially higher than personal transportation (keep in mind that most rail requires supporting feeder buses or trolleys, which are much more expensive to operate, due to a much lower ratio of passengers to drivers). Those costs would rise very quickly if we tried to expand rail to serve a lot more people, either because of the cost of serving low-density areas, or because of the cost of building Transit-Oriented Housing.
Rail, or mass transit in general, simply can't be considered a primary solution to our transportation fuel problems.
Rail uses as much electricity as EREV/EVs, and buses use as much oil as hybrid vehicles. But, even if mass transit used no oil, and 50% as electricity as EVs, it wouldn't really matter.
Achieving a little more efficiency is really, really unimportant. The cost of wind power for an EREV/EV, for it's lifetime is a onetime investment of only $1,500.
Given that EVs can charge 100% at night and use the 50% of wind power output that occurs off-peak, they actually support the installation of 2x as much wind as they need. Wind farms produce very, very roughly half of their output during high demand periods, and the other half during periods where more electrical generation isn't really needed. That makes EVs and wind farms synergistic: the wind farms produce power when EVs need it, and the EVs absorb wind power that would otherwise be not really needed. That makes them extremely good for CO2 emissions!
Rail, on the other hand, occurs during the day. The evening rush hour coincides with the daily peak. That means that rail uses very expensive peaking power, which is difficult to provide with wind, solar or nuclear. CSP solar would work reasonably well, but it's 2x more expensive than wind, and not the best thing for Canada.
Is the long-term picture affluent people living in high priced Transit Oriented Development and using transit that gets operational subsidies?
The thing that strikes me about speculation about the impact of fuel prices on urban development: the impact of fuel prices is pretty small compared to the differentials in housing prices between urban cores and exurbs: "drive till you qualify" is alive and well.
Again, I like electric rail. I use it for the majority of my travel. It's a very nice way to travel, and it will increase the efficiency of FF consumption a little. I think it should be greatly expanded.
I just think it's not a primary solution to our PO, FF and AGW problems. That's the territory for HEV/EREV/EVs.
1) rail currently is small. It serves only a very small % of vehicle miles traveled, perhaps 4% in N America, and 8% in Europe (that doesn't include bus pax-miles, which aren't fuel-efficient).
It's small for long-distance passenger travel. The freight railroads in the US carry over 40% of the country's freight on a ton-mile basis according to the American Association of railroads. The passenger rail system could be revived if necessary.
2) mass transit is expensive, because of the need for drivers, as well as major new infrastructure. Look at any of the mass transit systems: I think you'll find overall costs of roughly $1 per passenger-mile: that's substantially higher than personal transportation
Have you ever been on the Vancouver SkyTrain? It uses fully automated trains and no drivers at all.
The operating cost of carrying a passenger on the Calgary C-Train was 27 cents per trip, although they didn't address what it was on a per-mile basis. The $1/mile number for the US assumes very low passenger loading, and the Calgary C-Train has very high passenger loading.
The Calgary C-Train is also wind powered - it buys its electricity from a wind farm.
I think you're trying to keep business-as-usual going, and BAU is going to become increasingly non-viable as fuel costs rise. The US has a lot of sunk costs in its freeways and interstate highways, but a lot of them will have to be abandoned when fuel costs go too high because people will no longer be able to afford to drive on them, and governments will no longer be able to afford to maintain them. EV's may mitigate the problem, but they will not make it go away.
The passenger rail system could be revived if necessary.
That's a mighty broad statement. I'm sure it's true, but at what capital and operating costs, with what service levels, and in how many years?
Have you ever been on the Vancouver SkyTrain? It uses fully automated trains and no drivers at all.
I'm fascinated by that. I've heard that the additional central staffing eliminated net labor savings, but I'm not sure why.
The operating cost of carrying a passenger on the Calgary C-Train was 27 cents per trip, although they didn't address what it was on a per-mile basis. The $1/mile number for the US assumes very low passenger loading, and the Calgary C-Train has very high passenger loading.
Well, sure. The $1/mile is system cost, not the cost of the central rail component. Again, keep in mind that most rail requires supporting feeder buses or trolleys, which are much more expensive to operate, due to a much lower ratio of passengers to drivers.
The Calgary C-Train is also wind powered - it buys its electricity from a wind farm.
That's great.
BAU is going to become increasingly non-viable as fuel costs rise.
Nah. Hybrids/PHEV/EREV/EV costs will cap the cost of personal transportation at a very affordable level. They actually cost less than the average new light vehicle.
Reviving passenger rail would be expensive, but in the post-peak-oil era it may become the only way people can get anywhere. I'm not holding out great hope for EV's in that regard.
The driverless trains the Vancouver SkyTrain uses are technologically advanced, but it doesn't really save them much money. They have to someone around in case of a breakdown, and in that case the person may as well drive the train. The real saving is that you only need one person per several hundred passengers, rather than several dozen on a bus.
The feeder buses in the Calgary system are much more expensive to operate than the trains - they estimated the cost at $1.50 per trip, vs. 27 cents per trip for the trains. Most of the difference is labor cost, although the rail vehicles have to be replaced much less often. In fact in the 31 year history of the system, they have only replaced one vehicle - it hit a truck on the tracks and was totaled. The rest of the original batch has another 10 years or so to go before they need to be replaced. They expect to get 40 or 50 years out of them on average.
The diesel engine is the thing that wears out fastest on a diesel bus.
The real saving is that you only need one person per several hundred passengers, rather than several dozen on a bus.
Yes, the feeders (buses, trams, etc) are very expensive, especially for good 24x7 service.
I'm not holding out great hope for EV's in that regard.
Well, you really should look at that in more detail. Consider the Prius C: it costs 2/3 as much as the average US new light vehicle($20k vs 30k), and uses 40% as much fuel. If oil prices tripled the cost of fuel per mile in a Prius C would still be no higher than the average US light vehicle.
Then, if we add $10k in batteries to the Prius C, bringing the cost only up to that of the average US new light vehicle, we'd have a plug-in with an electric range of 60 miles (3 miles/kWh x 20kWh), reducing fuel consumption to less than 10% of the average US light vehicle, which would be at a scale small enough to be covered by solely by ethanol.
Electric vehicles of various sorts will work very well. The only thing stopping them now is artificially low fuel prices.
This is, perhaps surprisingly, untrue.
http://www.monbiot.com/2006/12/05/life-coaching/
If only that were true.
Sadly, the average bus has substantially fewer passengers than the number assumed here (30), and would have fewer still if the system were intended to cover all transportation everywhere, 24x7.
Buses use perhaps .005 liters per passenger-km (with 10 passengers). That's about the same as the average small car (with no passenger), and much worse than a Prius with 1 passenger. Heck, even with Monbiot's assumption a Prius with 1 passenger does better, and you save the enormous cost of the bus driver.
Actually, there is quite a bit of reverse-flow commuting because the transit system offered discount fares to the universities and colleges along the lines, and the universities and colleges rolled them into their entrance fees. IOW, the students get very cheap fares and use them accordingly. Also, there are numerous business parks and other employment centers along the lines. The trains are full going both directions in and out of the downtown core during rush hour.
You don't need the population density of New York, Tokyo, or Paris to support a decent public transit system. You need a higher density than is typical of US suburbs, though. Calgary has been forcing up the density of its suburbs for decades, purely in the interests of efficiency.
Excessive political correctness is not generally a problem in Alberta.
Precisely my point. Their best use is to go in and out of the downtown core. If you need/want to go someplace other than the downtown core, tough luck.
It's designed as a hub-and-spoke layout. If you want to go to any of the other spokes, you have to go through the center. At the moment, there are three legs to the system, with a fourth to open next year. Two other sectors of the city are fighting over who is going to be on the fifth and sixth legs. That should blanket the city with light rail.
It could have been designed as a rectangular grid system, but that would be inefficient since the downtown core is the biggest employment center in the city, with about 150,000 jobs. Since Calgary has no downtown freeways, there is no possible way to move that many people in and out of the core using the rather narrow downtown streets, so the majority of people who work downtown have to take transit, walk, or bicycle to work.
The thing is that you CAN get to other sectors of the city by going through the downtown core, and I've done it numerous times. The ride is not an onerous one and doesn't take that long. I know a number of people who do a complete end-to-end commute from one end of the system to the diagonally opposite one. The good thing about it is that you can get a fair amount of work done using your smartphone while commuting.
You would have to overcome a lot of political correctness to get the gangs in hand.
Amen, how very true! The mainstream's (D + R duopoly, plus the corporate media) refusal to admit that unemployment and poverty are the obvious main engines of ghettoization and street crime are among the most implacably defended political correctnesses out there. In order to really remove the incentive for jackin and crackin, we'd have to create an awful lot of living-wage public-sector jobs!
Luckily, that's precisely what we need to do anyhow, so that we can use human muscle and brain to reconstruct our towns toward sustainable living.
Unemployment would not be as big a factor if there was a basic income guarantee, but that's probably a hotter potato than public-sector jobs.
The problem with a “basic income guarantee” is where there is “free” money there will be a significant number of people that will work the system to live off of it. Add a little unreported income, some “free” money from the government, Food Stamps, other social services, and you can get by. Not the lifestyle that I would want, but I know of several people here in Santa Cruz, CA that live it. About 10 years ago San Francisco was spending $ 200 million dollars a year supporting the “homeless”. About $14,000 per person mostly payed to people supplying the help, and services. Some called them poverty pimps.
You're not getting the point of basic income; you're supposed to be able to live off of it without working. The idea is to get rid of the worst forms of poverty. And your last example is actually the textbook reason that basic income is touted as a good idea - we're spending as much or more by letting people be homeless, poor, etc. So instead, pay them enough to live on. "Housing first", where the homeless are given housing right away and without preconditions like "you must go to susbstance abuse counseling", has been shown to greatly improve the health of those in it, and greatly reduce the money spent on them by ERs, police, etc., to the point of saving money in many cases.
Basically, the basic income idea is that people now suffer because we assume that everyone must work to live, or rather, everyone without means provided to them in advance must work to live. Provide the basics, enough to live on, and not only will the people involved (which is everyone - basic income is a scheme where everyone recieves it) be better off, but society as a whole will be better off.
Personally, I would love just to have an end to the idea that poor people are somehow freeloaders. And those who inherit wealth, grow up with all the support of a rich family, go to private schools as kids, etc, have somehow pulled themselves up by their bootstraps? Don't make me laugh. Even Obama went to Punahou!
I also meant to point out that the US has overbuilt parking nearly everywhere. At any given time unutilized and underutilized parking lots are not an insignificant amount of urban and suburban land use. The scale of poorly used land that could easily be converted to other uses quickly and cheaply are staggering, and UCLA professor and economist Donald Shoup's The High Cost of Free Parking is an eye opening read on that subject.
Swap out a few parking lots with an open field and suddenly fields to play in for kids are not some epic journey to travel to or isolated from where people live or conduct business.
LOL. Distance to the nearest suitable field is hardly ever a big problem except in places like Manhattan, and in places like that it'll remain a problem because land is simply too costly. The real problem is finding a league or club with a level of skill and competition suited to one's own world-class snowflake. That's where traveling a third of the way across the state most weekends enters the picture. And these days it can start at age five.
I often find that people who say they see very little change to our system in the last 4 years are those who never step outside of a windshield perspective.
As a regular transit user and bicyclist in the Los Angeles region, the signs of shifting to alternative modes of transportation are easily apparent to the eye as well as supported in the numbers. Union Station in Downtown LA is bustling today to an extent quite unlike anything I had seen in my lifetime living in the region. New businesses are popping up inside the station to take advantage of the growing hub of human activity. I'm also seeing a lot more people who do not meet the often cited "transit dependent user". People buzzing away a smart phones and tons of Kings jerseys on the trains for the big games. Bit by bit, public transit is becoming normalized in a city typically defined by it's freeways and car culture.
