Corporate attitudes will change when there is a significant financial incentive for them to do so. If people have a burning desire to stay home because of high transportation costs, then the companies that allow that will gain a competitive advantage, assuming the disadvantages don’t outweigh the advantages.
Also, if there’s a strong desire to telecommute, more money will be invested in tools and techniques to make that more efficient.
Depends on the company and what it is you do. I telecommute about half the time at my present job (granted, its my company…but my engineers and technicians do about the same), usually via VPN (all our customers are set up to allow us administrative access to their systems for monitoring and maintenence). In one of my former jobs I actually worked exclusively at home, telecommuting in for day to day things (check email, do white papers, check help desk logs, etc) and basically waiting to be sent out to the field when a job would come up that required an engineer. It was a great system and if I can ever move my business to that model I think it will save a lot of money…and be a huge incentive for my employees.
-XT
As kanicbird, we could make synthetic oil as far back as WWII. In fact, most of Germany’s oil supply was synthetic, IIRC from an article I read a few years ago. It’s not as convenient as the easy natural stuff of course; that’s why the Germans were desperate to take the Caucasus oil fields, and used horses to move all their supplies. A LOT of horses.
If synthetic oil is dependant on coal, that’s a bit problematic. However, synthetic oil would be good for replacing all those non-gasoline uses for oil, like plastics and fertilizers and whatnot. Meanwhile, we’d switch to another form of propulsion as gasoline got too expensive, choosing from one of the currently pricey options that will become competitive in the future.
Of course, that assumes oil is a fossil fuel.
Stop looking at me like that. I’m not mad, I tell you!
Seriously, I was reading Michael Shermer’s latest, Science Friction, and he reminded me of one of my personal favorite ‘heresies of science’.
Now, I’m not saying Thomas Gold and Freeman Dyson are correct, but their hypothesis has some interesting features to it, and it does amuse the heck out of me.
Gald $200 a month is no big deal for you. But don’t forget the price of everything else will go up. Don’t forget those houses probably need to be heated as well. And don’t forget that people who live in the suburbs need their car to go EVERYWHERE - the grocery store, the barber, etc. Also people generally have to pay for gas, parking AND car payments at the same time.
I don’t see the suburbs disappearing. But a rise in energy costs could encourage more of a “village” design of mixed-use zoning which would decrease automobile usage.
I just don’t see it. First of all, how many people have a 30 mile commute? I live in a ‘suburb’, and my commute is actually about 10 miles. I drive a 2 year old small SUV that gets about 20 mpg. I’m in Canada, where gas costs WAY more than it does in the U.S. - it’s currently about 90 cents/liter here, which is about $3.19/gallon. So my drive to and from work takes me about 400 miles a month, burning 20 gallons of gasoline and costing me about $64 in gas. In comparison, my parking is $95/mo, insurance is around $100/mo, and depreciation on the vehicle is roughly $300/mo. The cost of gasoline is the smallest part of my car budget, and I live in a country where gas is what, about 50% more expensive than in the U.S.?
In fact, Canada is a good example of how much tolerance there is for suburban living and high gas prices. Gas is much more expensive here, and our 'burbs are growing like crazy. The fact is, in real dollar terms gasoline is still very inexpensive, and vehicles have gotten much more efficient in burning it. The combination means there is a lot of room for gas prices to go up without affecting the way people live. In fact, even in Canada where gas is expensive and distances large, we even buy roughly the same kind of vehicles Americans do. You don’t see Canada full of tiny econoboxes, although there are certainly more of them than in the U.S.
The big limiter on suburban sprawl has not been gasoline prices, but road congestion and commute times. If people are willing to sit in a vehicle for two hours a day for the privilege of living in the suburbs, they aren’t going to give it all up because they have to spend an extra $100/mo on gas. If the average 'burb dweller’s time is worth $20/hr, then someone who commutes 2 hours a day is already giving up $800/mo in time for the choice of living where he does.
As for decreasing auto usage, I don’t see that happening either. I don’t even car pool, even though two co-workers live close to me and I could save $60/mo just in parking fees. You know why? Because I drop my daughter off at school in the morning, and pick her up in the afternoon. I also stop for groceries, or pick up supper, or stop to do other shopping after work. Sometimes I use my vehicle for work-related stuff, and twice a week I take some co-workers out to lunch to get away from the office. There’s an awesome mass-transit system that has a large depot five minutes from my house and which stops right underneath my office, and I don’t use it. It’s just not worth the hassle to me.
