Pricey Gas? That's Reality

www.alternet.org

By James Howard Kunstler
May 30, 2006

It's actually kind of funny to hear Americans complain these days about the cost of gasoline and how it is affecting their lives. What did they expect after setting up an easy-motoring utopia of suburban metroplexes that make incessant driving inevitable? And how did they fail to register the basic facts of the world oil situation, which have been available to us for decades? Those facts are as follows: oil fields follow a simple pattern of production and depletion along a bell curve. Universally, when an oil field gets close to half the amount of oil it originally possessed, production peaks and then declines. This is true for all oil fields in the aggregate, for a nation and even the world.

In the United States, oil production peaked in 1970 and has been declining ever since. We extracted about 10 million barrels a day in 1970 and just under five million barrels a day now. Because our consumption has only increased steadily, we've made up for the shortfall by importing oil from other countries.

There is now powerful evidence in the production figures worldwide that we have reached global peak oil production. The collective nations of the earth will not make up for this by importing oil from other planets.

Contrary to a faction of wishful thinkers, the earth does not have a creamy nougat center of oil. Oil fields do not replenish themselves. Also contrary to the prevailing wish, no combination of alternative fuels will allow us to keep running the interstate highway system, Wal-Mart, Walt Disney World and the other furnishings of what Dick Cheney called our "non-negotiable way of life."

People who refuse to negotiate with the circumstances that the world throws at them automatically get assigned a new negotiating partner: reality. Reality then requires you to change your behavior, whether you like it or not. With global oil production peaking, we are now subject to rising oil prices, as markets are forced to contend with allocating a resource heading in the direction of scarcity. Oil prices are only likely to go higher -- though there is apt to be a ratcheting effect as high oil prices depress economic activity and thus dampen demand for oil which will depress prices leading to increased consumption which will then kick prices back up, and so on. The prospects for more geopolitical friction over oil also self-evidently increase, as industrial nations desperately maneuver for supplies.

Mainly though, the danger lies in the resulting instability of the super-sized complex systems that we depend on daily.

Trouble with oil will spell huge problems with how we grow our food, how we conduct trade, how we move around and how we inhabit the terrain of North America. These systems are going to wobble and eventually fail unless some effort is made to reform their scale and their procedures. For example, Wal-Mart's profit margins will disappear as higher diesel fuel prices hit its "warehouse-on-wheels."

Now, in the face of this, you'd think that the national leadership in politics, business and science would prepare the public for substantial necessary changes in the way we do things. What we are seeing across the board, though, is merely a desperate wish to keep the cars running by any conceivable means, at all costs. That is the sole target of our focus. Our leaders don't get it. We citizens have to make other arrangements.

But we must. We have to live differently. We're going to have to re-inhabit and reconstruct our civic places -- especially our small towns -- and we're going to have to use the remaining rural places for growing food locally, wherever possible. Our big cities will probably contract, while they densify at their centers and along their waterfronts. Our suburbs will enter a shocking state of economic and practical failure.

We cannot imagine this scenario because we have invested so much of our collective wealth the past 50 years in the infrastructure for a way of life that simply has no future.

We'd better start paying attention to the signals that reality is sending or we will be living in a very violent, impoverished and demoralized nation. And we have to begin somewhere, which is why I suggest we start by rebuilding the national passenger railroad system. It would have a significant impact on our oil use. It would put a lot of people to work on something meaningful and beneficial to all ranks of American society. The equipment is lying out there rusting in the rain, waiting to be fixed. We don't have to re-invent anything to do it.

The fact that we are not even talking about such solutions shows how unserious we are.

James Howard Kunstler is the author of The Long Emergency, just released in paperback by The Atlantic Monthly Press.

http://www.alternet.org/audits/36746/

Interesting Video Online

Go watch this video. Made by an artist named James W. Johnson. It is short, free, slightly humorous, and makes a good point.

http://www.jameswjohnson.com/movies/vids/post-oilman.htm

End Times

Los Angeles Times

By Dan Neil
May 21, 2006

If Al Gore's documentary "An Inconvenient Truth" has a single message, it's that global warming is bad—very, very bad. Floods, droughts, famine, disease . . . a miasma of End Times calamity caused by the burning of fossil fuels.

