I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: Jan 03, 2005 Posts: 187 Location: Leucadia in the summer and Baja in the winter
Posted: Mon Jan 10, 2005 5:51 pm Post subject: PO Thoughts
I have been watching with great interest the debate over the consequences of PO. Like everybody I have a few thoughts.
Population die off after PO? Probably not. China has 1.3 billion people and we have 280 million. We consume 20 MMBD and China consumes 4.8 MMBD. We have a quarter of China’s population but consume roughly four times as much oil? How does more live on less? Population and oil in these terms show no causation. Now if you want to compare soccer mom in Beijing to soccer mom in Chicago, you have a different argument. Post PO will hurt our standard of living no doubt, but a gradual reduction will not kill us. I understand the 1400 mile food argument, but presently there is a lot of farmland not in use in the US. In fact, farmers are paid $35/acre by our own government each year NOT to grow wheat, barley, etc…. The die off is more likely to occur at birth as social services are cut / “reformed” taking away money for conditions like premature births ($5,000 /day). Our aging population will die much sooner due to Medicare being cut / “reformed.” On the average, ninety percent of hospital costs come in a person’s last two years of life. Take away (reform) those two years and you take care of a growing national problem.
Increased price of gas = less use of the auto? I don’t think so. As a matter of fact an argument can be made for the exact opposite. Last summer when gas prices skyrocketed in So Cal, traffic on Interstate 5 and Interstate 15 in San Diego were at an all time high—we pay more for gas than anybody else in the US. Bumper to bumper in the morning and bumper to bumper in the afternoons. Unless there is a huge shock in price, subtle price rises do not hamper driving habits. Rain affects your typical So Cal driving habits more than gas prices at this point.
Inflation? Bring it on! I am not saying we should start having restaurants present their menu prices in chalk and pencil so they can change them between lunch and dinner (they use to do this in Brazil.) But I can’t think of an easier way to get out of a 7.2 trillion dollar debt than to print the money. When bankers in Tokyo, Paris, Kula Lumpur et al want their money, have them back a truck up to the treasury dept and load ‘em up. I don’t see a change by either party in the US to suggest otherwise. Sure it hurts people on a fixed income, big deal, be a boy scout and prepare.
Lastly, I had a post erased (grrrr) by Mr. Moderator that posed a very simple question. Does anybody know a site that shows how much oil it takes to produce consumer goods? If you have such a list you could divide it into two categories showing essential vs. non-essential oil intensive products. For example, a private fishing boat is a great example of a non-essential gas/diesel guzzling luxury item we can live without. Why do you want the list? So you can short the stocks of the non-essential items. Self serving, but hey, I am an American.
First - crop yields got a great deal better some years ago due to the "green revolution" - which emphasizes the extensive use of fertilizers and pesticides. Those materials come from petroleum, specifically natural gas. Further, the transportation of crops is a signficant issue. We regularly enjoy fresh fruits and vegetables imported from around the world. What happens as transportation costs skyrocket?
Second - inflation. From the perspective of a de-facto default on dollar denominated debt, inflation is good. From our personal perspective it may be more problematic. Unless you've designed your investment portfolio to hedge against inflation, you may find yourself left behind as costs increase rapidly while your income lags behind.
Suppose inflation increases to a mere (!) 12% per annum. That means that your savings must return 12% PLUS whatever taxes you pay just to stay even. Since bracket creep will quickly push you into the 28% bracket, you'll need to average 16% per year. If you want to make a modest 6% net yield (taxed also, BTW), you must make about 24% per year - consistently.
Finally, the oil content of goods. I doubt you'll find such a resource. What is the oil cost of a rose on the table at a restaurant? Not much, you say? Ahh, but it was flown into the U.S. from Ecuador! _________________ Dieoff. Fun to watch. Better with hot buttered popcorn!
Posted: Mon Jan 10, 2005 6:54 pm Post subject: Re: PO Thoughts
Pfish wrote:
Lastly, I had a post erased (grrrr) by Mr. Moderator that posed a very simple question. Does anybody know a site that shows how much oil it takes to produce consumer goods?
Posted: Mon Jan 10, 2005 7:34 pm Post subject: Re: PO Thoughts
Pfish wrote:
Inflation? Bring it on! I am not saying we should start having restaurants present their menu prices in chalk and pencil so they can change them between lunch and dinner (they use to do this in Brazil.) But I can’t think of an easier way to get out of a 7.2 trillion dollar debt than to print the money. When bankers in Tokyo, Paris, Kula Lumpur et al want their money, have them back a truck up to the treasury dept and load ‘em up. I don’t see a change by either party in the US to suggest otherwise. Sure it hurts people on a fixed income, big deal, be a boy scout and prepare.
