Thursday Open Thread
Posted by Prof. Goose on March 23, 2006 - 3:50am
Update [2006-3-23 12:38:58 by Prof. Goose]:Also, former Saudi oil minister Zaki Yamani said today in this little bombshell that "Oil prices will remain high "for some time" until major consuming countries reduce their dependence on oil..."
Related articles:
http://www.financialsense.com/fsu/editorials/willie/2006/0302.html
http://en.rian.ru/world/20060320/44575239.html
hat tip: FTW
Also here is a link to Tom Friedman's latest "A New Grip on (Energy) 'Reality'". There seems to be a split emerging among conservatives on the issue of America's energy dependence...interesting. (This article is behind the timesselect pay wall.)
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The latest newsletter of one of my clients said they were selling old ships and build new ones on heavy fuel literarely because the world was running out of light sweet and that fuel prices therefor will continue to rise.
There is by the way, as with oilworkers, a surging demand for engineers with the skills to run these more complex machines.
http://www.walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=349
This would be a miracle if they could pull this off. I would like nothing better than to see big truck get at least 10 mpg's on the road.. I drive over-the-road and know how much fuel truck take each year to run.
I also see they have a statement from the Rocky Mountain Institute and are looking out to 2020..
Why are we keeping a fleet of vehicles and the concomitant roadway system in the mix?
That seems pretty stupid.
Why not take the oil we do have, at this relatively cheap price, and revive the rail system? Revive the streetcar system?
The amount of fuel saved over the lifetime of a railroad would be exponentially greater than the fuel saved by more marginally more efficient trucks.
Urban Rail of all types, subway/rapid rail, light rail, commuter rail and streetcars all offer 100 to 1 energy savings as well as a better "fuel" than our cars.
My article (once again)
http://www.lightrailnow.org/features/f_lrt_2005-02.htm
Asphalt and bunker fuels are not that close to peak yet. Light sweet down, down, heavy production up.
Also, if one ranks transport by energy efficiency, the following ranking is close to correct (with caveats).
- Pipeline
- Water (ocean & barge)
- Rail
- Rubber tires
- Air
Trucking a container 1,000 km (or miles) takes more oil, and higher value oil, than shipping that container 10,000 km (or miles) by ship.Asian cargos bound for US East Coast would use less energy to go to NEw Orleans, then barge up Mississippi River system and rail to final destination than going to LA and turck/rail from there. Of course, factors other than energy use factor into shipping decisions.
Typically motor ships (as opposed to steam ships) use diesel when entering and leaving port, and switch over to heavy fuel oil once on passage.
Another good example of this one is trucking vs. rails. High gas prices have already caused this one to some degree in US. Just look how stock price of Norfolk Southern has moved during last two years.
Wal-Mart's whole business model is built on cheap energy. Distribution centers that are far from ports and stores, stores that are far from population centers. Cavernous big boxes that take tremendeous amounts of energy to heat and cool. Just-in-time delivery/"rolling warehouses."
Morover, their customer base is low-income. The people who feel high fuel prices first. Every dollar they put in their tanks is a dollar they can't spend at Wal-Mart. Already, some people are not going to Wal-Mart any more, because the cost of the gas to get there would eat up any money they might save shopping there.
I think people are buying in bulk at Sam's, and Costco, to stretch their dollars because everything is a lot cheaper than at the Giant or Weis stores, or at those little superettes you find in small towns. Maybe they're sacrificing the convenience of local shopping for price, but they would still drive to the local places anyway.
Also, you see Amish, Mennonites, and other country folk that are obviously making their weekly, or biweekly shopping trek. They might as well go to a cheap, big-box store.
You may pass a Wal-Mart on your way to work, but your situation is probably not typical. I live in a suburban area, and I would have to go to the next town to shop at Wal-Mart. My parents live in a once-rural area that is fast becoming sprawl. They shop at Wal-Mart regularly, and drive quite a ways to do it. There's one in their town, but it's in an "industrial area," outside of town, past the garbage dump, far from any housing developments. They don't really have to worry about fuel prices, though, so they keep driving their SUV to Wal-Mart.
Not so for others:
USA Today
I'm just sitting here trying to think of what sort of store is going to adapt well to rising energy prices. I think the home building chains will sell lots of caulking, insulation and wood stoves, but I can't think of anyone else that won't be hurt as much as Wal-Mart.
Unless you're selling something local, that you make with local raw materials and local labor, you'll have to deal with higher transport costs, right?
I can't; I'm not a business expert. But Fortune magazine had an article last year that explicitly tied high energy costs to Wal-Mart's doldrums. Because their distribution system is built on cheap energy, and their customers are lower-income than most. (Unfortunately, Fortune doesn't leave its articles on the Web for long, and it's gone now.)
Target has done very well. Their strategy? Aim for richer customers than Wal-Mart traditionally has. Wal-Mart is now trying to emulate that strategy.
Yes, but there are more efficient ways of dealing with it than Wal-Mart uses. Wal-Mart is exquisitely adapted for a world in which energy is cheap. That's one reason they were such a juggernaut for so long. But now the world is changing, and what was once Wal-Mart's strength is now a weakness.
If you're really interested in the differences between companies prepared to operate in a "carbon-constrained world" vs. ones that are not, check out this site:
http://www.ceres.org/
They are more concerned with global warming than peak oil, but good info nonetheless.
I do not know if you are familiar with the concept of a Giffen good. The idea behind the concept is that as incomes fall, people consume more of the cheapest goods--even as the cheapest goods increase rapidly in price.
For a possible example (The factual historical details are in dispute.) consider potatoes after the Great Potato Famine in Ireland. Potatoes went up a in price after the blight, but people changed their diet to eat more potatoes because that was still the cheapest food, and they cut down on luxuries such as bread or oats or fish or beer.
By analogy, my observation has been that some middle-class Target customers are shifting to Wal-Mart to take advantage of lower prices. Also, Target has had some bombs in their Cherokee line of clothing (which are now dumped at Goodwill and sold as if they are used items, which they are not), while Wal-Mart has an extremely astute marketing department that sells what people will buy--and nothing else. To some extent, I think Target has gotten fat, dumb and happy, while Wal-Mart is still lean and exceptionally mean and hungry.