Even at that, Gore is—at the risk of paraphrasing—a candy-assed optimist, according to James Howard Kunstler, author of "The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century."

Whereas Gore and other prophets of climate change believe we still have the time and means to avert the worst consequences of anthropogenic global warming—hybrid cars, solar panels!—Kunstler argues with hellish persuasion that we are basically toast. Why? The entire edifice of American civilization—from our mega-scale methods of food production to our great repositories of national wealth, that is, the equity invested in our sprawling suburbs—is propped up, trembling as if balanced on matchsticks, on cheap oil. And there is no substitute for cheap oil.

But wait, I say, when I get him on the phone at his house in Saratoga Springs, N.Y. What about plug-in electric vehicles and pure electric vehicles, not a few of which are, here in California, being charged by DIYers' solar panels? What about wind power, biomass or wave power? Kunstler emits a well-practiced harrumph.

"When confronted with these ideas, people generally go through . . . what was her name? . . . Kubler-Ross' stages of grief," Kunstler tells me. "You're still in the bargaining phase." Nothing, no deliverance of technology, he says, could possibly replace the cheap energy we get from oil, and even if it could we would have to surmount the "incredible passivity" of the American people narcotized by decades of abundant petroleum. Kunstler derides the belief that alternative energy will save us as Jiminy Cricket-like wishing upon a star.

When I ask him about the TerraPass program at the University of Pennsylvania's Wharton School (drivers pay a fee proportional to the size of their cars to offset their cars' carbon impact), he goes bananas. "What do I think? I think it's [colorful intensifier here] stupid!" he fairly shouts. "There's not going to be a [ditto] Wharton School!"

So, that would be a nay, then?

Kunstler, 57, has emerged as the most dire and articulate proponent of a school of thought known as Peak Oil, the idea that the world has or will soon reach maximum oil production, after which oil becomes scarcer and more expensive to extract. There's nothing theoretical about it. Like global warming, Peak Oil—a bell-curve description of oil reserves first outlined by geophysicist M. King Hubbert—is widely accepted by serious people. Discoveries of new oil topped out in 1964. The world consumes about 27 billion barrels of oil a year. At current pace, the world's estimated 1 trillion barrels of oil reserves will be gone within a few decades, but as a practical matter, extracting every drop from sources like Canadian oil shale would be impossible, since the effort would consume more energy than it produces.

"After peak," writes Kunstler, "all bets are off about civilization's future."

As gas prices in Southern California hover near the $4-per-gallon mark, Kunstler's book—recently released by Grove Press in paperback—seems a lot less fanciful than one would hope. What happens when gasoline reaches $10 or even $20 per gallon, as it almost certainly will, according to Kunstler? The social ecology of suburbia will collapse, and the nation's endless capillary networks of tract homes, with their lawyer foyers, pools and bonus rooms, will become vast ghettos inhabited by gas-less and immobile squatters. The food production system will likewise crumble, resulting in famine and death.

The collapse of industrial agriculture is just one of many ways that "peakniks"—adherents of Peak Oil—contend that these events will precipitate a die-off of humanity (though, in an unusually sanguine moment, Kunstler says he prefers the term "die down" because humanity will live on, despite its reduced circumstances). In the absence of any large-scale organizing feature—federal government itself being a manifestation of cheap oil—America will descend into neo-feudalism, where plowmen will be a lot more useful than IT directors. Put another way: It'll be Amish with guns.

I'm not convinced that the post-oil era will play out quite so apocalyptically. Yes, America wastes a lot of energy, which means it could conserve that energy before having to plow under the suburbs for farmland. Just for an example, the Department of Energy estimates that new full-spectrum LED lighting could reduce electrical consumption by about a third by 2025. With sufficient national will, America could convert to a nearly all-electric automotive fleet in a decade, putting our mobility onto a more sustainable, renewable footing.

But we've got some major infrastructural remodeling to do. Can we do it? Can we negotiate a soft landing? The first step, of course, is getting people to understand that, just like the once-derided case for global warming, Peak Oil is real, to see that train a'coming. Then to act decisively, resisting both a sense of futility and the urge toward anarchy.