Most people who live in the 'burbs feel the same way.
If gas prices go insane, the first thing I’ll do is sell the truck and buy a hybrid Ford Escape. That’ll get me twice the mileage and drop my gas prices back to where they are now even if prices double. If gas prices quadruple, perhaps I’ll ditch the Escape and get a small hybrid car that gets even better mileage.
But you’re going to have to hold a gun to my head to force me to move my family into the city center. Isn’t going to happen. 95% of the people who live in the suburbs feel the same way.
I hope you aren’t counting too heavily on income from the former to do the latter. :eek:
Nah. The other one’s a non-hybrid Escape, and it’s two years old. It’s currently worth about half of what a new hybrid is. So for me to cough up an extra $20 grand, that thing had better save me about $1000 a year in gas. It can’t come close now, which is why hybrids are still niche vehicles. But if gas prices continue to increase, then one day they’ll make good economic sense, and then you’ll see widespread adoption of hybrids, and the fleet mileage will begin to increase dramatically as older vehicles run out of useful life and are replaced.
That will help flatten the demand curve and slow down the problem, which buys us more time to move to an alternative like hydrogen.
They could also bomb automobile bridges, tunnels, and overpasses if they wished. It would require demolition-strength explosives, but it would be much harder for the police to watch for and prevent – too many vulnerable points. But in the field of transportation, terrorism is the least of our worries!
Canada has fewer exurbs than the U.S., I think. I commute 27 miles each way, and while that’s not the norm, it’s not that unusual, either. People commute to the DC area - in nontrivial numbers - from southern PA, from the WV panhandle, etc., etc.
I dunno if your calculations are in US or Canadian dollars, but regular unleaded gas around here, which seems to track the national average fairly well, is about $2.33/gallon right now. So you’re paying 13% more than us if you’re using your dollars, or 37% more if ours.
But that nitpick aside, your point is well taken: the cost of gasoline isn’t, for most people, the larger part of owning and using a car.
That isn’t to say, though, that there aren’t people who will feel the pinch if they wind up spending an additional $1000/year on gas.
Absolutely true.
I’m not sure how high gas prices will have to get to affect the driving behavior of a lot of people. Mostly, people will pay the higher prices if they can afford them (and most can), and buy more fuel-efficient cars when it’s time to replace what they’re driving now. (Might even give the old clunker to charity a year earlier than otherwise, who knows?) A handful at the margins just plain won’t be able to afford higher gas costs, and some of them will find out how the new bankruptcy laws work.
For awhile, I’ve had this idea that we should have a serious hike in the gas tax (like $1/gallon), but rebate 120% of the expected proceeds equally to each adult legally living in the country, in advance. (We’d do it the same way we did the tax rebate a few years ago.) It would be a net tax cut for all but the heaviest consumers of gasoline, but this would have whatever power exists in higher gas prices to change people’s habits, whether that would be much or little.
Of course, you can’t exactly slap a gas tax on top of higher gas prices, so people have to pay the higher prices anyway, but no rebate. Sigh.
For anyone who believe in peak oil nonsense, I suggest u buy some forward contracts. Then u will profit handsomely from ur knowledge.
If u r not confident enough to bet own money, maybe is time for u to be quiet.
I didn’t realize gas was quite that high in the U.S. now. I thought it was close to $2/gallon.
Sure. But they way they respond won’t be something drastic like moving out of the suburbs (and anyway, I expect that as a class, the people living in the suburbs can afford the extra $1000/mo more than most). If they change their habits, it will be by purchasing smaller cars, perhaps doing a little more carpooling, etc. Changes around the margins. Where you might see an effect is on real-estate prices in the farthest suburbs. If demand for the really distant housing wanes, prices will drop. When the prices drop far enough, then those houses will come into demand again until we reach a new equilibrium price.
You’ll also see higher gas prices be reflected in the resale value of gas guzzlers. This will affect leasing rates, and act as an incentive for people to buy more efficient vehicles. This is already happening in the truck and SUV market.