Please accept my apologies for mispelling your name frequently. Is it from "Lea Nancy"? The problem is that I know well a couple of women named Leann (or Leanne), and I've been misreading your name consistently.
Anyway, thank you for the great quantity and excellent quality of your posts--something to look forward to each morning!
Soon we will all be foraging in the most low cost bix box stores of all, the garbage dump.
Weeeee. What fun it is to be American and stupid.
Nordstrom's might get away with selling to the rich, but Target sells to the middle class, and IMO the American middle class is an endangered species.
Wal-Mart is at $48 dollars today, near its five-year low. Target is near a five-year high.
I think the very things that gave them an advantage a few years ago are biting them now, and it will only get worse.
For example, just-in-time delivery. They keep only a three-day supply of their most popular items, depending on "rolling warehouses" (frequent, carefully-timed truck deliveries). That makes sense in a cheap-gas world. Why pay more for on-site warehousing when you can have daily deliveries instead?
Obviously, that math changes if fuel is expensive and real estate is cheap. Wal-Mart loses its advantage over its competitors.
They are, but whether they will succeed is a whole different story. It's not easy to change a large, complex organization like Wal-Mart. They may want to sell fine wine and sushi to rich yuppies, but so far, the yuppies are still going to CostCo.
Target (Tar-jay) will do well as long as my sister still has a credit card.
Of course not. But they do it best. They are more committed to the strategy than anyone else, and will have a harder time changing.
Oh, yeah. I think all the box boxes are doomed, actually.
Who knows? Maybe Sears will find a way to make its catalog business work again. :)
I think there will be a lot less stuff to sell, and a lot fewer dollars to pay for them, and as DS mentioned, WM keeps track of what is selling very well.
Because the QuickieMart will still have customers. Indeed, it will have more customers, while big boxes will have fewer. And the big boxes are dependent on high volume to make a profit.
From the distributors who can no longer sell to Wal-Mart, either because Wal-Mart doesn't need the stuff, or can't pay for it.
Hopefully, he won't need credit.
I agree, but Wal-Mart has a lot of resources sunk into infrastructure for the current system. Computers and software to keep track of inventory, huge stores and distribution centers. And look at what they are planning for the future. RFID tags on everything, so just-in-time can be just-in-time-ier. Entering the financial services market, so Wal-Mart can be your bank, too. Expanding to Brazil, Canada, Japan, etc.
Wal-Mart has to do this kind of thing. Stockholders want to see growth. The local Mom and Pop store doesn't have to grow or die. As long as they aren't losing money, they'll be okay.
In Wal-Mart: The High Cost of Low Price, Brave New Films profiled a WM that negotiated with some town for an initial two years without sales tax. When the period was up, they abandoned the stores for new ones just across the town line. What this tells me is that WM is more than ready to adapt their store locations to current conditions.
In general terms, I am skeptical of the belief that PO is going to "get" all those groups that we don't like (SUV drivers, Wal-Mart) leaving PO-aware people with PV panels, backyard gardens and wood stoves to inherit the Earth. Energy depletion will certainly bring change, but I suspect many of the pre-Peak winners will also be post-Peak winners.
Agreed. There's no guaranteed anything after TSHTF.
That tells me they are very short-sighted. Who is going to give them tax breaks again, if they keep doing that?
That is not what I am arguing, nor is what I believe. I am arguing that the companies that are best-suited for the current situation are often the worst-suited for a radically new one. (Regardless of whether I like them or not.) Sort of like organisms that are most specialized tend to be most vulnerable when the environment changes.
http://morningsentinel.mainetoday.com/news/local/2563816.shtml
I have to wonder if these big-box places might not find it worthwhile in the, well, Medium-Run.. to work with city-governments who are planning Mass Transit, in order to locate stops and stations at their outlets. We have busses that run to the Maine Mall, in South Portland, but I've wanted to see us get more serious with our Routes, and maybe start looking at the Electric Light Rail kinds of options as a next step, to make it really easy to get to shopping centers. Big disincentive to the City of Portland, of course, to send the spenders down to SOUTH Portland, but certainly a number of Benefits could be weighed into the mix, including perhaps the ease with which you could park at the mall, and then have easy access IN to Downtown as well, without the hassle of dealing with 'Them City Drivers', as people from within a couple of miles of Town are more than apt to say around here.
Other Portland stops are next to supermarkets, small town centers and new shopping malls (eastern terminus of Blue Line and near western terminus of Blue Line). Blue Line also goes through middle of pedestrian mall at "Saturday Market".
Portland and San Diego have lead the nation in Light Rail development. Congrats ! :-)
Beyond the line to Boston, I hear that there's a line between Freeport and Rockland, I think it was.. now if they can just bring it back down to Portland, then the east coast would be somewhat accessible again. (If Boston deigns to connect the Nor'easter to South Station)
Wal-Mart SuperStore is 6 blocks away (came in against great neighborhood opposition) and is likely to reopen in a few months.
Saturday Farmer's Market (~8/10 mile way) is also about to restart.
WalMart, whatever it's faults, is well managed and will strive to adapt. Shifting distribution centers to rail sidings and delivering as much as possible by rail is one possible adaptation.
On a related matter, I also had a conversation recently with a man who is designing (for UK MoD I think, sorry to be vague) a form of self-correcting sailing ship, ie it mechanically corrects it's course according to GPS programming. The practical upshot is that very large vessels can have much fewer crew numbers (conceivably zero, although it probably won't get to that). I think we'll see a return to the clipper trade. And more piracy, sadly.
.. but like 'Highway Robbery', and 'Terrorism', it has this air to it that suggests some special kind of criminality, and evokes all the old images of Rapiers, Peglegs and Broadsheeted SquareRiggers when in fact, the same dangers and many others still lurk out there, just in more contemporary, hence mundane clothing. Sure, we don't see bands of brigands waiting on the turnpikes to jump from around a tree and take our Galleons, but will the Storybooks a hundred, two hundred years from now give kids nightmares with their tales of the dark times of Carjackings, Skyjacking, DataMining, bloody 'Identity Theft' etc? (yeesh! that last one sounds like a George Romero pitch, even today!)