The Mayor of Los Angeles is now one of the biggest advocates for public transit spending in the United States, and has been busting the chops of the LADOT to pick up the pace on actually implementing the new bike plan update. More bikes are showing up on streets, my ride to work in Santa Monica I now stop at intersections sometimes and see more bikes lined up than cars at the intersection along routes with bike lanes, quite unlike even just a couple years ago.
If you went back 5 years and told someone living in LA what the political climate around transportation would be like today they would think you were joking. It's no joke, change is happening and more is coming.
My own eyes tell me the same story here in New Jersey as LA
When I first began taking the train to Summit in 1997 and riding the bike or taking the newly reinstated shuttle bus to Bell Labs in Murray Hill it was almost the only shuttle or bus at the Summit train station. Now in 2012 there are so many shuttles, vans and full-sized buses that there is hardly enough room for them all. The Bell Labs shuttle I used to take when not riding my bike is now a fullsized bus not just a jitney. My current company has benefited in recruiting by being close to Transit as a number of people on the shuttle vans, which we convinced them to triple, commute FROM New York City TO New Jersey. As to the point about the younger generation - the other day there were 44 riders on just my company's Summit train shuttle - mostly all interns.
Furthermore the other day I took my folding bike and the bike rack was so full I had to lock it to a handrail!
Yeah I was just in Summit a couple hours ago using NJ Transit. I go every year just to visit and eat at a local restaurant and the positive changes over the years involving NJ Transit and the city itself are notiable.
More bike stories!
Last weekend, my 16 year old son and I rode the Seattle To Portland Bicycle Classic, a two-day, 200-mile ride that was expanded to almost 12,000 participants this year. This ride is not just for bike racers. I was surprised at how many overweight and older people participated -- I'm not in such great shape myself. ;-)
Once in Portland, we stayed with friends, walked and took mass transit to get to different neighborhoods and ended up taking the Amtrak Cascades back to Seattle. (We let the ride organizers transport our bikes back to Seattle on trucks but we could easily have used them in bike-friendly Portland and then taken them on the train.)
Bikes and trains are the perfect way to take a short vacation to a neighboring city or see the intervening countryside.
Jon
I am a strong believer in bike + train traveling and frequently do so. Trains are energy efficient at carrying a lot of people and goods far distances, but lack flexibility in getting around once you arrive at a station. Bikes can fill this role well even where other local connecting transit service is lacking, either by carrying bikes aboard or through bike sharing anchored at stations. It would not take much in the way of money and resources to dramatically improve the viability of this way of travel compared to the wasted effort still going into highways and road widening. Our problem is as much mental as it is one of physical constraints.
Gail should be encouraged by this development, lets hope it passes:
http://www.nytimes.com/2012/07/16/us/atlanta-area-residents-to-vote-on-t...
For Transit Relief, Congested Atlanta Ponders a Penny Tax
Along with the other master of sprawl, Los Angeles which is also finally rebuilding the Green public transit destroyed decades ago in the great Trolley buyout conspiracy by GM, Firestone, Chevron and other Auto Addiction Corporations, it looks like Atlanta may finally be waking up to the 21st Century need for Green Transit!
52% is not enough but far more than the usual pennies dropped off the Auto Addiction spending table!
You should probably be aware that the Atlanta Sierra Club opposes the new tax, for a variety of reasons, including the following:
Having been involved in feasibility studies regarding Atlanta's transportation issues, I've witnessed how, historically, it has been politically impossible to approve funding that doesn't give the lion's share to roadway expansion. A primary problem (discussed here by others) in Metro Atlanta and other US cities is the low population density.
This presentation, "Evaluation of Atlanta's (Region 3) T-SPLOST discusses this (see slide 18) and how Atlanta's density compares to other major cities worldwide. People are just too spread out, and costs go up exponentially, as do demands for funding equity, regionally. People simply don't want to pay for services they are unlikely to use or receive. It's an old debate.
Humbug to the population density excuse.
In the 1940's the US population was less than half that of todays and yet trolley
systems existed in Wisconsin, Kansas, LA. Vermont had trains running on the hour to the sparsely populated Northeast Kingdom around St. Johnsbury.
Atlanta itself STARTED as a major Rail junction.
Those tracks still exist and are still used for freight. What can be done to convert them to allow passenger service again? What highway lanes can be converted to lightrail?
If you read "Stop Signs: Cars and Capitalism on the road to economic, social and ecological ruin" you will discover that besides the GM centered conspiracy to destroy trolley systems all over the US since the 1920's that GM and the Auto Addiction pushers also subsidized "Urban Planning" in many Universities to insure Auto Addiction.
There are still many Urban Planners indoctrinated in that viewpoint, indeed many who do not even know any other options once existed and in fact flourished all over the USA
before the Auto Addiction takeover in a much more rural and less populated country.
What is politically feasible and technically doable are largely unrelated. When you become King, I'll be glad to help, but for now we're at the mercy of voters, politicians, lobbyists and budget shortfalls. As I've shown, the lack of population density makes costs go up exponentially.
Regarding Metro Atlanta this is roughly the area we're discussing. I suggest you zoom in and cruise around a bit. Keep in mind that very little transportation infrastructure currently exists relative to the sprawl, excepting roads of course.
GNE/CNI Vs. Total Public Debt
GNE = Global Net Oil Exports*
CNI = Chindia's Combined Net Oil Imports
*Top 33 net oil exporters in 2005, total petroleum liquids, BP Data + Minor EIA data
Debt Data:
http://www.economist.com/content/global_debt_clock
In 2002, there were 11 barrels of GNE for every barrel that Chindia net imported.
In 2005, there were 8.9 barrels of GNE for every barrel that Chindia net imported.
In 2011, there were 5.3 barrels of GNE for every barrel that Chindia net imported.
At the 2005 to 2011 rate decline in the GNE/CNI ratio (8.6%/year), the ratio would be down to 1.0 in 2030. In other words, at the current rate of decline in the GNE/CNI ratio, in 18 years China & India alone would be consuming 100% of GNE. Of course, I don't think this will actually happen, but it's important to note that the rate of decline in the ratio accelerated from 2008 to 2011, versus 2005 to 2008. There are signs of (relative) weakness in both China and India; however, there are also indications that China's domestic oil production may be peaking, which would increase the demand for imports.
In any case, this trend would make, and in my opinion has made, debt service, shall we say, "Somewhat difficult." Note that global annual (Brent) crude oil prices have doubled twice over this time frame, from $25 in 2002 to $55 in 2005 and then from $55 in 2005 to $111 in 2011 (with a year over year decline in 2009).
In my opinion, most oil importing OECD countries around the world, in a determined effort to deny the reality of resource limits, have gone massively into debt in an attempt to keep their economies going, waiting for what they believe will be an inevitable decline in oil prices, as a result of the resumption of the robust increases in global oil supplies that we have seen in previous decades.
It seems to me that we will run into problems even before 2030. The system will "break" in one way or another, in not too many years. Somebody has to do without.
I think that we started running into problems in 2005. Normalized oil consumption for China, India, Top 33 Net Oil Exporters and the US from 2002 to 2010 (trends continued in 2011), as the volume of Global Net Exports that are available to importers other than China & India fell by five mbpd, from 40 mbpd in 2005 to 35 mbpd in 2011:
Bullseye. What a mirror image! We'll see if the world economies can squeak by to generate $222 in 2023. Just trending: double-in-3, double-again-in-6, so double-again-in-12 years would be 2023.
Desert
Incidentally, note that from 2002 to 2011, the absolute value of the rate of change in total Global Pubic Debt (+8.5%/year) was about the same as the absolute value of the rate of change in the GNE/CNI ratio (-8.1%/year).
The low R2 value is I think a result of different countries with different industry structures having different elasticities oil/GDP growth and then also being in different economic cycles in a given year or period.
The IEA had in their February 2012 Monthly Oil Market Report available here:
http://omrpublic.iea.org/archiveresults.asp?formsection=full+issue&formd...
a graph showing:
2009: -1% oil decline, -1% GDP decline
2010: 3% oil growth, 5% GDP growth
2011: 1% oil growth, 4% GDP growth
The trendline 1981-2011 cuts the 4 % GDP growth at 1.5% oil growth.
The IMF calculated in April this year:
If the global economy grows at 4% pa (all governments would like that) then global oil supplies could grow 0.9 % pa (by an additional 8.2 mb/d until 2021) but then the oil price would need to increase to US$ 180 a barrel over this period in order to get that extra oil. More details in this post:
20/5/2012
IMF team warns of global economy entering uncharted territory with US$ 180 a barrel in 2021
http://crudeoilpeak.info/imf-team-warns-of-global-economy-entering-uncha...
Whether the economy can survive $180 oil in 2021 and whether the oil flows would be physically there is another question, of course
I should mention that there is a difference between IMF GDP amounts, and amounts as shown by the USDA economic research service. (IMF GDP amounts tend to be a little higher, apparently because their approach gives more weight to developing and emerging economies. I talk a little about this in the Our Finite World post that matches up with this post. How much oil growth do we need to support world GDP growth?
The low R-squared values just imply that Gail's model only explains about 50% of the variance. In my mind this implies the model is not that explanatory, but then what is a 'good' value for R-squared is also dependent on the data. R-squared also does not indicate whether the independent variables are a true cause of the changes in the dependent variable (correlation does not imply causation), although Gail does propose a mechanism why this might be the case.
I would say the model's not that good a fit to the data.
Crobar, sorry but I can't agree. Gail explains 50% of the variance with ONE (1) variable. That means r > .7, significant at what, .1% ? The usual red flags (common underlying variable, correlation by outlier, sensitivity to time window, non-linear transformation of data) are absent.
Sounds more like an important result to me.
I am confused by paragraph 2 and 5 after figure 12.
In paragraph 2, x=0.4%
y = 0.741 x + 0.0193 or y = 0.741 x + 1.93%
means y (GDP) = 0.741(.4) + 1.93 = 2.23%
ditto for paragrah 5.
Great analysis, Gail, but I agree with canabuck's comment. In the equation, 0.0193 is not 0.0193% -- it is 1.93%.
I will go back and fix up the numbers. Units seem like they are the easiest thing to mess up. I applied my formulas to numbers rather than percents - doesn't work.
There are several numbers that change.
Gail, this analysis and the correlations that you have identified are very interesting. When looking at world GDP it smoothes out some of the individual country ups and downs. To take this a step further, I think it would be informative to try and quantify the amount of demand that has been brought forward over the last 30 years due to the large increase in worldwide debt and deferred savings in the form of overly optimistic investment returns.
Since debt and under funded liabilities represent several multiples of GDP, the unwinding of the debt/credit bubble and the eventual reckoning of the unfunded liabilities should have a depressing effect on oil demand going forward. The extent of the demand destruction should, at least at a simplistic level, equal the amount of demand that was brought forward. Perhaps a look at what GDP growth may have looked like without the run up in debt and more reasonable investment assumptions compared to the actual GDP growth. The difference could then be compared to oil consumption to provide an idea of how much consumption was actually unsustainable debt financed consumption. This could give us an idea of where demand might be in the future once the debt bubble and unfunded liabilities are reckoned with.
I will have to think about that one.
We have really been in one very long run-up in debt, especially on the non-governmental side, since World War II. See my post, The 65 year debt bubble. In order to sell very many houses and cars (and even things like refrigerators and stoves, or to enable the building of new factories), there needs to be a mechanism to use debt to pay in advance for the items.