We may even see an *increase in sprawl. Today, the typical model for a city is that we have a dense industrial core, and then a widening ring of suburbs out from that. Every day, everyone drives in to the center, then drives back out again. Some activists want to change the model so that we all live packed in tightly in apartments, for ‘efficiency’. But if you look at what’s actually happening, the inner cities and downtown cores are collapsing, and more and more businesses are moving out to the suburbs. The suburbs are gradually becoming more self-sufficient and employing an increasing percentage of their dwellers within the suburb itself.
I get notices in the mail whenever there’s a change in the zoning plan for our neighborhood. Invariably, the changes that come along add more light industrial (shopping, services), and higher density housing over the original plan of lower density, single family housing. The 'burbs are starting to look like little self-contained cities.
Agreed, the changes will happen at the margins, and certainly some people will be affected enough to seriously change their behaviour. The ones who can barely afford it now. Also, businesses that have high energy costs get punished disproportionately over ones that don’t, and their prices go up. That shifts demand on the margins to lower-energy alternatives.
The problem with directed taxes like this is that you have to have many exceptions. Are you going to apply this to delivery trucks? Taxis? Small businessmen who need their truck for work? Farmers?
In Canada, we exempt farm machinery from road taxes. So then we have to add a dye to special tanks of gas so that vehicles can be tested on the road for using illegal gas (a farmer buys ‘purple gas’ for his tractors, but it’s illegal for him to use it in his car). Now you need new infrastructure, black markets crop up, more bookkeeping costs, etc. We had the same problem with a VAT. The original idea is that everyone pays the GST. But then we decided that food shouldn’t count. Well, food sold in grocery stores. Well, food sold in grocery stores of a certain size, because we still need to tax Slurpees and other snack foods. Then we got strange distortions in the market like if you buy a bag of chips from 7-11 you pay tax, and if you buy that same bag at a grocery store, you don’t. So then we had to change things around again.
These types of laws tend to become far more complex than originally intended, especially after the special interests start lobbying their representatives.
Depends on where you live. I can still get gas (granted its on one of the ‘Indian Reservations’ around town) for less than $2.10 most days (for regular unleaded). I’ve seen gas as high as $2.50 though in some places.
I used to live in Chesapeake Beach, in Southern Maryland and commute into Northern VA/DC…about 50 miles each way. I think its hard for some other countries to really grasp how far American’s are sometimes willing to commute. And like you said…my commute wasn’t that unusual. I had friends who actually had longer commutes than I did.
I’m certainly not seeing any lessening of the tendency for American’s to want to live in suburbs. In my current city there is a literal explosion of new housing…much of it suburban. Hell, my wife and I are currently building a house in what was a year ago desert something like 20 miles outside the city…and the development next to us is HUGE. And its out in the middle of no where right now. Yet a friend of ours who is looking for a house informs us that every lot has already been sold.
-XT
Wired mag recently had a long article on the Canadian oil sand thing. To keep this short the quality was poor and the process expensive.
I was reading a piece in the Economist. They dealt with whether or not we expect to run out of oil. One of their interesting points was that previously, only 30% of available oil could be extracted. However, technology has made it so that we now may extract 60% of available oil, thus increasing reserves. Even if the amount of oil we find peaks, we still have more oil available for extraction. Geologists are concerned with the peak of available oil. Economists are concerned with the peak of extractable oil. The latter is still increasing, and can be expected to continue to do so with developments in technology. Faith in greed is indeed a good bet.
Moreover, offshore oil is still has enormous potential. While we may have run out of big finds on land, we haven’t even begun to explore the possibilities offshore. And again, offshore fields that were not considered worthwhile a few years ago may now be tapped, again through advances in technology. Several of the Arabian Gulf states have untapped offshore potential. Recent finds include Cuba and the Gulf of Mexico. Natural gas is another possibility, though it requires enormous investments in infrastructure to become more widely available as an alternative for oil. It is not a true alternative though, as it cannot be used in cars (yet??).
Yes, there is a problem with the oil infrastructure. But this is a different matter from the end of oil. Refineries and pipelines can be built to create smoother delivery from crude oil producers to end users. This issue deals more with short term prices rather than the long term existence of oil.