IMO a hundred years hence people will read novels and perhaps watch movies or TV series on the Romance and Danger and Suspense of the Good Old Days of . . . commuting!
Yes! The drama: Will you get to work on time?
The blood of accidents . . . the road rage . . . the building suspense of gridlock . . . those blinking red lights in the rear-view mirror.
Just as we romanticize the cowboy life (which was mainly about being cold, sunburned, saddle sores, and using sixguns to shoot crippled cows), I daresay that in the future the danger and glamour and incredible hardiness of the twentieth and early twenty-first century commuter will become the stuff of legend and myth when almost nobody commutes by car anymore.
But going from the museums I saw and conversations I had, there is a real sense of loss. There were thriving communities, social clubs, shop floors, skilled physical work where now there is paper shuffling and real estate deals.
Outside of the charming and busy city centre, there is quite a lot of post-industrial wasteland dotted with the odd retail park. Didn't see a ship on the river the whole time I was there.
The Questions are.
When will it happen? 2006, 2007, 2008
How far will it go?
Will the coming nose dive for the US economy slow the world enough to push the Peak into a decade long slow slide?
I am sure there are other questions, but lets start small for now.
P.S. No I am not looking forward to it, But I have lived out of my car before.
Questions of both oil and NG production decline rates - in this sense, absolute values - are, in my opinion, likely to overshadow any influence of America's economy on consumption. Look at the reality of North Sea or GOM declines (in the case of GOM, I am including destroyed/written off production platforms also).
Of course, I am not attempting to deny the economic aspects of production/consumption, but as Italy and Britain have learned, the reality is there is only so much in the pipeline, regardless of what you planned or expected or hoped or paid for. And a certain amount of demand (to keep from freezing, for example) seems to be related to something not quite considered in economic textbooks, which is the human drive to survive.
I believe the reality of decline will overtake economic considerations (in the sense of whether an economy is booming dynamically, landing softly, or crashing hard) much sooner than most people expect. Last winter in Europe was a not so tiny warning light flashing red. Actually, the essentially warmest winter recorded in the U.S. should be even a bigger flashing red warning, unless all you noticed was that your heating bill was payable and there weren't any fuel shortages.
Not that I wish to talk about resource wars, realpolitik, and true demand destruction, however.
And for all the calls for transparency in terms of oil/NG production/reserves, has anybody noticed that most sources of hard numbers have not become noticeably more transparent or accurate (well, TOD being an exception), even though this has been proposed as a straightforward and necessary first step in handling the looming challenges? Or even, dare I hint, that these numbers have become even harder to access or to trust? Not that I want anyone here to develop any nasty suspicions, mind.
Thanks for the link to Senator Lugar's comments (pdf warning)
Sen. Lugar talks about a new "realism":
I never knew reality was subject to negotiation and balancing acts. You learn something new every day. Anyway, it's good to learn that some in the US Senate are starting to see this new realism. Maybe that is what historians will call our era. We had the age of Enlightenment, the Industrial Revolution, the Information Age, and now at long last, the Age of The New Realism. Maybe historians will simply call it the Age of WTSFHTF (middle F=finally).
More from Lugar:
BTW, did you know that our American politicians are doing the exact opposite? They are actively trying to deform and destroy the ability of American inventors to enage in "engunity". The last thing Big Oil wants is a disruptive new energy technology just when crude is about to hit $80/bbl. For more on Patent Deform, see piaUSA.org. For an example of how Deform thought is implanted into major US newspapers, see this NYT editorial (warning: full of lies and distortions.).
He also stated that there are currently no alternatives to replace oil. He was going to lay out his plan but it was late so I missed it..
SO I guess the word about PO is gaining ground even if its with someone like Robertson.. Interesting to say the least..
Anybody out there catch this part of what Robertson said?
I posted this over on the "birthday thread," but I think it got lost in the birthday discussion.
The EIA showed a contraction in crude oil inventories--which counts all grades of crude, from very heavy, sour to light, sweet--last week, primarily because of a fall in imports to 9.3 mbpd.
Of course, this may be, and probably is, a statistical blip, but production declines in the vicinity of 50% of Qt worldwide are more worrisome than temporary production declines at around 40% of Qt. Last year, there were only five weeks, out of 52, where we showed imports of less than 9.5 mbpd, and all of them were in September or later.
As I have previously commented on, I believe--based on Khebab's technical work--that we are facing an imminent crisis regarding net export capacity, as the top four net oil exporters--Saudi Arabia; Russia; Norway and Iran--face aggregate increasing domestic demand, combined with falling production. Note that car sales in Russia in 2005 were up 15% year over year, just as oil production growth compared to prior years slowed dramatically. (Currently, Russian oil production is only up about 1.5% year over year. I suspect that net oil exports are already falling.)
Perhaps if you have the data a graph might get attention.
http://www.greencarcongress.com/2006/03/china_increases.html#more
The tiny gasoline-powered Zap Smart car gets no better mileage than a Prius, maybe only 40mpg, but costs about $20K. I can't bring myself to write "only" $20K.
http://www.greencarcongress.com/2006/03/zaps_americaniz.html#comments
The Zap Xebra EV is still not for sale.
The Twike web site is now looking for a Canadian Car Import Specialist instead of an NHTSA Specialist. Maybe they're close to actually selling their $20K EV here.
The following EIA table has top oil producers (counting all liquids, including refinery gains) and top net oil exporters for 2004: http://www.eia.doe.gov/emeu/cabs/topworldtables1_2.html
Following are the produciton numbers for total liquids and for crude + condensate for the top three producers in 2004 (mbpd), followed by total liquids as a percentage of crude + condensate:
Saudi Arabia: 10.37/9.1/113%
Russia: 9.27/8.8/105%
US: 8.69/5.4/160%
I suspect what these ratios primarily signify is the differences in refining capacity, and therefore refinery gains, in the three countries. However, it also illustrates why I think "total liquids" can really distort the picture. IMO, the best number for actual production from oil fields is crude + condesnate.
http://tinyurl.com/mrsz5
(that Tinyurl.com link will take you to a Bloomberg story)
You can shave 500 million barrels of global oil reserves in one fell swoop. Chevron's Knotty Head discovery, the deepest well ever drilled in the Gulf of Mexico, holds about half as much oil and natural gas as originally estimated. The company still considers it "one heck of a big find."