I am not sure where I would get the data, but it is my impression that Russia to an extent is representative of what happens when there is little debt outside the governmental sector (until recently), since 1991. I visited Russia earlier this summer. There were a lot of very old buildings, some maintained better than others, and much old infrastructure (water and sewer pipelines, for example). Most people don't have cars. Except when there is investment from outside (or reinvestment within the energy sector), there doesn't seem to be much investment being done. A family I talked to had built the house they were living in, stick by stick, over a 16 year period, as they were able to set aside enough money to buy more materials for their home. Others in our group talked about other families who had done similar things. I expect it would be similarly difficult to start a new businesses.
This is a graph of the Former Soviet Union's oil production and consumption. The Soviet Union came apart in late 1991. The world today would be in worse situation, because we wouldn't have others outside to help fix up afterwards.
4/10/2010
Russia's oil peak and the German reunification
http://www.crudeoilpeak.com/?p=1912
Nice post! The later rise in oil production for the Russians came with the increase in price that raised prices high enough to make extraction from more complex reservoirs make sense. This is a graph I made a while ago:
You and Dave Summers (Heading Out) seem to agree on Russia's long term oil prospects--not too good. I often think about where world oil supply would be now, if Russia had been able to develop its oil fields quickly back in the 1990s. It seems like the world might be in very tough shape now.
Gail, thanks for the link, great article and comments.
Just wondering, where in Russia have you been to?
I took a boat ride from St. Petersburg to Moscow, using a combination of waterways and lakes (Viking Tours). The trip actually goes somewhat northeast from St. Petersburg before it turned south to Moscow.
The trip was interesting. Russia has very little in the way of ports--which would seem to be a problem. The inland waterway system was put in place years ago, but is limited by lock capacity, which is not very great. We were told that reservations to go through the locks need to be made as much as two years in advance, and that Viking cannot add tour boats. Needless to say, exports through this route would seem to be equally constrained.
We had a chance to visit homes and schools. We also stopped at a communal apartment in St. Petersburg. The tour offered various options, and we took the options that were of most interest. The standard of living is quite low. We saw quite a few women begging or selling local flowers. In smaller cities, there are a lot of closed, empty shops. We saw a lot of what looked like abandoned factory and transportation things--rusting ships and other rusting materials.
Russia (like the US and Europe) finds itself not very competitive with Asia on manufactured goods, so its manufacturing has dwindled. Russia is not even very competitive on meat production, so imports meat. A lot of infrastructure (like the water systems) have not been maintained well. I understand water quality is worse now than in 1991--water often needs to be boiled to be potable.
Oil, natural gas, coal, and wood seem to be Russia's main exports now.
I see.
I live 1,000 miles to the east of Moscow. This passage:
made me smile. If only!
This June I was on a road trip around European Russia. Check out my route, 5,000 miles. A lot of vivid memories!
Traffic is ridiculous in Moscow and St. Petersburg with the number of cars that are there. Parking has not been planned for, so parking is a true mess. I haven't tried to determine official statistics, but relative to the US, the proportion with cars I am sure is low. With everyone living in big apartment buildings in Moscow (individual houses are not permitted), even a modest number of cars can overwhelm the system.
That's quite the trip! Without knowing Russian, it would be hard to make any such trip.
Gail,
I think there is a calculation error in your analysis of what happens if oil supply contracts. You are using the equation from Fig. 12:
"If we want world real GDP to grow by 4.0% per year, the fit from Figure 12 (based on the equation y = 0.741 x + 0.0193) would suggest that world oil supply needs to rise by 3.0% per year. "
Therefore, the same equation should be used for predicting what happens if oil supply stalls or contracts. If oil supply no longer increases, x is zero and growth is 1.93%. If oil supply contracts by 1%, growth is still 1.19% etc. According to your model, oil supply has to decline 2.6% per year for growth to stall.
Therefore, the regression in Fig. 12 is evidence that the link between oil and growth is not perfect, and that there is a substitution effect.
I fixed it. Numbers should be OK now.
Aside from biologist's comment, which I find to be right and which correctly argues for the existence of a substitution effect (which Gail has anyway at least partially accounted for, when hinting at a 'depressed' oil supply increase due to technological changes, etc.), and though this seems to be an interesting analysis overall, I still find it lacking on at least three accounts - two general, and a third specific one:
1. A regression with only one IV is trivial, because it simply calculates a correlation without taking any other intervening variables into account. The model seems to suffer from an acute specification bias, even from a heuristic point of view;
2. Gail should defend in a much better way the selection bias she incurs in when choosing to limit her analysis to the period 1965-2011 for oil and 1969-2011 for GDP. Lack of data (which seems strange to me, given that world GDP estimates stretch at least as far back as the 1830s, and very reliably at least as far as the 1880s) is not and cannot be an excuse, specifically because any theoretical cutoff point which is chronologically further away from the end of WWII is potentially misleading when one is trying to account for underlying decreasing trends of any kind.
At the very least, the model design is left-censoring all GDP data before 1969 that should be used for the estimation of the first exponential trend. Also, even in the absence of a single specific trend for the whole post-WWII period, modern statistical tools allow for the swift identification and analysis of time-series unit roots;
3. When fitting exponential lines, Gail chose to disregard periods of declining GDP or world oil demand. This is consistent in all of his analysis but for the period 2007-2011. Why include the latter recession period in the analysis? Logically, it should be left out, and any calculation be left for the recovery period which is underway, after a sufficient number of years (i.e., you should repeat your analysis in, say, 2018, with 2012-2017 world GDP data).
Wow, Billy, you sound like just the guy for the job ;-)
Well, for starters, World GDP can be extracted and calculated from the 1830s via the Maddison historical GDP data (which can be found here: http://www.worldeconomics.com/Data/MadisonHistoricalGDP/Madison%20Histor... ) or at least from the 1950s from the World Economy dataset (http://www.theworldeconomy.org/statistics.htm).
For reliable world totals, one can refer to this classic table (data to be found at the bottom for World GDP since 1950, and World GDP that can be easily approximated for 1945-1949 years): http://www.ggdc.net/maddison/Historical_Statistics/horizontal-file_02-20... .
Welcome Billy,
Thanks for your astute and on-topic observations and for providing links to useful datasets. As a serious data junkie I hope that you stick around and continue to contribute in this manner.
Jon
The regression in the posts was an add-on at the end. The post was already very long, and it was in response to a "Why don't you look at this too?" request. It was not the major point of the post.
One thing I discovered in looking at this is that no two series of world GDPs agree regarding year to year percentage increases. I have a copy of Angus Maddison's estimates. I originally planned to tack on his estimates of GDP increases from 1965 to 1969 at the beginning, but decided against it. There weren't enough years of add-on to justify the change in data source.
I also considered analyzing GDPs and oil/energy consumption over a longer period, say back to 1830, perhaps using Maddison's data for GDP and Vlaclav Smil's energy estimates (used in my World Energy Consumption since 1820 post, but that would be a big project. It is a task for another day.
I have various times in the past fit trend exponential trend lines to oil supply curves, trying to explain to people that indeed, there is a difference between old periods and new periods. The periods when oil supply is going down are truly different--from "normal" growth, and from each other. To me, it seemed like a normal thing to do. Someone else can look at this differently, if they choose.
In the recent period, oil production has been relatively flat. This shows up quite clearly in data of various sorts, such as prior BP reports, and EIA oil supply reports. The current BP consumption data is strange though--it has oil supply going up to 2007, and then leveling. I chose the approach I chose based on knowing that all the data we know about shows a "flat period" of consumption at the end. Again, if you want to do something else, do it your way. I didn't leave out all recessions--what I did was leave out dips in oil consumption.
All the data we are working with (both oil supply and world real GDP) has a huge amount of "noise" in it. I am not convinced that your tools that supposedly add more precision will be as helpful as you think.
Gail, first of all thanks for your answer.
My first reservation, the one about model specification, is an important one and I must admit I am not at all satisfied by your answer. Adding IVs would not only serve to increase the explanatory power of the model, but also to discard the possibility that the relationship between world GDP and world oil supplies is a spurious one. A hierarchical, multi-level model could possibly explain much more, as you could be including a nested level of, e.g., GDP growth for all the different countries in the world (or all relevant ones), and not just its world composition.
It's all right, though: I could still stick to your model and use it for a heuristic analysis.
The left-censoring problem seems more serious to me, though. How did you fit the first exponential curve to the data? You obviously started from 1965 (or from 1969), disregarding everything happening before that period. It is not necessary that you go all the way back to the 1850s: you could simply use data going back to 1945, and see if your, or different, curves still fit.
Also, the cut points should be theoretically grounded as not to appear ad hoc. The 1993-2007 fitted exponential line in the world GDP data, for example, could actually be broken up into two lines: 1993-1999 and 2002-2007. The reason why you chose such a long trend line instead of the two is, I suspect, given by the fact that you would not get a 3.1% average growth per year but something quite different, especially for the 2002-2007 period (or even 2001-2007, for that matter), that could possibly disprove or complicate your analysis. Also, to further avoid accusations of ad hoc cut points, you should at least do away with the 2007-2011 line, which is clearly not fitting the data and concerns not just a 'flat' period but an outright recession.
Thus, advices are as simple as follows:
1. extend the analysis to the 1945-2011 period;
2. try different cutoff points and check for model consistency (this is probably the most important point here);
3. do away with the 2007-2011 trend line.
As per the noise in the data, it really is not that great a problem. Any socio-political study will usually face a lot of noise in the data: that is why we have lots of statistical tools to correct for measurement error and, when these fail, we are left with poor data - as simple as that. Fitting a poor model to poor data is, in my opinion, not a way to ease the problems but to further aggravate them.
I'm surprised WebHubbleTelescope is not chiming in.
The discussion is interesting but the post itself hints at causation when all there is evidence for is correlation. I don't see models, only data fitting.
Also, as usual, debt in the post and discussion is considered in a one dimensional and one sided manner, something which not helpful.
I am working on a couple of theses and connections and when it has a bit more shape I'll post or provide a link.
Rgds
WeekendPeak
When you are fitting any line to any data, you are implicitly assuming an underlying model, as simple as that may be.
In this case, the fit is univariate or bivariate, and in the former case Gail is fitting a modified version of non-linear (exponential) splines.
I simply hinted at ways to pass from a suggestive/manipulative use of the data to a much more rigorous one: increasing the time-span, checking for robustness by changing the cutoff points, being consistent throughout the whole analysis (thus disregarding the last period of recession), are three of the most important things any researcher could do at this point.
As they are now, the data and the non-linear fits are argumentatively useless because they can be attacked from so many sides. Data should not be manipulated (censored, arbitrarily cut, etc.) in order to support some theoretical argument: it should serve to confirm or disprove a theory, and it could even be useful to adapt a simple theory to a (much) more complex reality, things that in this case seem lacking to me.
Thanks for expressing my point so much more succinctly.
Rgds
WeekendPeak
Well hell, the oil supply starts to shrink and GDP starts to shrink, then it goes negative. We will get negative GDP growth for decades after that.
But not to worry, we can all walk to work or take some Green Energy Transit something or other to our jobs.
Yeah right, what jobs?
Ron P.
Spoil sport!
Hee, hee.
Blind pessimism is of little more use than blind optimism. Leaving a gaping blind spot where possible mitigating options exist is not going to produce an accurate model or vision of how future events can or will transpire. There are ranges between "a perfect world" and a total unmitigated disaster, and not everyone has to jump on bikes or transit, or all at once, for it to become an important point of consideration in how the transition from an oil driven society starts to unwind.
If "green transit" (a term I find somewhat disagreeable, loaded and partisan as a bike and transit user myself), is of little value, than what are your bright ideas for transportation, or do you think people will simply drive their cars until they can't move anymore?