All in all, I get the impression we’re pretty safe. Energy firms are working on creating alternatives to oil. Car manufacturers are providing vehicles that are less dependent on the stuff. If this trend continues, we may be rid of the need for black gold in the next few decades. We have enough until then. Besides, the only domain where there is so far no alternative to oil is cars. Power for all other uses is available through other technologies. Less cheaply, sure, but the world economy has not suffered as badly as predicted from fifty-dollar-oil.
As for extreme pessimists, the only reason for a doomsday scenario would be a sudden disappearance of oil that leaves humanity in such shock that it cannot cope. Does anyone see that happening?
Cars certainly can and have run on coal. However what you have totally ignored is that most of the world’s and the US’s electricity comes form coal. And cars sure can run on electricity.
Yes, but that wasn’t the point. The point was that we don’t need oil as you claimed. That was the whole point of that paragraph that you actually quoted when making this response. Oil is used because it’s cheap and easy, not because it’s indispensable as you claimed.
But you are just ducking the question.
You claimed that we would never, ever be able to produce the same amount of food without oil. You didn’t say it may be more expensive, you said it would be impossible.
So I’ll ask again, Can you please explain why would never be able to produce as much food using only coal and nuclear energy sources? Don’t explain at this point why it would be more expensive, just back up your assertion that “we wouldn’t even be able to produce the same level of crops without petroleum products.”
Once again you have ducked the question. You claimed that there would inevitably be along period of adjustment. I asked for something to back that up. You’ve just ducked the question and moved onto a totally unrelated topic.
I’ll ask again. And understand that I am NOT asking whether we can afford the changes and when. That’s an unrelated topic that we can discuss once we get the melodrama in your initial post under control. I am asking why the period of adjustment must be very long as you claimed. Why can’t it be less than 20 years?
No. They didn’t. Whale oil was a vital ingredient as a mechanical lubricant and chemical basis for, amongst other things, explosives. Society ran on it.
And I notice that your response totally ignores the fact that iron age Europe ran out of trees for steel smelting, and simply switched over to coal. Would you care to address that? Doesn’t that prove that societies often do not collapse when a critical resource is depleted?
Doesn’t that make your claim that they inevitably collapse somewhat meaningless?
Dude, mineral oil to replace whale oil and coal to replace charcoal weren’t discovered in new lands. They were extracted from the same old lands. That was the whole point of my post, and one which you seem to wish to ignore. Industrial scientific societies don’t; collapse when resources are depleted, nor do they need to find new lands with that resource (in which case it actually isn’t depleted). Such societies simply switch to an alternative resource which is not currently being fully exploited.
It’s that simple. Your claim that societies always collapse when critical resources are depleted is pure bunkum. I could name a dozen historical instances of where societies went from strength to strength after critical resources were depleted.
Well first off we didn’t even get to the moon the first time until 1969, a mere 36 years ago. And the last visit was several years after that. Methinks your history is a little shaky. That would explain why you think that societies collapse when critical resources are depleted.
Secondly, and more importantly, What has the time period got to do with it? Are you saying that if the only way to save our civilisation was to put a man on the moon within 10 years that we couldn’t do it? If not then what is your point? Our society does have access to the resources of half the solar system. That makes us pretty much immune.
That’s a total non-sequitur. You haven’t answered my question at all. Why does this difference in refining mean that we need to use oil resources to build pipelines?
Msmith you claimed that building oil infrastructure would require the use of more oil. I asked why we couldn’t build such infrastructure using exclusively coal power. You haven’t answered that question at all with the non sequitur that coal refining is different to oil refining (I assume you actually mean cracking, coal isn’t refined). It’s a statement quite unrelated to the question.
Can you please explain why I couldn’t build a billion miles of pipeline and a trillion refineries without using a single drop of oil? Why can’t I do it using just coal powered electricity, hydrogen trucks, coal producer gas etc?
Another non sequitur non-answer. How does coal not being infinite make it impossible for me to build a pipeline and a refinery using coal power? You said it was impossible to build them without using oil. Can you explain why it’s impossible?
Another non sequitur non-answer. How does coal being dirty make it impossible for me to build a pipeline and a refinery using coal power? You said it was impossible to build them without using oil. Can you explain why it’s impossible?
The thing is that that is a strawman. Nobody at this stage has made any such claim (I will as the debate progresses though, rest assured, but let’s deal with your initial overstatements first then move onto deeper issues).