This brings up the question: We've been told there are all these huge oil reserves waiting to be tapped out in the deep water. What if those reserve estimates are wrong?
I also found this bit in the linked story interesting: "Additional drilling to gauge the extent of the field has been delayed because no rigs are available in the Gulf"
Barents Sea Well Fails to Strike Oil
http://www.rigzone.com/news/article.asp?a_id=29904
ExxonMobil's Norwegian Wildcat a Duster
Norwegian Petroleum Directorate Wednesday, March 01, 2006
ExxonMobil has completed drilling wildcat well 15/9-22 in license PL241 in the Norwegian sector of the North Sea.
This was the first wildcat well in PL241, which covers parts of blocks 15/8 and 15/9. The license was awarded in the North Sea Round in 1999.
The target for the well was a sandstone prospect from the Middle Jurassic period. The prospect was located approximately 8 km south of the Sleipner field in the North Sea. Wildcat well 15/9-22 was drilled to a total depth of 3888 meters into Late Triassic rocks. The well was dry and it will now be permanently plugged and abandoned.
And an even more alarming sign of the apocalypse:
New fuel standards for big vans, SUVs?
Anyone who screws up so horribly on such an important issue that he's supposed to be an expert on loses all credibility. At least in my book.
So now we're supposed to be cheered by the fact that Thomas Friedman is talking about "A New Grip on (Energy) 'Reality' ". I take no comfort from that. I'd feel much better if the New York Times gave the space to Stuart Staniford or Professor Goose or Super G or ANYBODY who has a much better grip on reality than Tom Friedman.
So, what 'bout it being on purpose? Is it coincidence for example that we sent our most unexperienced troops in Iraq? That we did so many "mistakes" in pacifying the region?
I can think of many reasons, each far outweighting the benefits from the opposite strategy.
First of all a peaceful Iraq would not need americans to pacify it. What a better excuse to have a permanent military presence than a constant insurgency?
Second I can not stop thinking that we have that cover goal of separating the country in 3 states in the good ol' "devide and conquere" tradition.
And third, increased terorism and instability in the Middle East work perfectly for our strategy of being a monopolistic world policeman and for tightening security measures at home.
On the downside we have increased criics at home, but who cares if the media is ours? Besides we can always cook the elections if needed, right? We also have higher oil prices but this turns to be a win-win fact - we are both benefiting our friends in the oil companies, and leaving the Iraqy oil in the ground where it will be much more needed in the next decades.
I think it makes sense.
http://www.nypress.com/18/16/news&columns/taibbi.cfm
It gets funnier as you go...
Cows chew their cud in herds.
A murder of crows hunts for carrion.
I do feel sorry for anyone, however, so reckless as to consume a Cinnabon--horribly overpriced way to inject about seventy grams of transfats into one's arteries.
Ease up on Friedman. He is doing his best. It is hard to be the son of somebody famous. (Alas for poor Milton F., yet another example of regression to the mean.)
http://www.daviddfriedman.com
His The Machinery of Freedom is one of the classic books of anarcho-capitalist libertarianism.
But I stand by my point that we are being too hard on the unpopular one(s).
http://www.dailyreckoning.com/Issues/2006/DRUS030706.html
-A
Will Americans do the "right" thing, and learn to support their locally-supplied, local stores? Or will they continue to do the "American" thing, and buy their stuff as cheaply as possible?
Ah well, Smart & Final is a 1.5 mile walk for me. They have 50lb bags of oatmeal.
Mom and Pop may see a bit of a comeback with their market, as some people become more reluctant to drive further ... but they won't beat the big box stores on efficiency.
I boldly predict that if a fuel-based crunch hits, it will be in the middle ... the supermarkets with too many types and sizes of soda pops on their shelves. And I'd expect warehouse and corner markets to both expand (heck, maybe mom and pop will stock their store from the same warehouse stores).
"Food deserts" are already something of a problem:
Many forced to buy groceries at gas station convenience stores
Many of these "food deserts" are in rural areas, but some are urban. I live near a small city that could be considered one. About ten years ago, the last supermarket in the city closed. There are a bunch of larger, newer supermarkets in suburbs and commercial districts nearby...but for inner city people who don't own a car, they may as well be on Mars. The bus system is terrible, and it's not like you can carry a lot of food home on the bus anyway. Some hire taxis once a week, but again, that's not a convenient or cheap solution, and if it's raining, forget it. People end up buying their groceries and supplies at convenience stores. It's wicked expensive, and the food tends to be very unhealthy, but it's in walking distance.
Good point. Downtowns are typically very poorly served when it comes to buying groceries. My son lives near (approximately three blocks from) downtown Minneapolis and has no car. Shopping is a real pain: He has to walk many blocks from a small place with limited selection, very high prices, and the occasional holdup as a hazard of shopping. Shopping by metro bus (service reduced recently) is a burdensome and inconvenient alternative.
Both Target and Wal-Mart generally have picked intelligent locations: Sometimes they go head to head within a block or two of one another. I think much of Target's recent stock runup was due to hype about their opening a bunch of "Superstores." Also, one reason Wal-Mart's stock price is near a five-year low is that it was bid up to insanely high levels during the stock-market boom.
I've noticed that where Wal-Mart and Target go head-to-head, the Wal-Mart store (on a square footage basis) does much better in sales than the Target. I think part of this is difference is becaus Target operates with higher gross margins--and hence higher prices.
Asking customers what they want, etc.
And I think I should refine my terminology. I think warehouse stores will survive in most scenarios, including those more pessimistic than my own. I tend to group "big box" with them, but I guess that is not correct.
I think (in my moderate peak oil view) that the average supermarket will become more like the small chain we have here called Trader Joe's (fewer items on offer, one brand of flour, etc.), and in turn Trader Joe's will more extreme in its simplicity (more dry goods, less frozen).
VERY good point. Two scenarios that I have lived in...
The first, living in San Francisco while in college and never having a car. ALL shopping was local, and with the MUNI system so efficient, I could shop every few days and carry everything on the bus.