IMHO bikes and transit will have to feature heavily in the transition to what ever comes next because they maintain mobility with far fewer resources than private motoring, and if the means to keep all the cars running diminishes that will not stop people from seeking mobility however one can come by it.
Bikes I think will increasingly become important for moving people goods and services because they can be used to carry loads beyond what can be carried by hand and require very little private or public investment. On a bike one can travel greater distance in less time on fewer calories than walking. A fleet of millions of bikes is already built and sits underutilized spread all over the country, that can be kept in working order with very little input and minimal expertise. Bicycle co-ops have sprung up in many urban areas to teach people to become their own mechanic and build up bikes from used parts for low cost.
I met a guy who does home contracting work who carries all his tools by bike and most of his supplies using a heavy duty bike trailer, and for bigger job than the bike can handle he does delivery to the site, but only has to do this rarely. I met him at the first annual Portland Oregon Disaster Relief trials when I took the train there last month, an informal staged race to simulate using cargo bikes to pick and carry heavy emergency supplies between various points in the city. Local hand-made bike builders showed off their latest bikes along with some major brands as well.
Anyone who assumes Americans will not, or cannot start to make these kinds of mitigating measures in response to declining energy and wealth, or ignores the emerging trends in this direction already visible, will find that their faulty assumptions will produce data and predictions proven wrong by events in the real world, where people dynamically respond to changing circumstance.
Cherry picked and means absolutely nothing. I would like to interview the individual. Home contracting work (what the hell is this)? Good luck with the competition if others get wind of the "profitability" of "home contracting work" with a bicycle.
So you show a few photos of recreational bike riders.
If the depression really bites, we are not all going to be riding bikes. If you have an income, a job of sorts you may need it to commute if the distance and terrain is convenient. Most people will be on shankes pony. Check Africa. Check the shanty towns of India and South America.
Most pictures of lots of bike commuters are in regions where the economy uses cheap labor. They are a necessity that quickly becomes obsolete when the need to commute wanes. If you think bikes are the future then buy a cycle retail shop, sit back and reap the rewards, an economic downturn would only enhance your profits (according to you).
You seem to think that when FF's become scarce, that the streets will be filled with millions of happy bikers waving to each other as they go to work and shops with the money they have, from the many jobs created by a great new cycle industry or something.
In the wind down of the industrial age, everything, everything will be tried. It won't just be bikes. It will be steam cars, electric cars, buses, hitch-hiking, car pooling and donkey and cart. Consider WWII. Humans are resourceful and no single avenue of mediation will be tried, be universally acceptable nor a solution.
"transition" what is that. What do you expect the "transition" will be to?
These may all be tried, but none of them will help mitigate the descent as much as the bicycle, and in fact most of them will be counter-productive to the degree that they are pursued.
http://bikeportland.org/2012/02/14/general-contractor-builds-business-by...
The contractor I met recently who does various handy man jobs by bike, is Chris Sanderson from Portland Oregon (his bike pictured below), and if you would like to interview him, his business contact information can be found here:
http://redirectguide.com/portland_vancouver/el.asp?listingid=117AEB1&ana...
In North Hampton Massachusetts, there is no subsidized municipal trash pick up service. People are responsible to carry their own trash and recycling to processing centers or pay a private service to do pick up. An interesting development that grew out of that is that hauling waste and recycling by bike became economically viable against trucking, and a service started that does just that. The co-operatively run Pedal People, does trash, compost, and recycling pick up service there, as well as other kinds of delivery services, and they don't stop for the winter. A bike with a trailer on moderate terrain with a fit rider is more than capable of hauling several hundred pounds of cargo, and this is already being done in the US, it's not just something happening in less industrialized nations. It may not be common yet, but it could be, and there is starting to become some momentum moving in that direction.
http://www.pedalpeople.com/index.php?page=12
Even UPS began experimenting with bikes starting a few years ago to offset peak demand load because it's cheaper to use a smaller fleet of bikes and temporary contractors for peak season than to buy additional trucks that will be underutilized and stored most of the year.
http://bikeportland.org/2011/11/01/ups-looking-to-hire-49-people-for-sea...
I also didn't say bikes would replace the importance of walking, ultimately walking should be the metric by which we organize human life (I also advocate for walkable urbanism in my locality), but bicycling can replace many trips unnecessarily made by cars today, and unlike other alternative vehicle ideas, we have an underutilized fleet of millions of bicycles already built and sitting around. Given that much of suburbia is already built, inhabited and poorly designed for walk-ability, riding a bike will be an attractive alternative as driving declines and there are lots of bikes laying around.
Even if the means to replace or build entire new bikes were lost, very little input can keep a bike in working order for a very long time and co-op run bike shops have sprung up in cities and towns all over the country, already gathering spare and salved bike parts for use in building up and repairing used bikes. There are 5 such co-ops operating in the Los Angeles area already. The first in LA was started in 2002 by a local bike messenger, and more have been popping up anchored in various corners of the region since then, making it such that most people in this very spread out cityscape are not far from one.
In France nearly everyone with a bike rides an old Peugeot, but Peugeot hasn't been making new bikes for decades. My wife and I have a Schwinn tandem acquired for relatively cheap that is much older than we are and we were able to get it in working order without much work and fairly simple tools at the Bikerowave bicycle co-op near us.
I think bicycling can and will play a larger role in American life in the not so distant future. This can be a mitigating factor against energy decline that can draw down energy use as the economics of driving strain, while still enabling a level of participation in the economy that is not as harsh as suddenly dropping out, though may be more difficult and physically demanding. Compared to many other ideas like trying to keep the cars running but by other means, bikes have a lot of advantageous characteristics. Those who ignore this possibility and potential will likely make faulty assumptions that can result in recommendations that are counter productive or projections that are inaccurate.
What the transition will be to, I don't know and I don't think anyone else does either, it's too far out with too many variables in-between. What ever comes after will be a lot different than today out of necessity, but it won't exactly be like what preceded it either because the scope of industrial stuff that already exists. Hopefully some worthwhile understandings will carry on and prevent repeating some of the dead end ideas of the past. I'm most interested in how the first part plays out because that is where we are, and we've got to take one step at a time down the curve of fossil fuel dependency.
Gary, there is nothing blind about my pessimism. I have been on this list for six and one half years and have expressed my pessimism in one hundred different ways.
Do you really think riding bikes or public transit will fix the problem? When oil production starts to decline, it will decline forever. The idea that we can just convert to "something else" or start riding bikes and taking the bus and that will fix everything is ludicrous.
The world is deep, deep into overshoot. There is no cure for overshoot. Massive amounts of cheap energy, from fossil fuels, has allowed the population to explode. And as that cheap fossil energy begins to decline, the population will do likewise.
This short essay explains my position. The author, Dr. David Price, died in 1998. He was a pessimist just as I. And his pessimism was not hollow either. Energy and Human Evolution
Ron P.
I never used the word fix, I have been using the word mitigate, to make less severe, serious, or painful, but it does not solve. I also try to avoid use of the word problem because it implies there is a solution to a prior state. So I try to be conscious about using words like dilemma and predicament instead. You are the one putting the word fix into my mouth. You also didn't answer the question I posed to you.
Will bicycling fix this mess, of course not, I said no such thing. But it is one of a number of factors which can and I believe will extend the curve of collapse as more people adopt their use for local transportation needs. Despite this potential as an effective tool, bicycling, which is already one of the most common recreational activities in the US, seems to be routinely ignored out of hand. Meanwhile nonsense like mass EV's, slightly more fuel efficient engines or even solar panel laser beams seem to command more attention here than any progress already being made in mode shift away from vehicle miles traveled in cars. It's no small feat that many young people today are becoming indifferent about wanting cars and it is a variable that deserves attention.
Would a significant adoption of bicycling for viable trips fix the food supply chain problem, of course not. But what it can do is free up a lot of oil that is burnt mostly needlessly in mass every day currently, and instead it could be used for those things which are necessities for survival. There is also a start up company using bikes in Portland to transport food and supplies between small urban land plots to put more underutilized land into productive use as local food production. These little shoots demonstrating other approaches to these issues should not be simply ignored.
This doesn't fix the overshoot problem, but it buys time. Bicycling is one of a number of measures with the potential to lesson the pain on a transition toward what ever a truly sustainable society is, and that is likely far smaller than the scale of today. I don't doubt there will be a declining population within my lifetime, but I'm more inclined toward Greer's take that a drawn out grind of slightly more death than replacement birth year after year beyond peak and not some sudden collapse.
I've reduced my daily use for transportation to just the calories I eat, and I try to source my food as locally as possible. It's not an impossible task, and I know many others making these shifts. Friends of mine who wrote the book The Urban Homestead, with their own single family home in the Silver Lake neighborhood of LA is producing nearly all of their food besides grains in their front and backyard. This kind of stuff does not fix the imbalance, but these are the kinds of things powerful enough to shape big picture outcomes and timelines if enough people do them, and I believe they will.
A machine capable of transporting a person with modest additional cargo loads with fewer calories in less time than even walking demands attention, not derision, from anyone serious about our energy dilemma.
Really what are you on about Gary. I just don't get it. Are you saying everyone buy a bike because it will make things easier. Do you want the government to say "buy a bike now, it will help the economy and you later"! Do you want legislation for cycle lanes, parking spaces and tax breaks?
Local transportation needs??? What's this, a suburb with no fuel but employment, food on the shelf and BBQ's to buy at Walmart? If it gets so bad that we all need bikes, it's too bloody late.
Bikes are good, I have two electric and an electric conversion kit, I have five other bikes, three stored. I also have a cache of spares. I see the need for a bike in the future, when fuel is available but hard to get and I need to hoard and conserve. A bike might make the difference between any number of situations but I do not see recreational biking as something I'll need.
So you are not a guru who has seen the future we are blind to. I would say most peak oil aware individuals understand that to get around without fuel, a bike will do nicely for a while. We are not transitioning to a utopian world of full employment, vibrant economy and bicycle commuters.
We are not transitioning to a world of want populated by people riding bikes for no good reason. There will still be the haves and the have nots. I don't think owning a bike will make the slightest diffence to an individual in the long run, except something to sell to buy an item of more immediate importance.
Jobs will dictate the future. The unemployed will move out of necessity, they have no choice. They will move to where there are jobs or where the perception of work is. There will be shanty towns and ghettos. Life is going to be hard and continue getting harder. The competition for jobs will be enormous and overwhelm the majority. If you have a job you will have won the eqivalent of the lottery, bike or no bike.
I think people are misreading my bringing up bikes as recreation. I pointed it out because the bikes are already there, people often have them for leisure and may already ride them occasionally. In the city I live in more than 70% of residents own bikes already. They can be a lot more than just recreational, and that is my interest as far peak oil goes, but the design of our built environment currently is made hostile to ride a bike for other tasks on city streets when competing with space with much faster and more dangerous cars.
So as far as legislative action, yes I would like to see bike-way design on streets so long as there are still cars running that present a hazard and discouragement to riding a bike. A lot can be accomplished in shifting mode share from short trip driving to biking with little resources, as has been demonstrated where ever their has been the local political will to make bicycling a priority in the design of streets.
No tax breaks are necessary for bike sales, but a shift away from billions of subsidies for every aspect of driving would be a logical step. The subsidization that goes into parking garages alone is staggering, and many local US governments by force of law require private development to be oriented around cars and car parking. There is little to do with some imagined free market about the way America has built out, and in some cases essentially paper barriers exist to non-automotive oriented development.
