RE: Life after the oil crash

This e-mail is in response to Glenn's response to Don's comments. As usual,
my comments are going to be less extensive than they should be, considering
the complexity of the problem (at least, I think it's complex).

It's good to see some acknowledgement of the fact that countries like Canada
and the US export a lot of energy in forms that are not always directly
obvious. For example, Canada (and increasingly Iceland) imports a lot of
bauxite and uses large amounts of hydroelectric energy in Kitimat, BC, and
Arvida, QC, to produce aluminum that is then exported to countries that have
limited natural energy resources (Japan, for example). Yet, we don't get
any credit for this when it comes time to list the most energy hungry
countries.

An earlier response by Glenn (to Bob Schneider on 2005 October 29) gives
some idea of the magnitude of the problem. Glenn wrote, "Frankly, I dislike
this blame game. Maybe because I am in the oil industry but I always want to
ask, how much petroleum derived food did you eat last year (think of
fertilizers, tractors, etc)? How many fresh veggies are you going to eat
this winter? Do you use refrigeration to keep the food fresh (or do you eat
rotten meat like our ancestors?) How much oil was spent getting food to your
local grocery store? What fibres are your clothes made of--any rayon in
them? Did you use one of those plastic disposable diapers on your baby(or do
you let your baby run around butt naked like they do here)? How much oil was
burned to bring the lumber, plumbing, pipe and shingles to the place where
they used that material to build your house? Did you take an airplane
flight? Did you use heating in the winter to keep you warm? Does the mail
man bring your mail in a truck? Did you drive a car last year and otherwise
give rise to the demand for oil which requires us to ship oil out of many
places, not just Alaska?"

A reduction in energy usage of even 10% comes with a very high price, unless
this reduction can be done slowly enough to accommodate the changes. And
changes can be made without inconveniencing us too much.

For starters, do we need to ship all the "stuff" we need from one of the
globe to the other? One impact that low oil prices has had can be seen at
your local (?) "Chinese Factory Outlet," aka Wal-Mart. It's not only labour
costs in China that are low. Shipping costs need to be low as well. I
remember talking with an executive once on a flight to Europe (when I was
still able to fly business class and when flying was still fun) who was in
the meat import-export business. He was exporting pork from Canada to New
Zealand, importing it from Denmark (I learned that pigs do indeed fly!),
etc., The seasonal change in demand for specific pork cuts had a lot to do
with all this. But, shipping pork across the globe only makes economic
sense if the fuel prices are low. I'm quite content with Canadian pork,
Canadian beef, and Canadian potatoes. Some entrepreneurs in Manitoba are
now working on greenhouses that can be heated with solar power for most of
the year using passive solar heating. Shipping tomatoes from there to my
home is a lot cheaper than getting them from Mexico in the late winter. We
have mines that are no longer viable and are being considered as facilities
to grow vegetables (in one case medicinal marijuana) because the temperature
is pretty constant and light is relatively cheap.

Entire forests are sacrificed to give us the daily newspaper. The lifetime
of a newspaper is a day or two, unless it is used to line the bottom of a
birdcage in which case it may last a week. We can just as well get our news
via the Internet. I used to get my Amex and other statements in the mail,
have to mail a cheque or go to the bank and pay the bill there. I can now
get my statements by e-Post or simply read them off the web and pay my bills
on-line. With the exception of the summer, any heat generated by my
computer and flat-panel monitor is used to heat my house which is normally
heated by electricity anyway.

Electric appliances are getting more energy efficient (although there is a
limit) and the new front-loading washing machines use a lot less hot water
than the older top-loading ones and leave the clothing drier as well, so
there is less need to use a clothes drier (electric or solar).

We have four children. All have left the nest now. Three live in
apartments in cities and use mass transit to get around. Their heating
bills are lower than ours. There is a trend

Glenn is right in that imposing luxury tax impacts on people that make the
toys that the rich want. However, a lot of expensive sailboats are already
imported from France, Finland, etc. But, in the free economy some people
advocate, adjustments will be made.

The biggest stick is the $. We have already seen a change in behaviour as
the result of the rise on the price of oil. My hope is that society has
enough compassion to protect the people who are most affected by this. My
fear is that this generation is so self-centred that even any suggestions
will be fought tooth and nail.