Twenty years later, living in Cut And Shoot, TX. Roughly 15 miles to "town" (Conroe with WalMart, Home Depot, etc.) We opted to drive to the corner store 4 miles away more often than not for daily needs, only going to town every week or so, despite the mark-up in prices locally. And this was in 97 to 00, with gas prices in that area probably the lowest in the nation.
Zara's (~1/6 of a block corner grocery store (member IGA), another corner store on Jackson & St. Charles, a third corner store further away (5 blocks) that once served the St. Thomas Project,
A combo general store with food items & hot food as well on Magazine (Zara's makes good po-boys as well)
Local supermarket chain of Ro'bert's
Walgreens and a
Walmart SuperStore (6 blocks away, opened against fierce eneghborhood opposition. During construction, graffiti said "build it and we will burn it". Instead we just looted it.
Walgreens opened first, limited hours, then Zara's with owner + 4 employees vs. old crew of 25. Walmart will likely be next to last to reopen (Roberts may not).
Given volume of sales, I am not sure that Zara does not have higher employees/sales than Walmart.
Tastes in New Orleans differ from general US (i.e. we have taste) so there is demand for specific items, better served by local than national decisions.
In Phoenix, I am appalled at the amount and variety of hyper processed "foods" and the paucity of basics to cook with. One or two types of rice in PHX, limited frozen veggies (one traditional way of dealing with out-of-season) (More space in frozen pizzas than in frozen vegetables !). I am used to (even in Walmart) to more "basics" (6 to 8 types of rice, beans, veggies, meat cuts) and far fewer microwave & serve foods.
IF Walmart cna adapt (i think tehy will), there is always room at the bottom for the lowest price food, etc. Especially with high priced oil.
They may reduce sales floor space and enlarge back room storage, simplify and serve a smaller market (those within, say, 5 or 7 miles).
Incidentally, for those interestd, the real estate lawyer Emanuel Halper has written a series of articles on the early history of the supermarket in Real Property and Propbate Journal. One can find it on the ABA website witha bit of effort. His articles have intriguing details such as the importance of automatic doors, the development of the shopping cart, the need for parking and financial and lease details that led to the 1930's growth of the supermarket.
Meanwhile, it is mostly the poor that shop at walmart (if those whose shadow does not darken the door could easily discover) - as oil rises, the middle class will become new customers, as posted earlier. Walmart bashers, who might be uncomfortable to be seen mingling with typical Walmart shoppers, never reflect on the great benefit walmart provides to the poor, and the poor communities lucky enough to have one. The poor children are in fact quite happy to have plastic crap toys - without walmart, many products would be reserved for the (wealthier) bashers.
True, Walmart jobs are not union jobs, and might not offer very good health care, but are nevertheless better than what they had; indeed, there is a quite a similarity between those who make the products in foreign countries and those who buy them here. Walmart bashers would much prefer that commercial intercourse between these two groups be prohibited.
California unions were successful in preventing a walmart from being built in LA, until a poor community voted to allow one in. Said the mayor, "we need the jobs and the products - none of the supermarkets, or other large stores, are willing to build here, and many here don't have a car to drive to another community".
Yeah, they're so lucky to have all their small businesses destroyed, and to get to work a fun job at Wally's!!!
http://www.wakeupwalmart.com/facts/
Check this link to see citations of other key benefits:
Wal-Mart wages negatively impact overall wages
Lower wages mean less money for communities
Longer term effects of Wal-Mart can be disastrous
Wal-Mart stifles competition
Wal-Mart destroys the environment
Wal-Mart increases vehicle traffic
Wal-Mart's empty stores are blighting communities
And Billions of dollars in Subsidies, or should I say Corporate Welfare, - way to go free market!!!
The ladies didn't seem to be caring much where the carrots came from, as long as they were good. That saved tons of time to do their canning, cigs, coffee and talk. And I got to jump on the A and hitch rides to my buddys'.
But anyhow- the real solution to energy is to put the true price on it. So?
I think what killed this kind of thing is the same thing that killed almost all door-to-door sales (Avon, etc.). No one is home during the day.
I used to play with sticks, mud, tar, and worn out roller skates- and felt I had everything I really needed, except maybe a screwdriver and pair of pliers-- which I never got.
Something totally nutty goin' on here, not to mention sinful, criminal, stupid and so on. I go with the guy who recently posted that we have to impeach bush, congress, the parties, votors, and us, and start over.
The June Cleaver model was common only for moderately well-off white families, and even for them, only for a brief period, historically speaking. Among non-white families, most women worked outside the home, even in the 1950s.
On what do you base this statement? For the last 15 to 20 years I have lived in solid to upper middle class areas WITH WalMarts and have never felt, and do not today, (as someone beating the median income by a significant amount), that I was slumming by going to WalMart.
"Iraq seems to be the new swing producer in OPEC, but this is not necessarily a good thing for consumers," said John Kingston, global director of oil at Platts.
I laughed out loud (that's LOL for you purists).
It seems that all of OPEC dropped production last month, except for Iraq and that was the swing production that allowed OPEC to declare an increase for the month. (Iraq was 260kbd up; rest of OPEC down 20kbp.) The whole article is worth a read.
P.S. - I didn't go back over the last 300 comments to see if anybody else posted this; if they did, I apologize for wasting the space.
I think we need to consider the synergistic effect of several factors.
- Peak production itself ¡V the ¡§peak community¡¨ is doing a pretty good job with this one.
- EROEI ¡V this seems only to get significant attention regarding alternatives such as biofuels and non-conventional oil such as tar sands. But it¡¦s also declining for conventional oil. Jan Herdal thinks in aggregate it may be as low as 2.5:1 already http://www.energybulletin.net/14136.html Yikes!
- Population increase. As we descend the peak, we'll have an amount of oil available to society equal to the amount available at some earlier date. But the population competing for that oil will be much larger, so the availability per person will be going down, even if production were not.
- Net export capacity. Westexas talks about this often on TOD. I think he¡¦s right to emphasize it. As production declines, and population and/or economies grow in exporting nations, their net exports will shrink geometrically.
When you consider these factors together, we are heading for a brick wall. Any soft landing that might be possible when just considering peak production itself ¡V if decline rates don¡¦t exceed a few percent ¡V seems utterly unachievable when the synergy of declining EROEI, increasing population and sharply lower net export capacity is taken into account.This table shows a very rough cut at this interplay. D/C is domestic consumption, AfE is available for export. Impop is the population of importing countries (assumes exporters at .5 billion) Last column shows barrels per year available for import per person.