Copenhagen is renowned for it's high quality citywide bike lane and path network and exponentially high mode share of bikes for the developed world, and the cost to implement all of it is a fraction of what is being spent to add 10 miles of carpool lane to the 405 in Los Angeles at a cost of over a billion dollars. Even a modest shifting in funding priority could facilitate a disproportionate shift in mode share away from cars. Portland compared dollars invested split by active transportation, defined as biking and walking, compared with it's transit and roadway capacity improvements, and found by the far biggest increases in commuter travel per dollar spent was in bicycling and walking.
http://blog.bikeleague.org/blog/2011/02/the-cost-effectiveness-of-active...
The federal government is pretty worthless at this point and I expect any progress on these fronts would come from the local level. My own regular involvement with my city government and organizing others has played a part in contributing to stronger support for alternatives to driving and direct government actions toward those ends within the municipality of 90,000 that I live in within the Los Angeles region.
"If it gets so bad that we all need bikes, it's too bloody late."
Too late for what? For preserving mass motoring everywhere all the time? I know it's not a common sentiment yet, but the absolute dominance of cars over the streetscape of American life is one of the most unattractive aspects of America to me. I'm sick of writing about fatal hit and runs and other mayhem from our largely unchecked car frenzy.
The other implicit assumption in saying "we all need bikes", which I did not say, is again this all or nothing thinking. All or nothing is rarely how the world works or how people respond to it, there are often messy middles. More people are using bikes for transportation, and I think it would be a good idea to make the modest societal investments necessary to grow this trend away from driving toward a far less energy intensive way to get around. Ultimately walkability is most important, but we already inhabited the land beyond walkable scales across widespread regions, and I think our existing fleet of bikes can play a role in mitigating some of those shortcomings in age where more become priced out of drive, but this is far from making things easy, idyllic or a utopia.
I don't disagree that competition for jobs will be demanding and difficult, but not everyone lives nearest the greatest opportunities and there will always be a demand to travel distances for one reason or another. A bike extends the radius by which you can seek opportunity compared to walking, and public transit may bog down from our years of lacking in investment in it just as more people seek to use it.
One of the greatest films about bicycling ever made was the neorealist film The Bicycle Thief , set and filmed in post war depressed Italy. The protagonist has a bike that enables him to find work further from home to support his son while avoiding the incredibly long lines for overcrowded buses. When his bike gets stolen he is thrown into a tail spin and does everything he can in a search to track down the thief. In the end, he breaks down in desperation and steals someone else's bike for himself, which his son witnesses, and the father is caught in a moment of absolute shame and hypocrisy.
There is nothing utopiac about this vision, but if it says anything, it says how valuable it is to have a bike when fuel is short. I didn't say riding bikes would make life easy, I'm saying they are means to preserve mobility despite diminishing fuel availability. How quickly things might become that desperate I don't know, but bikes will matter I'm fairly certain.
Those who can most easily make such a switch in their transportation will do so first, and in doing so demand drops out, softening and extending the blow of energy decline. Some recent demand destruction for oil is certainly being driven by unemployment and the economy, but some has been driven by people still employed but no longer filling up a gas take. I workside a number of folks in that category. I am not saying this sort of thing fixes everything by any means, but it's a factor worthy of consideration because it is already happening and has a potential to grow more substantially.
I also don't think the psychology of fun, should be ruled out entirely either despite the seriousness of our predicament. A lot of the people I talk to my age that took up bicycling or got rid of a car to bike as a primary transport mode, got into it initially because it was fun. The concept of joy riding a car that featured so heavily in life for prior generations of young adults in America is a mostly foreign concept to young adults today. Driving sucks and many people growing up today want to do as little of it as they can get away with, not more of it. They were smothered to death with driving being driven everywhere by their boomer parents. Changing social trends can shape how events transpire just as geology and the economy.
And finally the simple to maintain technology inherent to bicycling has applications beyond transportation that can reduce the amount of labor to preform tasks without fossil fuel inputs. Bikes can be rigged up to produce small amounts of electricity, or kinetic motion applied to tasks like pumping water or spinning a knife sharpening wheel among other things. In my mind, having more people who bike, know how to fix them, build them and modify them are useful for a future of ever declining energy availability.
Gary, you began your posts in this thread by saying that while you often read TOD, you rarely look into the comments, let alone contribute to them. I hope this thread marks a change in that regard, as your comments here have been eminently valuable and insightful, and make good reading, along with the contributions of others such as orbit7er, Michael Dawson, etc. I have no doubt you are making a positive impact in your area of Los Angeles, and am glad to know it.
I'm glad you appreciated my comments. I may try to participate more, but I largely spend my free time these days writing for LA Streetsblog for a more general non-peak oil aware audience on local transportation topics and politics, which is well read by local alternative transportation advocates and professional planners in the LA area.
I'm also beginning to work on a small independent "zine" publication for sale and distribution in the US bicycling community to further articulate my own ideas about bicycling in a scenario of ongoing energy decline and strategies for facilitating a more rapid mode share switch in the United States to try to be ahead of the curve of that decline and mitigate and soften the speed of the blow. If it does well, my hope is to maybe flesh it out into a full book. I discovered peak oil concerns through becoming a bicycling advocate and blogger since about 2007, and then later inquiring further about transportation energy policy and economics which took my research into the world of oil and more recently reading peak oil authors and literature in the past year and a half or so.
It's become my view that people writing about peak oil haven't given bikes a serious enough look. I also feel the growing bike movement is enthusiastic, and loosely gets that the extent of our oil dependency represents a serious problem and liability, but I find that most bike advocates don't fully grasp just how deeply troubled automobile centric life will become very soon due to peak oil, and the urgency of our time. I would like these two communities of thought to have more overlap. Some exists, I encounter it here and there, but I think there is a wide opening for more cross pollination.
Personally I would love to see a prominent peak oil writer like Richard Hienberg speaking at one of the big bike conferences. I think the bike community is an audience ready to grapple with that kind of message and would be fired up by the urgency, and some would even relish the thought it may become more imperative to dump cars than they already felt. Many who become daily bicyclists come to view cars more as threatening monsters than a symbol of liberation. I remember back in 2008 when I was first getting deep into the bicycling community, and largely unaware of oil issues, how many people I know including myself at the time were genuinely excited to see gasoline shoot up to $5 in some parts of California, putting the squeeze on driving, but largely unfazing those of us who had ditched driving for most trips.
Most of the mainstream media may not be willing to touch the peak oil debate with a ten foot pole (or only present one side if they do). However there is a modest but growing little "bikestream" media if you will, run by of enthusiastic bicyclists around the world, spreading their messages via blogs, social media, podcasts and indie publications distributed in bike shops and co-ops, that I feel may be more receptive.
Well, count me as another one who appreciates Gary's comments. To my mind, he is looking at things in a fairly sensible manner, while his critics aren't. One indication of the illogicality is the comment of Bandits:
As Gary says repeatedly, there is a huge number of bicycles presently sitting under-utilised in garages across the US. If people can't afford to drive and there is no public transport service, why should they leave the bike at home and walk?
At bottom, what is at work is conservatism, the inability to conceive of any workable arrangements except those that currently exist. If currrent arrangements are shown to be unsustainable, therefore, the conservative response is either to:
(a) Go into denial and retreat into retreat into fantasy, heaping vituperation on science and the scientific method (witness the current mainstream US political scene); or
(b) Conclude that catastrophe is coming and make one's plans on that basis.
Few regular readers of TOD would fall into Category (a), but quite a few fall into Category (b). I don't subscribe to either, since I believe that a power-down transition is entirely feasible and will be accomplished with varying levels of pain, depending on the country involved. The country which will have the hardest time is actually the United States, because of the extremely high level of oil consumption embedded in society by the structure of the economy, the design of most cities and the sheer power of the dominant ideology at present. Europe is far more sustainable and is moving further in that direction. As Gary points out, though, even in the belly of the beast there is a strong movement away from the car and towards more sustainable lifestyles. Peak Oil is a looming reality, but the only thing that is "doomed" is The American Way of Life.
Finally, a word on statistics. Some in the doomer camp treat the shift to more sustainable energy systems and the transport mode shift to public transport and cycling as being of a derisory amount. The idea is that, although these shifts are showing a very high percentage, they are coming off a very low base and are making no practical difference to oil dependence. This is a fundamental mistake. The people saying this are disregarding a point that is often made, in other circumstances, by doomers themselves. This is that one of the flaws in the workings of the human mind is the inability to grasp intuitively an exponential function. The early years of a shift towards renewable energy and away from cars towards bicycles don't make a large difference to the amount of fossil fuels burnt or cars on the road, but they matter. A few years further down the track, the power of exponential growth will manifest itself as an incredibly rapid shift from an unsustainable system to a sustainable one. Detroit won't see it coming, but I am hoping that a lot of readers on TOD will, and will help it along.
Thanks for a whole heap of sanity.
You don't have to be a "cornucopian" to recognise that essential services don't have to stop working even if/when a majority of the driving public find liquid fuel prohibitively expensive to maintain the lifestyle of driving to the corner shop and commuting an hour each way in single-occupancy cars.
Given today's steady expansion of non-conventional liquid fuel production and the many ways that oil-profligate communities can cut back on waste, I no longer fear that declining oil production will bring about complete financial and political collapse. And if peak oil were to *trigger* a collapse which is in some Marxian way "inherent in the system" due to its assumption that growth is always possible, that's also not something worth fearing; rather the toppling of the house of cards is something to look forward to so that we can build something on a more human scale.
If the financial system implodes then human, physical and intellectual capital will still exist. We will find better ways to allocate and maintain them.
If the financial system implodes everything from world trade to local trade collapses. Without credit and electronic financial transactions everything from trucking to shipping collapses.
But simplistic "Julian Simon" thinking continues to be the norm among those who cannot take the time to truly understand even a tiny fraction of how our complex world actually works. It is all explained here:
Trade-Off: Financial System Supply-Chain Cross-Contagion: a study in global systemic collapse
But this is a 74 page document and does not lend itself to silly simplistic interpretation. It takes at least a couple of hours effort to read and understand. But it is the best overview of what happens if growth stops and starts to decline I have ever come across.
Ron P.
Ron,
I would be interested in seeing your critique of the paper.
An issue the paper didn't address, but I think is relevant, is the bilateral trade agreements that many countries are putting in place. Presumably, these agreements are intended to bypass the European and US banking and clearing functions and allow direct transactions between central banks and member banks of the respective countries. As these agreements multiply, I would think they would act to mitigate some of the implications of a breakdown of the current financial system. Although, that may not help the developed world in the short run.
NC, I just finished the paper. I printed it out and read it because I hate trying to read very long documents on the computer. I must say it shook my up. I had expected a fast crash, like in the neighborhood of three or four years. But this guy is talking about ten days or so. And the way he laid it out, ten days seems like it is very plausible.
Banks are banks, they are all tied together. Letters of credit, if they become something that disappears in a banking crisis, will disappear for central banks as well as local banks.
But there is far more to a transaction than just an agreement between buyer and seller. There is shipping. Trucks, trains and ships on both sides are involved. In the event of a total collapse, any selling or bartering will likely be local not international.
Ron P.
Ron,
It's an interesting discussion, but it appears to involve a lot of speculation - I didn't see any really hard analysis.
They don't appear to be all that firmly grounded in reality. For instance, their discussion of automotive supply chains on page 5:
"Consider that a modern auto manufacturer has been estimated to put together 15,000individual parts, from many hundreds of screw types to many tens of micro-processors.Imagine if each of their suppliers put together 1,500 parts in the manufacture of their inputto the company (assuming they are less complex), and each of the suppliers to those inputsput together a further 1,500. That makes a total of nearly 34 billion supply-chaininteractions (15,000 x 1,500 x 1,500), five times the number of people on the planet. This isa highly imperfect example but it signals the vast conditionality upon which modernproduction depends."