Chuck

Postscript:

There was an article in today's Winnipeg Free Press on the increased linking
of Russia and Europe. Because Europe (with the exception of France and
possibly Finland) has decided to steer away from nuclear power, it is
becoming increasingly dependent on Russian natural gas.

  _____

From: asa-owner@lists.calvin.edu [mailto:asa-owner@lists.calvin.edu] On
Behalf Of glennmorton@entouch.net
Sent: Sunday, October 30, 2005 7:45 AM
To: asa@calvin.edu
Subject: Re: Life after the oil crash

Hi Don,

you wrote:

>>>>Think how much less rapidly the declining end of the production curve
would drop if we cut usage in half. This would also give more time for
necessary adjustments in life styles and for developing alternative sources
of energy. The US uses a quarter of the world's oil, and our lives are not
that much better (if at all) than in several other developed countries that
use much less, so presumably changing our ways could make a significant
difference. <<<<

I absolutely agree with you. We are not that much better off than parts of
the world where they use lots less energy. England uses much less energy per
capita and the lifestyle was fine. But on the other hand, America produces
about 1/3 of the GDP for the world--this is what we do with our energy use.
1/3 of the world's GDP on 1/4 of the oil.

 But that is a very nice, very idealistic thought. How exactly do we propose
to convince Americans to use less energy. What are we going to get them to
quit buying. And how are we going to deal with those thrown out of work
because their products are no longer purchased? What are we going to tell
the children of the unemployed? Having lost 2 jobs in 1986 and having had
to tell my sixth grader he couldn't go to the movie with his friends(I
couldn't tell him it was because I simply didn't have any cash at all
because I was unemployed), I know that well meaning people who think they
can order the world's economy never think of those who are thrown out of
work. I would cite the 10% luxury tax a few years ago. The rich were
supposed to pay 10% extra to buy those yachts. Who got hurt? The poor
artisans who made the yachts. When the rich quit buying yachts, they kept
their money in the bank and the boat makers were put on the dole!

>>> But to do so would involve a massive adjustment in attitude that I
judge from observing compatriots' talk and behavior is practically
inconceivable in the absence of crisis. Almost everyone seems to prefer
bashing oil companies. And then there are the many prophets of progress and
prosperity ever onwards and upwards. One of the editors of the local
newspaper recently evinced such confidence in the power of technology and
the free market that he claimed (not seriously) our energy would come from
rabbit pellets if all other sources failed. Just give the free market a
chance, he said. <<<

Yeah, everyone wants to bash oil but never stop using it. If they all
stopped using it, I would be out of work very quickly. But, I would point
out that if 2005 is the year of peak oil, cutting energy use in half right
now, would not change the situation very much. Some authorities think peak
oil will be this year or next. Hubbert predicted 2000 but he didn't count on
the efficiencies put into the economy in the 1970s--these efficiencies never
left.

>>>>So I agree that things look very gloomy even for the fairly short term,
but to a degree that's because of the difficulty of getting attitudes to
change in absence of crisis. <<<<

Unless this is the year that we top oil production, which is what Kenneth
Deffeyes believes. Indeed he says before the end of this year the world will
pass Hubbert's peak.

>>>>There's another side to the ethical issues: A sudden drastic cut in
usage would cause deep recession (and that itself would cut usage further).
Is it right to deliberately destroy our robust economy--that, among many
other things, supports a great many Chinese, etc.? However, a gradual
phasing in would be far less damaging. Question is, do we have the time for
"gradual"? <<<

ABsolutely and that was my point above. Those who get hurt are not the oil
companies but those who do lots of other things.

>>>>

The only way IMO to give the next few generations a chance at a better
material life is to get current generations mobilized to recognize the
problem and work together to solve (or soften) it--as the US got mobilized
during WWII. An apparently insurmountable difficulty is in getting people
to recognize the seriousness and magnitude of the problem, that there's any
way to significantly soften its future impact, and that it's better to focus
our remedies on the unknown future instead of the known present. Jesus
said, "...Don't worry about tomorrow...." But ultimately conservation
seems like a no-brainer: It's much harder to go wrong with conservation than
with profligacy, even though it may slow the economy. <<<<

Absolutely. No one really believes that this is a huge problem. Look at
Janet and her views of peak oil. If we can't convince the likes of her
(someone who has not studied the issue and isn't very expert in it) how can
we expect to change the attitudes of people?

 
Received on Sun Oct 30 18:44:08 2005