Prod EROEI net D/C AfE Impop Bbl/y/c
80 10:1 70 40 30 5.5 bill 2.0
80 2.5:1 60 45 15 6.5 bill 0.8
75 2:1 50 50 0 7.0 bill 0
Very important and very true. Note the Platt's report you cite relates only total OPEC production - not the more relevant amount available for export. I wonder if any major reporting organization is tabulating and report the amount available for export each month. Now, THAT would be an interesting number.
The cumulative shut-in oil production for the period 8/26/05-3/22/06 is 139,376,908 bbls, which is equivalent to 25.46% of the yearly production of oil in the GOM (approximately 547.5 million barrels).
= 7 days of annual U.S. consumption.
The cumulative shut-in gas production 8/26/05-3/22/06 is 692.299 BCF, which is equivalent to 18.967 % of the yearly production of gas in the GOM (approximately 3.65 TCF). = 11 days of annual U.S. consumption.
The answer is to deliver goods to a central location - by rail, by river, maybe even by highway - that is close to population centers. Somewhere people can walk or bike to.
I don't see how this can work in anything less than 30-40 years. Take Denver, near where I live, as an example. Denver's just under 500K people, most of it in areas that look only slighly denser than the oldest suburbs. The surrounding suburbs are pretty close to twice as many people as Denver -- in another 20 years, it's probable that the suburb of Aurora will overtake Denver as the most populous "city" in the state. None of the suburbs have anything approaching a real downtown.
Putting most of the population within walking/biking distance of a major shopping hub will involve replacing much of the housing stock. I'm inclined to believe that the solution we see in 20 years is more likely to be small electric vehicles. With a little luck, we'll have the technology to put some sort of solar electric generator on each roof. Suburbs are always going to be somewhat more energy intense than an urban downtown, but there are some possibilities for having them generate enough to make up the difference.
In Third World nations, it's not unusual to have 15 people sharing a small apartment. It will be like that again. No, the government is not going to round people up and force them to hot-rack. It will happen naturally. People can't pay their rent or mortgage, and move in with family. Coworkers sharing an apartment when now, they may each have their own. This is the obvious way to deal with the problem of high fuel costs. It's just not obvious to Americans, because we're so used to single-family housing, preferably 4,000 SF McMansions. Indeed, many towns have laws limiting the number of people who can live in one residence. That will change. The laws will be revoked, or ignored.
We rented to one family and they asked if a second could move in (we rented at old rates to those flooded, 75% higher for a FEMA contractor, no increase for 2nd family).
A Tulane professor was sleeping on colleagues floor on air matress, until he bought a futon. (Local futon shops have commericals announcing each new shipment).
Others sleep in tents inside their gutted homes, etc.
Here in England we have "Adverse Possession" some 20,000 people a year make a claim and 15,000 of those are successful, basically you need to use the property for 12 years, this applies to land as well.
If you own land and find someone "squatting" then you make an application to the county court, this can take 4-12 weeks but most squatters leave as soon as they have been served. Once in court the owner shows proof of ownership and the judge gives a date of eviction (sometimes the next day) the only exception is if their are children under the age of 5, then I think social services gets involved to find housing.
I don't understand how you can consider the crooked econo-croaks, .. err sorry, timber toads at CT to be "academic". Should not an "academic" person be willing to become enlightened in all realm of scholastic pursuit, including chemistry, physics and geology? And if so, why do professors of "economic science" get a hall pass to bypass all understanding of thermodynamics? I took a quick look at the CT link and gagged at what I saw as one economist after another praises the substitutabilty of solid coal in place of liquid oil. They don't seem to understand that a large amount of energy is needed to break the intermolecular bonds of a solid in order to convert it into a liquid. I give them a grade of "F" on academic breadth and enlightenment. Sheesh.
To use one example, Washington DC's Metro carries 40% of DC commuters to work, but uses well less than 1% of the local power. Total DC Metro useage is in the range of errors in forecasts for load growth.
(Doomers, you'll love this one.. maybe love to despise it.)
IF we were to come across another source of REALLY cheap energy, on a par with what we've gotten from The Oil Age, or (since this is hypothetical..) even far more so, and it was here and set-up before we fell through the floor with our current energy-dependencies, would it be a good thing? Could we do anything positive with access to yet more power than we've already had? (Self-limit population, Address Species-losses, Pollution and other Overconsumption-related problems..)
http://www.vheadline.com/readnews.asp?id=50421
I am linking an article which looks to one of the old, legendary (or mythic) Tesla power supplies which someone has just re-discovered/re-worked, and this Venezuelan article has some familiar claims about how this 'Free Energy' can not only preclude the current fossil-fuel crisis, but also tip-over the Capitalist Apple Cart, since this resource would not be Restrictable, and therefore not 'Profitable' in an economic sense.
I'm not suggesting I believe in this particular Little Black Box, and it's free and side-effect-free wonders, though it seems that Tesla did grab onto some concepts that we're still fairly awed by.. (He had fluorscent lighting going, decades before we were even over the spectacle of incandescent lighting) .. I'm more thinking about the adage, "Absolute Power corrupts Absolutely" , and the fun-interplay between "Energy Crisis" and "Power Struggle"
If socialists and capitalists could just socialise a little, and then capitulate..ahh, what a wonderful world it would be.
"The world would not be in such a snarl, if Marx were born Groucho, instead of Karl"
(I'm not even anti-communist, I'll wait til they actually try it before I decide)
'Democracy is the worst form of Government created by man, except for all the others..' Churchill
Street heating complementing or replacing snow plowing.
Plasma burning of mixed garbage and old mixed waste followed by electrodynamic sorting into usefull materials.
De decertification with desalinated water.
Synthesis of clean burning wehicle fuel.
Aluminium roofing and houses built with energy intensive extremely long lasting materials. Aluminium, foamed glass, reinforced concrete, ceramics.
But it would more or less be as it is right now, wich might indicate a lack of imagination.
Have you been to Iceland ?
Street heating there (sidewalks and intersectioons mainly), with outdoor heated swimming pools, adn stores keeping their doors open in -5C weatehr.