If I understand this correctly, they've gotten to 34B "supply chain interactions", where there are really only about 15,000 (many of which are mighty simple: one tier 2 supplier might use 20 different fasteners (screws, etc), but they'll probably order them from one supplier).
I didn't see any discussion of the negative feedbacks which tighter integration/communication create: a major reason for financial instability as manifested in the "business cycle" is inventory growth and reduction, which amplifies the variation of spending on manufactured goods. Tighter and shorter response times, as created by Just In Time supply chains, reduce the swings in production.
Similarly, better communication and planning about resources helps reduce the capital expenditure Bust and Boom cycle of commodity markets. For instance, one could interpret the 2008 spike in oil prices as financial markets helping pull information about PO much earlier in time, reducing overshoot.
I don't see much new in the speed or comprehensiveness of communications. Ever since the telegraph was invented, the whole world has been connected with instant communication, and fear psychology could be transmitted very, very quickly and involve "everyone". For instance, the Long Depression of 1870-1890 involved both the New World and Europe.
What would you say the authors' novel contribution is? Are there pages you would highlight?
The auto parts thing was just an example to show that thousands of suppliers are required to build just one car. That was the point. But you can nitpick his numbers all you wish but you haven't done anything to disprove his point, which was: It takes many thousands of supplies to supply the parts ... and to supply the supplier of those parts.
I really don't see your point however. Are you saying that there will be no crash as the oil supply starts to decline? Are you saying that our debt based economy can survive a continual decline in World Domestic Product? Or are you saying instead that a continual decline in the oil supply will have little or no affect on WDP?
If it is your intention to disprove his thesis then it would behoove you to supply one of your own, or at least give us a general idea of what you expect.
Edit: I was typing while you were editing. I will supply the pages I highlighted in another post.
Ron P.
The auto parts thing was just an example to show that thousands of suppliers are required to build just one car. That was the point.
And my point is that this example is wildly unrealistic. They were talking about billions, and the real number of interactions is probably in the hundreds.
It looks like much of this "study" is anecdotal - if they can't get the anecdotes right, then their conclusions won't be realistic...
are you saying that there will be no crash as the oil supply starts to decline?
Yes - I think that a "crash" is very unlikely (depending on your defintion, of course). Stagnation is very possible. Somewhat slower growth than otherwise - very likely. Stagnation or slow growth would be temporary, though it's worth noting that I think demand for hard goods has largely plateaued in the OECD, so growth would slow down in any case.
Are you saying that our debt based economy can survive a continual decline in World Domestic Product?
Yes, I think so. I think such a decline is unlikely, but if it happened we'd survive, and our current economic institutions would still probably be recognizable.
Economic contraction would certainly mean a lot of conflict, as expectations are reduced, and things would get unpredictable.
What David Korowiez was saying that collapse in the next few years is very likely and he made his argument by stating exactly why he thinks it is likely. Here are a few things that I highlighted. Bold mine:
I am saving that last quote. I find it strange that most people seem to believe that every problem has a satisfactory solution.
A youtube version of this can be found at the below links. Each is a session of 10 to 20 minutes and the last two are a question and answer session.
http://www.youtube.com/watch?v=pmC1juUCygo
http://www.youtube.com/watch?v=vh8b-upQbDw
http://www.youtube.com/watch?v=ghWjQdj4dpQ&feature=relmfu
http://www.youtube.com/watch?feature=endscreen&NR=1&v=kWNnI8KfQgA
http://www.youtube.com/watch?NR=1&feature=endscreen&v=Yc5cVmAA2uw
http://www.youtube.com/watch?v=I7gNz89xdhI&feature=relmfu
http://www.youtube.com/watch?v=Mm8YVwid6KE&feature=relmfu
Ron P.
The likelihood, as with so many financial crises of the past, is that the breakdown of the global financial system will be sudden and catastrophic, marked by complacency and hope turning to fear and panic.
That's interesting. They acknowledge that financial crises are nothing new. hmmmm...
More grandiose plans, more targets or investment in breakthrough technology, more well-meaning chatter about a green New Deal mostly miss the point, firstly, because imagining is really not a substitute for reality, and secondly, because in all probability, it's too late...
Well, this is highly unrealistic. We have all the tech we need, right now. We have a modest liquid fuels scarcity. Unfortunately, we have all the FF we need for a long transition (I'm much more worried about climate change than PO).
This tells me that the authors' intuitions are badly off-target.
Bank-issued interest-bearing credit is the source of almost all money in the economy.
Central banks issue quite a bit, and they can issue pretty much as much as they want.
Because credit is charged at interest, credit expansion is required to service previously issued credit.
Where does this silly idea come from? Interest rates can go to zero, or they can stay at a small positive amount, just enough to pay for the costs of running the finance sector.
In order for the issued credit-money to retain its value relative to goods and services in the economy, GDP must increase commensurate with credit-money expansion.
???? I'm not sure if they're worried about deflation or inflation. Either way, they've got it backwards: money supply must follow GDP, not the other way around.
If the amount of affordable oil available to the global economy declines in real-time, and cannot be substituted in real-time, then economic contraction becomes inevitable.
Again, that's highly unrealistic. I suppose you can argue that the "cannot be substituted in real-time" qualifier improves it, but I'd say it simply makes it a tautology.
For example, US oil consumption dropped 19% from 1978-1982, while GDP grew (and the Fed "wrung inflation out of the system"). Heck, world GDP has grown by what, 25% since oil supplies plateaued in 2005?
There is no a priori reason that there should be a satisfactory solution to any problem that we face.
True. Fortunately, solutions to our energy problems are here already.
-----------------------------------------------------------------
So, we see that some of the authors' assumptions are highly unrealistic.
That's too bad, as good quality risk analysis of these topics is badly needed.
Greer seems now to be hedging his bets, posting more about a very fast collapse. Bold mine but are Greer's words:
The Archdruid Report - On the Far Side of Denial
And I agree 100 percent. The stair step decline was based on times long past when things were not so complex and interconnected. The US went into a depression very fast in 1932 and 1933. Things are even more complex and interconnected today. And as Greer says, it could come to a screeching halt in a matter of days or weeks.
Ron P.
But you left out anything from the second half of that post where Greer also goes on to say:
The US went into a depression quickly in the 30's, but as Greer pointed out in the same post, incredibly drastic measures were implemented to prevent further free-fall and maintain a level of stability. Something on par with the depression of the 30's is a possibility I've started to consider certainly possible not that far off within my lifespan, but life did not simply stop for those who lived in that era, people adapted as best they could.
On a smaller scale there is also every state government and local municipality as well, with their own command structures and resources. Some will continue to delay or respond poorly to the crisis facing us, but many may rapidly deploy drastic measures and pool resources to maintain as much stability as possible on a fast timeline if the need becomes great and immediate. A rapid collapse of of the globalized economy would produce enormous hardship and suffering, there is no understating that, and it is an incredibly alarming risk just now. However citizens, organizations and government systems will not simply keel over and do nothing about it should this occur.
Our civilization may have been terrible at planning ahead for the long term, but it has also shown itself capable of mobilizing quite rapidly during times of immediate crisis and need. By such a point it will have been far too late to facilitate any kind of ideal, easy or stable transition, but society will push back against the threat of a rapid population collapse. I consider the drawn out grind loosely articulated in The Long Decent and Ecotechnic Future a more plausible direction that things may go than some kind of mass ending with emerging bunker survivors in a short window of time.
Perhaps it may be somewhere in range between those two perspectives, but I think those expecting civilization to all go down soon and very quickly will find there's a lot more room for creative responses within the constraints of this mess than they accounted for.
I'm also not sure if we are talking about the same thing, a collapse of the financial system is not the same thing as civilization collapsing, though clearly a mortal blow to our globalized tertiary economy will be an enormous challenge that may involve a lot of messy arrangements to try and facilitate trade moving again on new terms. Some people may look at a wiped bank account and think life is over. I suspect most people will find ways to muddle through.
I'm young and in good physical health, so I've potentially got quite a few years remaining with or without an effective healthcare system. I'm not about to think it's all over just because the coming decades will be far more challenging than anything my parents went through and likely demand a total paradigm shift of cultural priorities. I'm interested in how we as a society make rational choices from this point forward to best prepare for this coming future while being fully aware where we are going won't look like where we've been in recent living memory and be a great deal more difficult.
And the very next paragraph. That makes me thing Greer is getting more and more pessimistic. Anyway I am in the process of reading the entire paper that started all this fuss, the paper that everyone in the peak oil world is currently recommending that all peak oilers read. In fact George Mobus says in his blog: Watching the Global Economic System
And what is this paper that has Greer, Mobus and almost everyone else in the peak oil world talking about/ Financial System Supply-Chain Cross-Contagion: a study in global systemic collapseby David Korowicz
And on page 10 of this 77 page PDF file we find this:
Anyway this is a fantastic paper. I hate reading long essays on the computer screen so I printed out every page of it and am now about half way through it. Can hardly put it down but I do take a break occasionally to read my email. But read this paper and you will not likely ever believe in a slow crash again.
Ron P.
This looks a good place to post this (from the MSM, no less):
Read more: http://www.seattlepi.com/news/article/Global-economy-in-worst-shape-sinc...
Ron, having read the paper, I found the factual portion to be very accurate as far as the description of the stresses in the financial system are concerned, actually it is a very good summary. What I found lacking is the analysis of the data. First off, the report goes both ways on oil in saying that even if oil doesn't cause a crash and even if oil demand falls because of a crash, oil will still be a problem. if oil demand falls from a slowing of the economy, this will mitigate the effects of peak oil for a number of years until the existing production declines below the new demand level and lack of investment prevents new supply from coming on line when it is needed. Classic commodity boom and bust cycle dynamic. As this plays out, it will take the heat off oil as the constraint on the world economy while the debt problems are dealt with or digested. So, in the near term crash scenario I don't see how oil will factor in to the extent the report suggests.
The bigger issue I found with the report is that it is very orientated to the western financial system and ignored the stress between the east and west. Debt within a closed system can be dealt with through default, printing, debt jubilee, etc. The issues become how the losses are distributed and what standard of living comes out the other end. If Spain goes the way of Argentina, its not the end of the world. The bigger potential issue, in my view, is that the developed world has farmed out a significant amount of manufacturing to the developing world and relies on the developing world for a large amount of natural resources. The developing world is getting tired of the western financial system running the show and is actively working on establishing bilateral trade systems outside the existing financial system. The US and EU stance on Iran is counter productive in this regard as it seems to be accelerating this process.
The problem I see has more to do with what happens when China, Russia, Brazil, various oil producers, etc. decide they are better off outside the established financial system. With ZIRP and potentially large portfolio losses, providing vendor financing to the west has to be looking less attractive. The financial and supply chain problems may have more to do with the rest of the world abandoning the Dollar and Euro than how the sovereign and bank losses are absorbed.
Non, I am not going to argue this thread further beyond this post. But I will say Spain is not Argentina and will not have the same effect on the world if they default, especially a Spanish or Greek default would not have the effect on Europe as did Argentina. There is no such thing as a closed system in Europe. And what affects Europe affects the world.
Please forgive my harsh language but that statement is total nonsense. Apparently you have never heard of the Forex. China can buy oil, or anything else from any country in the world using nothing but Yuan. The yuan can be exchanged, on the Forex, in a matter of milliseconds for either dollars or euros. It is all done automatically. They buy oil from Saudi Arabia, or whomever, and pay in Yuan. The yuan is converted into dollars, or whatever currency Saudi or whomever wishes, in a matter of milliseconds and not a ripple is felt on the world monetary exchanges anywhere in the world.