You made a lot of claims about things that would simply be impossible without oil, particularly food production levels and the construction of infrastructure. I asked why we could manage those things using just coal and nuclear and you didn’t answer. Instead you said the alternatives were dirtier or more expensive.
But that wasn’t your claim. You didn’t say that we would have pollute more or pay more without oil. You said we simply couldn’t have the food or infrastructure.
Now can you please back up those claims rathe than responding with non sequiturs? Please explain why we couldn’t produce just as much food and infrastructure without using a single drop of oil? Don’t tell me that it would be more expensive or more polluting. Neither of those things makes it impossible, and you said it would be impossible.
Looking forward to your response in which that question is actually addressed rather than skirted.
Regarding synthetic oil from turkey guts (and other waste):
It is hard to imagine finding sufficient organic waste from which to produce enough fuel to keep our society running. However, you have to remember that we use oil for more than just fuel. Most notably, we use it to make our plastics. Look around your room and count the plastic items. To me, this seems the most viable use of synthesized oil. I can imagine a future in which our cars are fueled by nuclear energy or coal (via hydrogen fuel cells), but our plastics come from “turkey guts.”
This could mean that plastic will become more expensive, of course. Perhaps to the point where it may make sense to use other materials for some purposes. (I wonder if any enterprising chemist is out there working on non-oil-based alternatives to plastics?)
Well, the reason oil is used as a feedstock for the chemical industry is because it is so cheap and widely available. There’s no particular reason we couldn’t be using agricultural wastes as feedstocks for plastics, only that as of July 15 2005 petroleum is generally cheaper.
It was around $2 just a few months ago, but prices are changing faster than usual. Prices will stay flat for several weeks, then in the course of a day or three, they’ll go up 10¢/gallon. Happened again at the beginning of the week: on Sunday, gas was $2.22, then on Monday, it was up by a dime.
I can’t blame you for not keeping up; what keeps my perceptions current is filling up the tank once a week.
As a class, you’re right. But there are suburbs, and then there are suburbs. You’ve got to remember that so many Americans live in suburbs now that there’s a much wider variation in quality and affluence than there once was. Even in the DC area, there are suburbs full of run-down houses, run-down cars, and quite frankly, a lot of run-down lives - people just getting by, people who don’t fix the roof or take the car in for regular maintenance because they’re sweating the money.
Some of these people really will go bankrupt if they have to pay another $1000/year for gasoline.
This would normally correct things over time, but you’ve got to remember, cars last a decade or so nowadays, so you’ve got to allow for that much time for market forces to play out in this arena. If we’re trying to replace 25 mpg vehicles with 40 mpg vehicles, two years from now the average of the originals and replacements will be 28 mpg.
In the past, we’ve had sudden increases in oil prices (1973-4, 1979-80) followed by long periods of stability that gave these slow-moving market forces a chance to catch up. I don’t think that’s a good model for what we’re starting to see happen: a continual escalation of oil prices. Once the rate of increase in oil production is slower than what the rate of increase in demand would be if prices stayed fixed (at whatever level they’re at, at the time), prices will go up.
Hey, it’s my idea, and wouldn’t stand a chance, no matter how many exceptions, in America in 2005, or any time in the past 25 years, for that matter, so I’m just bemoaning the general lack of common sense and foresightedness that prevents proactive approaches like this. But I’d have no exceptions: my thesis is that prices will go up eventually, and businesses will have to deal with it sooner or later; this just makes it sooner. I’m just coupling good energy policy with a Dem-style tax cut, and a way of cushioning the effects of higher gas prices for those who’ll have the hardest time with them.
Our heavily-subsidized farmers would just have to get by on their usual subsidies. I’ve never figured out why Americans should subsidize one particular ‘lifestyle’ anyway. Nobody’s subsidizing people to keep their typewriter repair businesses afloat.
The question, though, is how much of the cost of a finished plastic product (be it something you buy in a store, or a component of a car or computer or whatnot) is the cost of petroleum as a raw material?
I know nothing about plastics, but my understanding there are relatively few products where the cost of raw materials is a large share of the total cost. I’m betting that $100/barrel oil won’t do that much to the price of plastics. I mean, what’s happened as oil has gone from $30 to $60 a barrel? Has the cost of Rubbermaid plastic storage containers skyrocketed? I sure haven’t seen it.