Just pipe in water from your local volcano ! :-)
http://www.middleeastforex.com/index.php?section=147
The dollar IS coming under attack.
Battery-powered clothing for heating (and maybe eventually cooling). New tech could make it a lot more convenient and effective.
Americans have gotten used to the idea that indoors should be a shirt-sleeve environment, year-round, everywhere. We're probably going to be unwilling to give that up. Shirt-sleeve means we won't easily wear cardigans or keep crocheted throws next to our chairs to keep ourselves warm, as our grandparents used to.
But we might be willing to wear high-tech lightweight clothing to keep ourselves warm. They already sell battery-powered gloves and socks that make a difference in outdoor weather using as little as two watts. A ten-watt undershirt would probably allow a significant reduction in building heat.
If things got really cold, electric heat delivered between your clothes and your body would allow you to eat less. Even if the electricity is fossil-generated, it's probably a significant savings over fossil-generated food.
The new tech:
- Rapidly rechargeable batteries and ultracapacitors. If you can recharge in one minute, rather than two hours, then your garment will never be unavailable because you forgot to charge up. Also, flat batteries will be more comfortable.
- Better sensors and controllers. Rather than just dumping a constant amount of heat whether you want it or not, it will be possible to sense skin temperature, core temperature, and ambient temperature, and use exactly the right amount of heat to keep you comfortable. Also, better sensing will be safer--current tech can cause burns if used on insensitive skin (diabetics, etc).
ChrisYes, you would turn your whole house into a (low-power) microwave oven. Since microwaves heat meat (i.e. you) and not air or furniture, you can feel warm and comfortable while the thermostat reads 50 degrees F. It turns out to be much more energy-efficient to only heat the people than to heat the whole room.
This marvelous new idea is available free for anyone here to commercialize and start up their new business. I even came up with a slogan for you: "The microwave house of the future - gives you that healthy glow!" Nothing like the American entrepreneurial spirit to bring the profits rolling in.
Chris
Consider this link at Energybulletin:
http://energybulletin.net/14143.html
We should all be shooting for the detritus efficiency level of the Bangladeshis at two cups of ancient sunshine a day. How can this be done, especially here in America?
A first place to start is the scientific commission I mentioned in the TOD birthday thread. We need the best & brightest to evaluate ERoEI in every path forward.
The next is to designate certain entire drainage basins or habitats as Powerdown locations. Perhaps Richard Rainwater and his rich buddies could kickstart the first location by buying all the land around his already large survival farm in the Southeast. It is vital that the entire area ecosystem is a contiguous whole so that the other native lifeforms can expand as free as possible without the deleterious effects of motoring detritovores and all the other activities that this lifestyle entails.
The ONLY, repeat ONLY, legitimate use of Govt Eminent Domain Power is to expand these biosolar habitats to exclude detritovores, so those dedicated to a daily biosolar lifestyle can live in this habitat. Ruthless monitoring by the commission to make sure sustainability goals are maintained in pop. levels of all lifeforms.
Rip out any infrastructure deemed against long term sustainability to help expand habitat for other lifeforms: freeways and mining operations spring to mind as first choices. Best horticulturists and permaculturists on the planet help research optimum natural yields/sq acre.
The other habitats, full of detritovores, continue on as usual, but with heavy emphasis on finding optimal tech solutions to assist the biosolars. A protective force, what I call the Earthmarines, are funded by the detritovores to make sure absolutely no corruption, theft, or infiltration above sustainabilty occurs to the biosolars. Recall the other poster's comments that years of farming/gardening work can be destroyed in minutes by marauders. In short, this whole idea is pointless if any ERoVI > ERoEI occurs.
This bifurcation of society into detritovores and biosolars is the only way to clearly determine the best path forward without violence. The biosolar breakthroughs of social structure on tremendoously reduced 'two cups of detritus energy living' discovered in these initial habitats, combined with any detritovore breakthroughs in 'natural' infrastructure such as solar PV, windmills, everlasting clothing, super-efficient housing, super-recycling loops, etc, can then increasingly point to the optimal conversion of the remaining detritovore habitats.
Obviously, this is just a super-brief synopsis. Hopefully, other posters can help determine the best pro & cons of my hypothetical proposal to assure that ERoEI > ERoVI. The best starting point for Powerdown, IMO, is the elimination of violent acts, corruption, and theft.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
mabye you seen this before
http://www.humboldt.edu/~ccat/pedalpower/
washing machine powered by a bicycle
yeast extract is rich in B12 which as a vegan I need, I've been told it grows as a microrganism on the leaves of plants and is rife in soil, unfortunatly the supermarket stuff gets washed before they sell it, guess I'll have to carry on buying my veg from the local organic farm.
Mabye I could offer them my military skills when the SHTF in return for dirty carrots?
no extinction of other species
no nuclear weapons or nuclear plants
no manufacturing of carcinogenic or mutagenic substances
no adulterants in food
no descrimination by reason of sex, race, age, religion, or ethnic origin
no private cars
no advertiser controlled or or broadcast television
no limitied liability corporations
no absentee ownership or control one employee, one vote
no growth in population
Yes, the NW seceding from the Union would be a logical place to start a Powerdown Habitat. Efforts are ongoing in the New England area too:
http://www.vermontrepublic.org/index.html
Tainter, and other noted writers, discuss the devolution away to less complexity; a simplification of our social structures to save energy--sounds good to me.
The tough part is getting the detritovores to fund the Earthmarines to keep out infiltrators into these biosolar powerdown habitats. For example, if 30 million people in the Southwest starts migrating to the NW, then any attempt at sustainability will be pointless. The Southwest, and other detritovore areas, have to be willing to stay where they are, compelled by force if necessary. If a true energy crisis erupts, they will have to die in place. Nobody wins if the initial Powerdown areas are hopelessly overrun.
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
But I need two things:
One, my morning coffee-shop appearance where I get to tease the retired cowboys about having to go back to riding horses, and;
Two, an Intenet connection so I can continue to appreciate the inspired thoughts of people like you. I'm still enjoying the idea of fire tornados in the deserted ghost towns of Sun City. An almost Abbeyesque vision!