Though some countries try to peg their currency to the dollar they are only partially successful and all pegs slip from time to time. The peg slips and they peg it at a different level until it slips again. Basically all currencies float, even the Yuan. And though the dollar is used as a kind of benchmark for the price of oil, and many other commodities, countries can pay and/or receive payment in any currency because of the existence of the Forex, the Foreign Exchange Market.
The rest of the world cannot abandon the dollar or the euro because unless they are a European country that uses the Euro, or the United States, they never adapted the dollar or the euro in the first place. They have their own currency.
Ron P.
I understand what your saying although some of the pegs have been fairly stable for awhile. My point though is that currently the west controls the markets and the clearing functions and what lubricates the whole system is the debt that is sold by the developed countries. I don't see a trade crises necessarily originating from the banking system in terms of letters of credit and the like, banks can be backstopped by the central banks and have been for the last several years, but by the developing world getting to the point that taking on more western debt no longer services their interests.
Gail,
Is this a place to talk about liabilities verses debt?
One thing that strikes me is that most people (myself included often) make no distinction between the two. Many GDP vs Debt graphs either don't include liabilities or include them as debt.
If you characterize debt as legally enforceable and liabilities as just promises, then it strikes me that, as real debt continues to grow, it will be the liabilities that will get the harsh cuts first.
Now I understand that this can be just semantics but real experience shows some key differences. Pensions are liabilities and are not debts - as many here have realized when their pension underwriter went bust and left them with next-to-no income. I am sure many big oil and ex-car makers are sitting comfortably at the moment on the assumption that their (sometimes index-linked) benefits are 'guaranteed'. However there is nothing in practice supporting this.
Either way, Gail, I would be very keen to hear about what you think will get squeezed first by falling GDP. I hear people talk of US medicare/medicaid as the third-rail of US politics, but is this not just more liability, when it is debt that will need to be serviced first? Or is this a good way to find yourself, literally, swinging from lampposts?
If this is too off-topic please punt this into the drumbeat discussions.
It seems like there are several types of debt-like situations the government has gotten itself into:
1. Actual debt
2. Formal Federal insurance programs. The ones that come immediately to mind are the FDIC coverage of bank deposits to $250,000; the Pension Benefit Guaranty Corporation guarantee of pension benefits, up to varying limits; and the nuclear liability insurance provided (above certain limits) by the Price Anderson Act. I am sure that there are others as well. The amount of payments on these could be huge, if things go badly wrong.
3. Social Security - A mostly "pay as you go" program. This could theoretically voted out of existence (I suppose), but as a practical matter, as long as there are elections, and older people vote, it can't happen. Benefits could be cut, though. Or if a new government came into being, it might not choose to promise the same kinds of benefits.
4. Lower level federal programs. I would put into this Medicare, Federal Unemployment Insurance (but this is mostly a state program), Medicaid (to the extent there is federal funding), federal funding of state highway programs, and food stamps. It seems like these could be cut quite easily.
5. Voluntary bail-outs. There was no requirement that AIG be bailed out, or for that matter all of the banks that needed loans.
I don't know how things will work out. You are right about the voluntary things being the first to feel the squeeze--things like in my number 4. But there is so much potential for things to go badly wrong in the insurance part (my number 2.), that the government could find itself in need of printing huge amounts of money to cover what goes wrong. If things go badly enough wrong, governments have at times been thrown out-- whole new constitutions written, even break-up into smaller groupings (think Former Soviet Union or Former Czechoslovakia). So I don't really know what will happen.
"Social Security.... Benefits could be cut, though."
I a very real sense, they have been. 'Modifications' in how the CPI/inflation rates are calculated (energy and food excluded, etc.) are effectively stealth methods to limit benefit increases. Other 'tweaks' have also resulted in benefits not keeping pace with real inflation.
Martenson covers some of this pretty well in his Crash Course.
I agree. And funding now has been cut for Social Security so we are paying out more than is being collected in Social Security taxes. This is supposedly a temporary fix (that temporarily helps the economy), but it is hard to see when anyone is going to raise employer contributions back to their former level, much less raise them.
By the way, a decision was made recently to allow pensions to forgo the big increases in funding that normal calculations would require, if current low interest rates were considered. Employer are allowed to use longer averaging, "smooth things out".
I was keen to share this article with a friend - no share button here - that I can see - anyone??????
IIRC, SuperG (system admin) disabled the share functions a few days ago. It was acting up (very hair-triggered) and some folks complained. Suggest you send a link the old-fashioned way or contact: support at theoildrum dot com :-)
Ok thanks Ghung. I noticed a 'blinking' - then no go - once before when I tried to send another article few weeks ago. Will try old- fashioned way now. :)
It is unlikely that the oil exporters will reinvest the money in the economy of the buyer of its oil–they are just as likely to reinvest it in their own country.
If the oil exporting country gets new income, that has to be spent outside the country, or else it will just cause inflation (and no new consumption, as domestic industry doesn't have additional production to sell). They either have to spend it on imports, or lend it back to oil exporters.
Recycling of petrodollars as consumption eliminates oil-induced debt.
As government spending by oil exporters rises, and the oil price required for a balanced budget rises, so does petrodollar recycling.
If oil prices are currently at the breakeven point, oil importers aren't accumulating debt.
This is good news for oil exporters.
Maybe so, but populations in exporters such as Saudi Arabia and Russia would like more internal spending, and such spending is good for keeping down internal dissent.
I haven't looked at investments in sovereign wealth funds. It seems like the amount of such investments would be trending downward. My impression has been that not too much information is available on such funds (amounts, where invested, etc.). The US has been buying quite a bit of its own debt recently, so it would seem like that is not where the funds are investing now.
populations in exporters such as Saudi Arabia and Russia would like more internal spending
That's internal consumption, which will have to be supplied by imports. Those imports will come mostly from oil exporting countries.
the amount of such investments would be trending downward.
That's good. That means that oil importers are spending, instead of saving.
Much of heavy manufacturing has been moved out of the United States and the European Union.
Actually, this just isn't true, at least in absolute terms. The US manufactures 50% more now than it did in 1978. People are misled by the fact that US manufacturing employment has dropped substantially in that period. But, that was caused by sharply rising manufacturing labor productivity, rather than by a decline in absolute levels of manufacturing output. See nice charts at http://www.dailymarkets.com/economy/2010/10/03/increases-in-u-s-worker-p... .
Here's production data at http://www.census.gov/manufacturing/m3/index.html, including http://www.census.gov/manufacturing/m3/historical_data/index.html , especially Historic Timeseries - SIC (1958-2001), "Shipments" .
It would be very hard for US manufacturing to grow faster than labor productivity, which tends to grow 3-5% per year. So, the best we can hope for is flat employment levels. That, of course, would be a relief for US workers in manufacturing.
Page 7 of the USGS steel report below says that in 2000 US raw steel production was 102M tons. In 2008 it was 91.9M. Thats 90% of 2000 production. In 2000 US imports were 34.4M. In 2008 they were 14.7M, or less than 50% as large. Net steel imports dropped by 63% from 1978 to 2009:
Imports Exports Net-imports
1978 20M 2.97M = 17M
2009 14.7M 8.42M = 6.3M
Clearly off-shoring of US steel production is not the cause of declining US energy intensity.
http://minerals.usgs.gov/ds/2005/140/ironsteel.pdf
It may be hard to buy clothes or shoes or toys or electronic equipment made in the US, but Boeing, Caterpillar, GM and Toyota still make a lot of stuff in the US, much of it exported.
The question at hand is energy intensity of GDP (EIOG): the ratio of oil to GDP. Some argue that the US and Germany can pretend to decrease their EIOG because they've actually pushed off their really energy intense industries to China.
The answer is to look at the whole world's EIOG -that eliminates boundary problems, like outsourcing. World EIOG has been falling steadily. That makes it clear that EIOG really can decrease, and very sharply, too.
Here's a nice chart for the world:
http://1.bp.blogspot.com/-JEZXR9XK7vc/Tbr46ReInRI/AAAAAAAAPQ0/HlLXeVin_g...
That's not surprising. Any manufacturing engineer will tell you that manufacturing doesn't use that much oil. The big kahuna is really ground transportation. That can move from truck to rail (reducing energy intensity by about 70%), and from diesel rail to electric rail (eliminating oil entirely).
> The answer is to look at the whole world's EIOG ... Here's a nice chart for the world
That chart shows manufacturing's share of world GDP. That's interesting, but it's not the energy intensity of GDP.
Well, we know that world GDP has grown much faster than world oil consumption, right?
I meant the chart to tell us something related, though different: that the trends for the world and the US are similar for manufacturing's share of GDP.
Energy intensity of GDP is available of course, declining for years:
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strai...
Thanks!
Energy intensity of GDP is not going the same direction recently for the world as a whole.
See my posts:Is it really possible to decouple GDP growth from energy growth?
Thoughts on why energy use and CO2 emissions are rising as fast as GDP
The Growing Part of the World in Charts
The first two of those post are also on TOD. The last one is only on OFW.
Well, China's coal consumption is certainly growing fast.
On the other hand, the Original Post is about oil and it's effect on GDP, and it's clear the "oil intensity of GDP" is continuing to fall, especially for the OECD.
One question at hand: is outsourcing of OECD manufacturing a significant contributor to reduced OECD oil consumption? It looks like the answer is no.
Outsourcing US manufacturing has both direct and indirect effects. There is the energy related to the widgets that we import.
There is also the effect of paying the workers wages, and needing to build up roads and schools to support these factories. Workers see the new widgets and want them too. This ramps up their economies greatly, quickly.
China and other less developed nations had all kinds of minerals that hadn't yet been exploited (including coal), and this helped ramp up the effect as well, because their costs were so much lower than in the US. Because China (and much of the rest of Asia that has ramped up manufacturing) is a warm area, workers could live much more cheaply than in the US (flimsy houses, bike or walk to work, no heat or AC) so could compete well with the US.
Gail,
You're not addressing my main point.
Almost all of the Chinese economy is related to Chinese domestic investment and consumption. Chinese net exports as a percentage of their economy isn't that large.
US domestic manufacturing output has not declined. The outsourcing of US manufacturing is greatly exaggerated.
Sorry Nick, you need to check your facts.
http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS
From what I can see, Chinese exports account for nearly a third of their economy. It has been dropping dramatically since 2008 when it was 38%, but it's still 29%.
You have to look at NET exports (exports-imports). A large part of what China exports is made from stuff it imports. The net number is much smaller than one would think reading the popular media.
Rgds
WeekendPeak
Energy intensity of GDP is not going the same direction recently for the world as a whole.
???
World Bank data shows that globally the energy intensity of GDP is falling as well.
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strai...
> The big kahuna is really ground transportation.
Uh no, not if you mean goods transport. I was reading an IEA report yesterday. From memory, transport currently uses about 54% of oil. Of that, 40% is light passenger vehicles, 22% each aviation and road freight (with the balance being rail and ships, I guess).
Probably no more than half of road freight transport can shift to rail because the remainder is the "last mile" between freight hub and final destination.
The big kahuna is LPVs. The IEA report expected 3% growth in numbers, constant miles per year, and 1.25% per year increase in fleet efficiency. And here's the kicker: transport's share of oil demand is expected to increase to 62% by 2030.
If the IEA is right about the last trend, and LPV numbers grow more slowly than expected (due to changing tastes), mileage drops (due to better dispatch and utilisation - trip combining, internet shopping), and the efficiency improvement rate increases above 2% per year, oil demand will decrease. Without need for EVs of any sort. Those three things do seem to be happening.
> The big kahuna is really ground transportation. - Uh no, not if you mean goods transport.
You're right - I erred because I was being too terse.