Since the people we owe are the same people who will lend us this money you wish to print, I don't think you have much of a solution. It's like paying one credit card with another. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
I suggest you read this thread an rethink that notion.
Liebig’s Law: why there will be a die-off
I do not question Liebig's law however I wonder whether we have reached that point yet. Until recently I did not understand why people were placing so much emphasis on the importance of oil for food production.
Last week I watched a program about the US beef industry. That was the first time that I ever heard of a thing called a feedlot. Up to 120.000 cows in one small area. My eyes nearly popped out of my head. My grandfather had a farm with 60 cows and it was considered big here. Typical farms here still have no more than 100 animals. Of course like everywhere here in Europe farming is heavily subsidized. These farms would not survive if they weren't.
To me it seems that the US agricultural industry is much more energy consuming than our agricultural industry. However the reason is mainly economic. So far energy was cheaper than manual labor, so much of the tasks have been mechanized. This didn't happen here because the labor is subsidized. As energy becomes more expensive then manual labor becomes more attractive again.
The big question is how much more effective this highly mechanized form of agriculture is compared to the small scale farming. Will the conversion to traditional agriculture result in large production losses? I think there will be some production loss, but it will be smaller than most people think.
For instance the feedlots are very efficient in terms of replacing manual labor. With a few hundred people you run a facility which equals 1200 small farms. However you're not efficiently using your acreage. Instead of growing cattle on medium quality grasslands you're using prime quality grain to feed them. Going back to the old system would free up a considerable amount of grain production.
I think you can find many examples where the conversion to modern energy intensive forms of farming actually represent a decrease in efficiency from a food production viewpoint.
I suggest you read this thread an rethink that notion.
Liebig’s Law: why there will be a die-off
I do not question Liebig's law however I wonder whether we have reached that point yet. Until recently I did not understand why people were placing so much emphasis on the importance of oil for food production.
To me it seems that the US agricultural industry is much more energy consuming than our agricultural industry.
Oh, I think the case can be made for overshoot. Consider that the first two things that takes place is an increase in disease (37% of all deaths last year were disease related) and an inability to reproduce. Cows have a better success ratio than humans, and look at the rise in premature births and fertility clinics.
As to the beef industry, currently, more than 70% of the U.S. grain harvest -- and more than 40% of the grain produced in the world is fed to cattle and other livestock. 65% of all the grain the United States exports to other countries goes to feed livestock rather than hungry people. There are 1.3 billion cows on the earth, taking up nearly 24% of the land mass and consuming enough grain to feed hundreds of millions of people.
It takes 200 lbs of grain, 175 gallons of water, and a gallon of gasoline to produce one lb of grain-fed beef. I think our diet might change a bit in the future. Next to humans, I think we have a cow population problem as well. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Last edited by MonteQuest on Mon Jan 10, 2005 9:37 pm; edited 1 time in total
Joined: Oct 10, 2004 Posts: 476 Location: Chicago, IL
Posted: Mon Jan 10, 2005 8:40 pm Post subject:
Quote:
The big question is how much more effective this highly mechanized form of agriculture is compared to the small scale farming. Will the conversion to traditional agriculture result in large production losses? I think there will be some production loss, but it will be smaller than most people think.
Thought I'd introduce this article into the debate. You may have already seen it.
With the world population passing the 6 billion mark last October, the debate over our ability to sustain a fast growing population is heating up. Biotechnology advocates in particular are becoming very vocal in their claim that there is no alternative to using genetically modified crops in agriculture if "we want to feed the world". Actually, that quote might be true. It depends what they mean by "we."...
_________________ "Abortion doctors aren't baby killers. They're life un-ruiners"
Posted: Mon Jan 10, 2005 9:22 pm Post subject: Re: PO Thoughts
Pfish wrote:
I understand the 1400 mile food argument, but presently there is a lot of farmland not in use in the US. In fact, farmers are paid $35/acre by our own government each year NOT to grow wheat, barley, etc….
There are 2.3 billion acres of land in the US. 26% is permanent grassland for livestock, but only 20% is sufficiently fertile for crop production. There are 70 million acres suitable for crop production that are not being currently used, but as this study shows, they soon will be as exponential growth adds to the population.
Quote:
KEY FINDINGS
• At the present growth rate of 1.1% per year, the U.S. population will double to more than half a billion people within the next 60 years. It is estimated that approximately one acre of land is lost due to urbanization and highway construction alone for every person added to the U.S. population.
• This means that only 0.6 acres of farmland would be available to grow food for each American in 2050, as opposed to the 1.8 acres per capita available today. At least 1.2 acres per person is required in order to maintain current American dietary standards. Food prices are projected to increase 3 to 5-fold within this period.