It's a matter of hoping Al Gore is more right than Kunstler.

http://www.latimes.com/features/printedition/magazine/la-tm-neil21may21,1,4476344.story?coll=la-headlines-magazine

Raise gas tax $3 a gallon to promote fuel efficiency

Chicago Sun-Times

By Lester R. Brown
May 20, 2006

Now that the $100 tax rebate proposed by the Senate Republican leadership as a response to rising gasoline prices has been discarded, it is time to get serious. Any effective response to climbing gas prices must recognize a geological reality -- namely, that the earth's oil reserves are shrinking.

The amount of oil pumped has exceeded new discoveries since 1980, and the gap is widening. In 2004, for example, the world pumped nearly 31 billion barrels of oil while discovering fewer than 8 billion barrels of new oil.

Instead of encouraging gasoline use with tax rebates or gas tax holidays, we need a way to reduce gasoline use. We need a higher gas tax, but the only way to get a tax rise large enough to wean us from imported oil is to offset the rise with a reduction in the tax on income.

The gas tax boost should be substantial -- a rise that will send a strong, clear signal to consumers -- and it should be gradually phased in. A gasoline tax hike of 30 cents a gallon per year for the next 10 years would send the right signal. This eventual increase of $3 per gallon would be offset every step of the way with a reduction in income taxes.

A $3 per gallon tax on gasoline in addition to the existing federal tax of 18 cents is a lot, but our economic future is at stake. Such taxes are not unheard of. Motorists in Germany pay a tax of $3.76 per gallon, French drivers pay $3.46, and in the United Kingdom the figure is $4 per gallon. Prices at the pump in these countries typically range between $5 and $6 a gallon.

A number of countries in Europe have been lowering the tax on income and raising those on energy. Sweden, now the leader, is in the middle of a 10-year shift of $1,100 per household from income taxes to energy taxes. Sweden's plan is to be oil-free by 2020.

A planned long-term rise in the price of gasoline would enable automobile owners and manufacturers to plan intelligently for an oil-short future. It would encourage motorists trading in older cars to look for more fuel-efficient vehicles, including the highly efficient gas-electric hybrids. And it sends the right signals to manufacturers, enabling them to shift to more fuel-efficient vehicles over time.

The shift to gas-electric hybrid cars offers another option. If we add a second storage battery and a plug-in capacity to hybrids it will enable us to do our short-distance driving, such as the daily commute or grocery shopping, almost entirely with electricity. Cars could be recharged at night when the demand for electricity is low.

If we build not merely hundreds of wind farms but thousands of them to feed cheap electricity into the grid, then we can do our short-distance driving with wind energy. The wind electricity equivalent of a gallon of gasoline costs roughly 50 cents. Wind energy is inexpensive, inexhaustible, and it is ours.

Rising gas prices also will encourage investment in public transportation, enabling us to reach the levels of convenience and reliability of systems in Western Europe and Japan. They also will facilitate creation of the increasingly popular bicycle- and pedestrian-friendly transport networks. And higher gas prices are already mobilizing billions of dollars of investment in the production of alternative fuels, such as ethanol.

There is also the pressing question of who gets the revenue from oil price increases. It is in the interest of oil-exporting countries to raise the price of oil as high as possible without causing a global economic recession or depression. If we let OPEC keep raising the price, the increases will end up in OPEC treasuries.

If we shift taxes, however, more of the additional money spent on gasoline will end up in our treasury, and individuals will benefit from lower income taxes. Higher U.S. gas taxes will also reduce the global demand for oil, making it more difficult to raise the price.

A world where oil use is climbing is totally unprepared for the peaking and subsequent decline of world oil production. Whether peak oil comes this year, next year, or 10 years from now, we need to be ready for it. The adoption of a 10-year tax shift as outlined above would accelerate the shift to alternative energy sources, and help re-establish U.S. leadership in building a sustainable energy future.

Lester R. Brown is president of the Earth Policy Institute.

http://www.suntimes.com/output/otherviews/cst-edt-ref20a.html

The Peak Oil Crisis: A Frenzy in Washington

Falls Church News-Press

By Tom Whipple
May 4, 2006

Last week the peak oil phenomenon reached a turning point when official Washington began to realize it has a problem. The problem, however, is currently being framed as high-gas-prices-going-into-the-next-election rather than worldwide oil depletion. Thus the first round of solutions being proposed ranged from the bizarre to unachievable.