I should have said:
"The big kahuna is really ground transportation (passenger and freight). That can move from light vehicle ICE to HEV/PHEV/EREV/EV; truck to rail (reducing energy intensity by about 70%); and from diesel rail to electric rail combined with local electric trucks (eliminating oil entirely from freight movement)."
Probably no more than half of road freight transport can shift to rail because the remainder is the "last mile" between freight hub and final destination.
If we really wanted to we could go back to local spurs for that last mile. Still, I think Extended Range EV trucks make much more sense.
The big kahuna is LPVs.
Propane?
transport's share of oil demand is expected to increase to 62% by 2030.
uhhmmm....we don't really put much stock in EIA/IEA forecasts, do we??
oil demand will decrease. Without need for EVs of any sort. Those three things do seem to be happening.
Uhhmm, sure. I'm sure a lot of things will happen. I think the dominant vehicle reasonably soon, and for a long time, will be hybrids and PHEVs (including EREVs like the Volt).
Steel isn't the only energy intensive product. What of cement, nitrogen fertilizer and aluminum?
Three points. One, the nice chart shows that current US manufacturing is well below the 1974 - 2000 trend. The US is manufacturing less than it should be.
Two, the manufacturing that has been retained is the high-value-added manufacturing such as aircraft. A lot of low-value-add manufacturing (fertilizer, shoes, shirts, toys) has gone. So the trend in value masks the trend in volume.
Three, the US's famous underinvestment in infrastructure replacement has helped reduce the production of cement and steel below what would otherwise be expected. If and when the US starts a catch-up program, its energy intensity of GDP will increase.
Real gains have been made in efficiency of electricity generation with the regulation-forced switch from coal-fired peakers to gas turbines. Commerce, households and, yes, industry continue to make gains in HVAC and lighting efficiency.
Steel isn't the only energy intensive product. What of cement, nitrogen fertilizer and aluminum?
I really meant to talk about oil - those items don't primarily use oil.
The US is manufacturing less than it should be.
Yes, China has taken some manufacturing growth that might have happened in the US otherwise. OTOH, US manufacturing should grow rather more slowly than overall GDP). And, a plateau isn't the same as the dramatic decline in production that so many people assume has happened.
A lot of low-value-add manufacturing (fertilizer, shoes, shirts, toys) has gone. So the trend in value masks the trend in volume.
Is there any reason to believe that US manufacturing, like airplanes, automobiles, food processing (Wheaties...) and refining, use less oil to manufacture?
the US's famous underinvestment in infrastructure replacement
I suspect that's also an urban legend, promoted by the construction industry. Seen quantitative comparative evidence?
Real gains have been made in efficiency
True.
It would be very hard for US manufacturing to grow faster than labor productivity, which tends to grow 3-5% per year. So, the best we can hope for is flat employment levels.
That might be true if growth were only possible by building, say, 100 typewriters instead of 10. Growth is also possible by building a dedicated word processor instead of the typewriter, and then a computer instead of a word processor.
Growth is also possible by building a dedicated word processor instead of the typewriter
That may increase the value of the manufacturing output, but will it increase the labor needed to manufacture it?
In fact, we've seen precisely this transition, and we've seen labor inputs fall sharply.
I really can't imagine how manufacturing employment is going to grow significantly.
Gail,
While I admire your work, on this occasion I believe that the statistics do not warrant the conclusions. The statistics that you drew up the graphs from have GDP growth and oil growth between recessions, leaving out the years '73-75, '79-83, '90-93. To be consistent you needed to exclude the period of '07-09 and start the latest growth for comparison from '09. Obviously we don't have enough data yet for this latest period.
On a different note. I agree with Todd and his comments, that have been moderated out of existence, because they were a little over the top. As a producer of food, all this electrical green bike future is nonsense. Without oil the cities will starve, period.
Thoughts that farmers and heavy transport can run on oil and biofuels while everyone else uses bikes and green transit, is thinking of a utopian world, one in which we do not live. You would need a totalitarian government, with severe penalties for non compliance. More likely what we are to see as oil becomes more scarce and economies collapse is farmers producing less food for general markets, while consuming more of their own products, becoming more self sufficient as costs of everything goes up.
Countries that have introduced austerity packages usually seem to include higher consumption taxes, farmers will get around this by bartering food for other goods and services in the local community.
Gail,
thanks for your valuable article. It clearly shows the strong *correlation* between GDP and oil consumption (as well as the small demand elasticity so far). However, as already has been mentioned here, this correlation does not necessarily imply the *causality* you state in the headline:
"Oil Limits are Leading to Limits to GDP Growth".This correlation could as well be due to the inverse causality:
"Limits to GDP Growth are Leading to Oil Limits"The latter conclusion is also logical, because we know that less oil is consumed when the purchase power declines. And this is the conclusion that e.g. the IEA draws when it talks about "peak demand".
Although I do believe that rising oil prices do affect GDP you have to add more information if you want to prove what sort of causation is behind this correlation. Let's see what we can find.
Not to mention the fact the correlation isn't even that good, and the periods of the data a little cherry picked.
Don't agree with you this time either, Crobar. An r > .7 must be significant at .1% . That without the usual suspects like correlation by outlier and non-linear transformation. Looks damned interesting to me.
Yeah, maybe more analysis of time interval would be nice for a scholarly paper, but this ain't a scholarly paper, and this is still better than the average peer reviewed.
Thanks Gail.
I tried to give a little information on the reasons for the causality. The article was getting very long as it was, and it wasn't possible to address the issue as completely as it might be addressed.
This is an interesting and informative article, but it's conclusions fail in three ways. To begin, she confounds "oil supply" - what can be produced - with "oil production" - what is actually produced. The latter has dipped with the global recession. Interpolating growth rates across that dip necessarily leads to erroneous results. For examples, see the "averages" taken for world GDP and world oil "supply" made across the sharp downward spikes of the 2008-2011 period in Figs. 9 and 10.
Secondly, the study is not robust. It's conclusions clearly rely on the author-chosen end-points of the periods of extrapolation. A good example here is Figure 1. Had she chosen the entire 1993-2011 period instead of breaking it into two segments, the GDP growth figure for the larger period would have been only very slightly smaller than the 3.1% cited for 1993-2007.
Finally, she has chosen to ignore the important technological paradigm shift of the massive hydraulic fracturing of horizontal wells with very long horizontal segments. It is, after all, the most important element in today's hydrocarbon supply picture. As that shift will move out of the U.S. to both Europe and "Other", this is a fatal flaw. In the end she demonstrates only that which we already knew: oil price and GDP growth are strongly tied.
hydraulic fracturing of horizontal wells with very long horizontal segments. It is, after all, the most important element in today's hydrocarbon supply picture.
Are you thinking primarily of oil or gas?
As best as you can answer, given the fuzzy lines between the two...
TEC, Gail is not confusing anything, oil supply is always what is produced, not what can be produced. If it isn't produced then it is not part of the oil supply. One doesn't need to be a genius to figure that out.
Secondly: You're nitpicking.
Total absolute nonsense. The Bakken is producing about half a million barrels per day and Eagle Ford considerably less than that. Together they produce less than 1 percent of the total world oil production. The world's producing oil fields are declining by from four to six million barrels per day per year and that much must be replaced each year by new oil just to stay even. And that TEC, is the most important element in today's hydrocarbon supply picture.
Ron P.
The Bakken is producing about half a million barrels per day
I don't think it pedantic to say Bakken production is actually over 600 thousand bbls per day, and rising at the rate of 21 thousand bbls per day per month.
And that means... It is, after all, the most important element in today's hydrocarbon supply picture.
Now that is pedantic, and more than a little bit silly.
Ron P.
Relax, Ron. TEC is clearly still in the bargaining stage ;-) Maybe he'll get around to doing the BIG math,, or not. Until these folks realize that Eagle Ford, Bakken, etc. represent the bottom of the barrel, they're basically clueless.
7 billion humans + increasing consumption / finite resources = .....
About 23% of all crude oil ever consumed globally was consumed in just the 10 year period ending in 2011. The emerging conventional wisdom is not that this rate of consumption in our finite fossil fuel resource base was too high; on the contrary, the emerging conventional wisdom is that this rate of consumption was too low.
TEC - I know it may sound like I'm joining the "Pick on TEC" crowd but I do have to express a difference of opinion with you on a technical matter: "the important technological paradigm shift of the massive hydraulic fracturing of horizontal wells with very long horizontal segments.". There has been a significant shift not in tech but oil prices. I did my first massive frac in a shale (Edwards formation) in Texas over 30 years ago. I drilled and frac'd my first Eagle Ford well over 25 years ago. The oil patch has been drilling and frac'ng long horizontals for more than 20 years...many hundreds of Austin Chalk wells in Texas alone. In the Persian Gulf Maersk has been drilling 30,000'+ hz wells for some time.
These methods are constantly being tweaked but no major improvements since at least the late 9o's. So why the big push now? The shift hasn't been tech driven but price driven. I could have drilled and frac'd all the 5,000' hz laterals in the Eagle Ford I wanted in the late 90's...if oil prices had been high enough. These plays are driven by high oil prices just as the dry gas shale plays were driven by high prices...until those prices collapsed. The expansion of the oily shales globally will be determined by prices and not technology IMHO. In that respect some of the more optimistic projections for production increases could occur IMHO. But due to high enough oil prices to justify those efforts and not some new "magic tech bullet". Just as with the East Texas Haynesville Shale play the rig count will move in tandem with prices. Accurately predict future prices and you'll have an approximate handle on future production rates IMHO. Which is pretty much how that oil patch has progressed since its beginning be it in the conventional and unconventional plays.
"TEC Strikes Back" or, "Darwin Meets a Predator Higher Up the Food Chain"
Sorry Chas, but "supply" at the very least includes oil in storage (in tank farms, afloat on crude carriers, etc.), which is several million barrels at any given time. Particularly when the author is making a comment regarding the relationship of the potential scarcity - hence price - of a commodity and GDP growth, it's production capability, not actual production that is of interest. Averaging across a production dip caused by a collapse on the demand side, then using the value in a rate-of-growth regression computation is poor numerical analysis at best, intentional dissembling at worst. Defending such fatuous math is simply dimwitted, Mr. D.
As for the "Big Math", while it is only about 1% of global crude production, the Bakken and other oil shale production represent the first increase in U.S. domestic production after 20+ years of decline. While we are unlikely to "drill our way to energy independence", whatever that phrase means, a million BOPD is significant. The difference between a world oversupplied by 1 MMBOPD and one undersupplied by the same amount is the difference between moderate oil prices and global resource war. A million we CAN do. Adding to that the potential to back out crude oil demand via gas-to-liquids technology and the conversion of some transportation to natural gas, the above mentioned technology is obviously the most important new element of the energy supply picture (if you think not, please cite one MORE important). That is especially true when combined with the economic stimulus of low NG/electricity prices and the positive effect on the environment of displacing coal-fired generation.
Clearly, what is lacking in your vast understanding of matters energetic is some knowledge of price behavior in commodities due to changes in supply at the margin. There the Bakken et al are having a significant impact on the U.S. supply picture, hence on the price of crude oil. As the technology is exported, it will have a similar impact on global energy supply.
Now that we've all satisfied our desire to dis those with whom we disagree via ad hominem attacks, let's return to the subject at hand. There is a word to describe the article above: WEAK. I'm surprised that so many Oil Drum contributors lack the critical thinking which makes that fact obvious. Not to mention lack the math.
, the above mentioned technology is obviously the most important new element of the energy supply picture (if you think not, please cite one MORE important).
Depends on what you mean by "new". I'd emphasize wind, solar and EVs.
As the technology is exported, it will have a similar impact on global energy supply.
I'd love to see good info on that.