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  • From: "Don Bowen" <don.bowen AT earthlink.net>
  • To: "Gene GeRue" <genegerue AT ruralize.com>, <homestead AT lists.ibiblio.org>
  • Subject: [Homestead] The future is here
  • Date: Thu, 22 May 2008 12:15:31 -0700

Quite so. The human condition is known. That is why I have so often said that meaningful change will not happen until the pain level is high.

That may well be true but what I an starting to get a handle on is the direction of change.

How do you perceive that to be headed? And to what do you attribute the motivation?

What direction are we headed? It is confused. Oil is running out. Hubbard the shell oil geologist in the 50s predicted that the US would peak sometime in the early 70s and we did in 1973. A Saudi Oil geologist in the 90s looked at what countries were telling about their reserves, what we were finding world wide, and what is being pumped and came up with a peak of around 85 million barrels sometime in the first decade of the 21 century. Looking at the EIA site at http://tonto.eia.doe.gov/oog/info/twip/twip_crude.html it appears we hit that sometime in the last three years. Oil industry spokespeople are starting to say that we will peak at 100 million barrels a day but those may be wildly optimistic. Major fields are declining in Russia and Mexico. Right now we are not finding as much oil as we are using in a year and what we are finding is very expensive, consider drilling for oil 20,000 feet deep under 7000 feet of water in a hurricane spawning ground. Several oil producing countries have expressed a desire to keep the oil in the ground for their own future.

Prices are being driven by not only scarcity but by the realization that the US as an oil addicted nation will lose financially as we try to adopt to the new reality. You can see part of that as the dollar slides. Other prices factors are speculators doing futures bidding, betting that prices will only rise and rise significantly. There is no hoarding as stocks are at or below normal levels as finished good producers hope that there will be price declines in the future and do not want to get too extended on expensive future oil.

That is the background. The future is very confusing. Those with oil (us) will complain and be forced to change because of increasing prices. Those who want to be like us and have unlimited oil will be upset because we had it and they want it. It will be a biding war for not only the finished product but the producers. Some third world countries that may be gaining on us may slide back as the cost of transportation and the declining dollar makes their goods more expensive. What that means is hard to say.

Here it is also murky. We oil consumers will cut back some but how much? Buying a fuel sipper car and trading in your SUV may save some fuel but it will be slow as consumers take time to turn over cars that may not have much trade in value. It takes time to insulate houses or build new and better insulated but as fuel costs rise it becomes more difficult to afford the changes. Businesses can cut back but here again it takes time and business decisions are based more on the next couple of years rather than the long term. If a business is faced with a long term decision of a plant it is just as likely to locate in some place like Vietnam rather than Kokomo.

Individuals are caught in the middle and that middle will become worse as time goes on. The wealthy will not be affected as they can weather most things. The poor will be worse off by the year as the oil addicted economy tries to protect itself at the expense of the least powerful. As oil gets short we will see government agencies making sure they have theirs. Local police and fire will strain budgets and demand a greater share and governments will give in under pressure of the voters who will start to be more concerned about security. Streets may not get swept but there will be patrol cars. Suburbia may become a thing of the past as remote developments can only be reached by oil fueled vehicles and electric powered rail can not be economically pushed into those areas.

Military will also demand all they want under the same guise. Military budgets will grow to keep its planes and trucks fueled while they convince us that they need to fight over the declining oil supply.

This is sort of where my thoughts are headed. Time span? That part I am not sure of. We have hit peak and oil prices are climbing. They will go higher but they also may drop but not back to the levels of even a few years ago. This up and down movement will be related to the ups and downs of the economy rather than the availability of oil. As the economy slows oil demand will slacken, prices may fall but as the economy heats up prices will rise again. As a guess I think we have until around 2020 before things change in an unrecognizable way. It may be a very painful change is we do not address the problems now or it could be a very uncomfortable change if we make the right decisions starting now. My bet is on the first possibility as no one on the current presidential hustling is talking about it. Instead they talk of flag pins and loud mouth preachers.

Don Bowen KI6DIU
http://www.braingarage.com/Dons/Travels/journal/Journal.html




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