• If present population growth, domestic food consumption and topsoil loss trends continue, the U.S. will most likely cease to be a food exporter by approximately 2025 because food grown in the U.S. will be needed for domestic purposes.
• Since food exports earn $40 billion for the U.S. annually, the loss of this income source would result in an even greater increase in America's trade deficit.
• Considering that America is the world's largest food exporter, the future survival of millions of people around the world may also come into question if food exports from the U.S. were to cease.
http://dieoff.org/page40.htm _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Posted: Mon Jan 10, 2005 9:35 pm Post subject: Re: PO Thoughts
Pfish wrote:
For example, a private fishing boat is a great example of a non-essential gas/diesel guzzling luxury item we can live without. Why do you want the list? So you can short the stocks of the non-essential items. Self serving, but hey, I am an American.
Speak for yourself, my fellow American. By the way, I bet you don't have a job that supports your family in the private boat industry, do you? It's not that simple. You fail to grasp the big picture. While I agree that this is a "leisure oil use," somebody's livelihood depends on it.
Sorry, but we got to hold your feet to the fire. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
One more thought. The irony about Osama Bin Laden might be that he provided the impetus for the PR campaign the US expoited to "free" the people of Iraq. Now, what happens if the US can't win the war on terror? Say public opinion turns against Bush and the casualties start to add up and the tale can’t be spun anymore? Let me throw a scenario at you. Say a weapons grade nuclear explosion occurs in Israel. Whether the US has a hand in it or not is irrelevant. Bush declares we need to pull out of Iraq before the troops are hit. Three days later Al-Jezeerah (sp?) declares victory and the Arab community rejoices with the defeat of the Great Satan. Two days later, the US launches 10 or so neutron bombs at Iraq, Iran and lob a few more at Syria just for good measure. When the dust clears (the radioactive kind) the US invades and now has control of the worlds oil supply.
BTW, thanks for the link on Liebig’s Law. I read it four times and due to below average intelligence need to read it four more. That being said, remember the law of the press: if it doesn’t have blonde hair and big ***, or wasn’t killed by a big name celebrity, it probably isn’t going to capture the imagination of the American Public. Maybe this is why intelligent thoughts and ideas like yours don’t get the attention they deserve and America is fascinated by Reality TV. Sad but true.
Joined: Oct 18, 2004 Posts: 266 Location: San Francisco, CA
Posted: Mon Jan 10, 2005 11:29 pm Post subject:
MonteQuest wrote:
It takes 200 lbs of grain, 175 gallons of water, and a gallon of gasoline to produce one lb of grain-fed beef. I think our diet might change a bit in the future. Next to humans, I think we have a cow population problem as well.
I think the total amount of water is closer to 5000 gallons (in arid regions) when you account for all the water used to grown the grain. Many of our water problems here in the western US can be attributed to beef production.
It takes 200 lbs of grain, 175 gallons of water, and a gallon of gasoline to produce one lb of grain-fed beef. I think our diet might change a bit in the future. Next to humans, I think we have a cow population problem as well.
I think the total amount of water is closer to 5000 gallons (in arid regions) when you account for all the water used to grown the grain. Many of our water problems here in the western US can be attributed to beef production.
That number is probably pretty close, but 90% of Colorado river water goes to raising alfalfa which is also fed to beef cattle. This produces only 13% of the entire US beef production. Govt subsidies for about 100,000 ranchers in the form of water and grazing land. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Last edited by MonteQuest on Tue Jan 11, 2005 6:45 pm; edited 1 time in total
Joined: Dec 18, 2004 Posts: 4886 Location: One Mile From the Columbia River
Posted: Tue Jan 11, 2005 1:30 am Post subject:
Last summer when gas prices skyrocketed in So Cal, traffic on Interstate 5 and Interstate 15 in San Diego were at an all time high—we pay more for gas than anybody else in the US. Bumper to bumper in the morning and bumper to bumper in the afternoons. Unless there is a huge shock in price, subtle price rises do not hamper driving habits.
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It'll take a lot more than a 50 cent/gallon hike in gas to change the SUV crowd's driving habits. If someone in a 12 mpg SUV or 4x4 p/u drives 2400 miles/mo commuting they're burning 200 gallons/ mo. A dollar/gallon increase only increases their monthly budget by $200.00. Even a $2.00/gallon increase to $4.00/gallon is 'only' a $400/mo bump in monthly costs which for someone earning 80 grand/year or more is basically chump change and not enough pain to get most to downsize.
No, it will take more than $4.00/gallon gas to radically alter the USA's driving habits. It will take an economic kick in the teeth. And it's coming sooner than most people think.
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