Thxs for the compliment. But I am becoming concerned that TODers are not doing enough 'outside the box' thinking. Powerdown will be the most difficult task to ever face humanity-- we need huge amounts of discussion on the viability of all sorts of radical ideas and plans.
The concept of heavily armed Earthmarines to protect biosolars from detritovore invasion is logical if one desires to protect fragile crops and new-form farming infrastructure. I would like to see a discussion on how the detritovores could be induced to fund an Earthmarine project sworn to kill them just when they might find themselves to be most vulnerable [cold,hungry,thirsty].
As mentioned before, we need to radically change our culture to prevent ERoVI > ERoEI.
Bob Shaw in Phx,AZ Are Humans Smarter than YEast?
We've flirted with the Earthmarine concept here in the valley to protect the biosolars from the detris ... We've certainly got enough guns around here.
My quiet hope is for a semi-nonviolent devolution into bioregions, or provinces, in which government would be real again, rather than enablers for white-collar looting. Survival government is what we need.
One problem here is we have huge amounts of coal-bed gas on the mountainside, but Halliburton controls it. I would assume they'll develop their own mercenary army to ensure that gas doesn't get tapped for local survival.
Interesting road we're on ...
That is exactly what the Ecotopians did. They closed their borders and kept everyone out. In addition to banning private cars, they instituted a 20 hour work week, and mandated tours of duty in their forestry program. It was a very urbanized society. They expected folks to live in cities and leave the land for growing. They dismembered the suburbs. The books are old now, written in the late 1970's. What is amazing is how dead on many of the predictions were for the situation today.
Thxs for responding. Keeping everyone out is the crux of the problem because WTSHTF everyone else will want IN to these biosolar habitats--this cannot be allowed, thus my Earthmarines. But the biosolars will be so busy and poor, in comparision to the detritovores, that they cannot afford to be the Earthmarines themselves: the detritovores MUST BE WILLING to DIE IN PLACE at crunchtime, or be willing to fund the Earthmarines to make it so. Otherwise, cooperation is gone, violence rules, the horrific Last Man Standing Scenario.
Overshoot forces violent reactions; but it doesn't have to if cultural mindset can be changed in time. Consider the reindeer on St Matthew Island, they died in place with no violence: http://dieoff.com/page80.htm
This is the optimal way to deal with Overshoot, not Easter Island dynamics. But are humans smart enough to peacefully optimize the squeeze thru the Dieoff Bottleneck?
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
Energy Bulletin quotes an article that says:
Despite repeated reports over the past 18 months or so that the planned bourse would finally open for business on March 20, 2006 -- and go head to head with the New York Mercantile Exchange and the ICE Futures Exchange in London -- the start date has been postponed by at least several months and maybe more than a year.
"In the middle of 2006, we are able to start the bourse," Mohammad Asemipur, special adviser on the project to Iran's Oil Minister, said when reached in Tehran. The plan is to trade petrochemical products first, with a crude oil contract coming last, a rollout that likely will take three years, he said.
Don,
I am used to highly appreciate your comments but have just read the old thread
http://www.theoildrum.com/story/2006/3/15/05228/0407#131
and need to answer.
Maybe too late to throw punches but here it goes.
You say "Germany .....was unable to mobilize its economic resources efficiently until Speer did it in 1944--way too late. The Germans frequently did really dumb things like taking troops away from the Russian front to help with the fall harvest--which helped their GDP very little but may have cost them the war. They never encouraged women to get into the labor force, which cost them plenty in terms of lost output, and on and on."
In fact Germany didn't need to mobilize in the first three years of the war - why, if they got plenty of the slave labor force and the resources of almost all Europe. Only after Stalingrad in the winter '43 Germany began a transition to the mobilization type of economy. And in such economy you need real things such as bread, margarine, cannons, battle-planes, fuel etc. (and not fairy GDP numbers consisting of services and god knows what else). That's what in essence the mobilization economy IS. That's why Germany did take troops away from the front to help with the harvest. Troops need bread.
You say "To a large extent, national income accounting (GDP, GNP, National Income and all those related measures) was developed in the United States to help in mobilizing economic resources during the second world war. Germany had nothing corresponding to the Gross National Product data or even the concept"
You, Americans, as always, think that The USA is The Motherland of Elephants.
In actual fact the first assessment of gross national product was the first Soviet 5 year economic plan adopted in 1929. In the mid `30s the concept of gross product got across the border into fascist Germany and only after that this concept appeared in the english language economics (of course with certain modifications and without reference to the original sources). And don't refer to wikipedia (or other such bullshit).
Maybe if you could speak other languages you could get a glimpse on what happens outside of the english speaking henhouse.
Andrei, Moscow.
I am familiar with the input/output accounting systems to which you refer, but they are a complement to rather than a substitute for GDP data and other measures of national income.
Speer's memoirs are, I believe, an accurate and reliable source for the progress (or lack thereof) of Germany's mobilization efforts.
Let me say above all, how much I admire Russians: Perhaps I have some Cossack ancestors, because when I saw on the History Channel that footage of the Cossacks on horseback cutting down the Germans with their sabers in front of Moscow on about 9 Dec. 1941, my blood stirred. The foolish Germans, obeying orders as always, had oiled their weapons, but at minus forty degrees they could not work the bolts on their guns, nor could they start motor vehicles. Ahhh, what a fine slaughter!
On another topic, I lust for a Ural motorcycle with sidecar. However, the Dneiper is much cheaper. Apparently there are quality control problems with the Dneiper, . . . but I was thinking: If you knew somebody who knows somebody, . . . maybe somehow I could get a good one. Just a thought.
A BMW? Since when is the original as good as the Russian improvement on it?
You know. There are two misfortunes in Russia - the fools and the roads :)
Unfortunately, the last thing I heard was that "AZLK" - the producer of that real tank-car hybrid, went into bancrupcy last year. We used to have a Moskvich in our family for 20 years... aaargh memories.
www.ural.com
I'm thinking of the Gear-Up model, or possibly the Retro.
But it is definately a nice and useful toy to go fishing or through the woods. I suppose it is also very reliable, they used to build good motorcycles even back in Soviet time.
http://tinyurl.com/ktcv8
http://tinyurl.com/jpubf
==AC