The fun started on Sunday of last week, right after oil has reached a new high of $75 a barrel, when Senator Arlen Specter said the US should back a plan to tax away the excess profits of the oil companies. The senator opined that that the US has allowed too many oil companies to merge so that we have reduced competition and higher prices.

On Monday, Presidential spokesman Scott McClellan revealed that the President had directed the Energy and Justice Departments to investigate "illegal manipulation of gasoline markets" and that the President would unveil a set of plans the next day to deal with high oil prices.

On Tuesday morning, the Washington Post weighed in with a story on how the President and congressional Republicans were beginning to feel the heat from high gas prices and were starting to fear what the electorate would do next November. After consulting various energy experts, the Post concluded that anything the President or Congress could do to increase the supply of oil or reduce demand would take years to have an impact.

Later that day, the President appeared before the Renewable Fuels Association to announce his plan for dealing with $3+ gasoline prices. In addition to the previously announced efforts to root out illegal price gougers and oil company collusion, the President said he would temporarily suspend the requirement to replenish the Strategic Petroleum Reserve with oil that had been borrowed after the hurricanes last fall. As this replenishment was occurring at the rate of roughly three-tenths of a percent of daily US oil consumption, few observers thought it would make a noticeable difference. Even the Wall Street Journal had the grace to note that the effects would be "mostly psychological."

The President also directed the EPA to waive clean air rules in areas where the transition to the clean air additive ethanol was causing gasoline shortages. He asked Congress to roll back about $2 billion of the $10 billion worth of tax breaks they had given the oil companies last year and give increased tax breaks for hybrid purchasers.

The commentators immediately noted that these measures would do nothing to bring down gas prices, but they sounded so good the price of oil dropped right after the President's speech. In a burst of candor, and to his credit, the President said, "energy experts predict that gas prices are going to remain high throughout the summer, and it is going to be a continued strain on the American people."

After the President had his say, it was Congress's turn to weigh in. At various times during the week, they proposed a 60-day federal gas tax holiday, a $100 federal tax rebate check, and reworking of the accounting standards pertaining to inventories so that oil companies, and every other kind of company, would have to pay higher taxes. All of this was accompanied by numerous press conferences and photo ops staged at gas stations.

By the end of the week, the demagoguery of all this was apparent to nearly everybody and, one by one, the proposals sunk of their own weight or threat of presidential veto. The $100 rebate came in for the most scorn with liberals and conservatives both seeing it as nothing more than an effort to buy votes. The proposal did, however, have a couple of interesting features. The rebate was tied to oil drilling in the Arctic Wildlife Refuge so that the Democrats would have to vote against it just before the election. It also had a provision that the $100 check would go to families with an income of $218,000 or less -- causing some to wonder if this might just might be a new definition of the poverty level.

There were other proposals including one to raise automobile fuel efficiency standards. The President insisted however that increasing fuel efficiency only be done in the context of a complete overhaul of the standards system so as not to harm the US automobile industry too badly. Nothing is simple anymore.

On Sunday, Energy Secretary Bodman appeared on “Meet the Press” to explain why gasoline prices had increased by 60 cents per gallon in the last month. The secretary sees high gas prices as fallout from President Bush's successful efforts to build a stronger economy and the "inability of suppliers to make the flows equal to demand." The secretary foresees tight oil supplies as continuing for the next two or three years when either supply will catch up with demand or the administration will be out of office and high gas prices will be somebody else's problem.

Absent from the week's torrent of words was any mention of peak oil or even a hint the beginnings of worldwide oil depletion just might be at the root of the gas price problem. Many serious commentators, however, noted a gap was opening between supply and demand due to vigorous world economic growth. Widespread appreciation of this point is, of course, a step in the right direction.

Sadly, one searches in vain for any mention of conservation as a first, inexpensive, step towards mitigating the problem. It is clear that the country, the media, and our leaders in Washington have a ways to go before we are discussing the real issue and real choices. Someday, the historians will note that in late April 2006, a national discussion of oil policy, however surreal, began in earnest.

http://www.fcnp.com/609/peakoil.htm