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.
From the ASPO article, which is by and large a good summary of the airline industry's size and input usage:
Quote:
In 2004 global jet fuel consumption was around 2 Gb or 240 million tonnes which comprised 7.2% of total oil products. By 2015 crude oil production has fallen from a peak in 2010 of 30 Gb to 27 Gb, while the crude oil equivalent to the projected jet fuel requirement will be 2.65/0.91= 2.9 Gb (or 11% of oil production), but by 2030 oil production has fallen to 18 Gb, while the crude oil equivalent will have risen to 4.9/0.91= 5.4 Gb (or 30% of oil production). Demand for other oil products will make the attainment of 11%, let alone 30%, of crude oil production as jet fuel impossible.
Although the synthesis of jet fuel from natural gas or coal will offer some relief, there is no potential substitute for the bulk of the jet fuel currently obtained from crude oil. In any case the remaining natural gas and coal will be required for the myriad of competing energy-consuming purposes currently reliant on oil.
This, of course, is a handwaving assumption that coal to oil won't be capable of making up the difference. Why I think that's wrong is (and has been) a topic for another thread.
Posted: Fri Aug 12, 2005 8:22 pm Post subject: Re: The Canary in the Mineshaft
3 airlines raise fares, cite fuel
Quote:
United Airlines, Delta Air Lines and Houston-based Continental Airlines increased U.S. fares Thursday as jet-fuel prices climbed to record levels.
Link _________________ 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.
There was an underwear ad when I clicked on the hyperlink.
Maybe because the Emperor will be naked soon ? _________________ "Nuclear power has long been to the Left what embryonic-stem-cell research is to the Right--irredeemably wrong and a signifier of moral weakness."Esquire Magazine,12/05
The genetic code is commaless and so are my posts.
Posted: Tue Sep 06, 2005 5:57 am Post subject: Airliners dropping like flies--related to Peak Oil?
There's been four (?) major airliner disasters in August and now here's another one at the start of September. Is this just a statistical blip or are airliner disasters becoming more common? I've been telling my family that it must be because of the rising fuel costs; it's squeezing airlines' budgets so tight that they are skimping on maintenance. Do you think this is the case?
Posted: Tue Sep 06, 2005 6:33 am Post subject: Re: Airliners dropping like flies--related to Peak Oil?
Joe0Bloggs wrote:
it's squeezing airlines' budgets so tight that they are skimping on maintenance. Do you think this is the case?
Yes, I have heard in radio news that cheap fare airliners cut back expenses on maintenance and quatily, because competition is so hard. There have been talks at EU that cheap fare airliners should be put under surveillance and test their planes condition.
Belgian pilots claim that economic pressure for pilots to take-off despite minor technical malfunctions with their planes has risen enormously in the recent period.
Posted: Wed Sep 14, 2005 10:00 pm Post subject: Re: The Canary in the Mineshaft
Delta Air, Northwest File for Bankruptcy Protection
Quote:
Sept. 14 (Bloomberg) -- Delta Air Lines Inc. and Northwest Airlines Corp. filed for bankruptcy today, deepening the worst crisis for the U.S. airline industry since the failures of the early 1990s.
Delta, the third-biggest U.S. carrier, and No. 4 Northwest sought Chapter 11 protection from creditors amid soaring fuel costs, high labor expenses and increasing competition from low- fare carriers such as Southwest Airlines Co.
Quote:
``Unless we see the liquidation or the mass shrinkage of capacity we're not going to see the industry return to profitability, barring a collapse in oil prices,'' Maldutis said.
Looks like some canaries are going to die... _________________ 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.
Soaring fuel costs have almost doubled half-year losses at budget carrier Easyjet, but the firm is still forecasting higher profits.
The carrier reported a pre-tax loss of £40.3m for the six months to 31 March, against a loss of £21.6m last year
The figures were hit by a 49% rise in fuel costs, Easyjet said, and the later timing of this year's Easter weekend.
However, Easyjet said the loss was not as bad as feared, adding that full-year profits would be up by 10-15% on 2005.
Easyjet said it had managed to cut costs to help offset the rise in the price of fuel, and had also increased its sales of non-ticket items such as on-board food.
This had helped to keep first-half losses in check - at its annual general meeting in February the airline had predicted a loss of £45m.
The reason for this is is that airplane fuel is not fungible with car fuel. That means that you can't turn airplane fuel into car fuel or car fuel into airplane fuel they are different length carbon chains. That, and the demand curve for airplane fuel is less steep. Time to find a new canary .
Posted: Wed May 03, 2006 9:45 pm Post subject: Re: The Canary in the Mineshaft
abelardlindsay wrote:
Time to find a new canary .
Not so fast. Most of these examples were anecdotal and location-sensitive, at best. The $98 special to St. Louis (and Kansas City, BTW) is a byproduct of a local war between Southwest and American over the Wright Amendment, which restricts flights out of DAL to a few surrounding states and now Missouri, thereby protecting the "fledgling" DFW airport .
It wouldn't surprise me that these few key routes were huge loss leaders in order to generate some good press for a change. And, to that extent, this marketing attempt was apparently successful.
This canary is still in default, for all intensive purposes. Revenue couldn't be better, but profits are nonexistent (save for Southwest, which has hedged its fuel prices). That's a recipe for either a) another government bailout or b) bankruptcy...again. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Joined: Mar 28, 2005 Posts: 399 Location: Northern California, USA
Posted: Thu May 04, 2006 8:53 am Post subject: Re: The Canary in the Mineshaft
emersonbiggins wrote:
abelardlindsay wrote:
Time to find a new canary .
Not so fast. Most of these examples were anecdotal and location-sensitive, at best. The $98 special to St. Louis (and Kansas City, BTW) is a byproduct of a local war between Southwest and American over the Wright Amendment, which restricts flights out of DAL to a few surrounding states and now Missouri, thereby protecting the "fledgling" DFW airport .
That canary is still singing in the northeast too...
The reason for this is is that airplane fuel is not fungible with car fuel. That means that you can't turn airplane fuel into car fuel or car fuel into airplane fuel they are different length carbon chains. That, and the demand curve for airplane fuel is less steep. Time to find a new canary .
Trust me it's fungible. If you need to drive an hour a day to work are you going to A. fill up your car or B. take airplane joy trips?
If you think $70 or $75 oil is somehow "the Peak" then all I can say is you ain't seen nothing yet .
In the word's of G W Bush "bring it on" _________________ "Once the game is over, the king and the pawn go back in the same box."
-Italian Proverb
Joined: Mar 28, 2005 Posts: 399 Location: Northern California, USA
Posted: Wed May 10, 2006 6:12 am Post subject: Re: The Canary in the Mineshaft
Concerned wrote:
Trust me it's fungible. If you need to drive an hour a day to work are you going to A. fill up your car or B. take airplane joy trips?
If you think $70 or $75 oil is somehow "the Peak" then all I can say is you ain't seen nothing yet .
In the word's of G W Bush "bring it on"
Yeah but there are plenty of other things that people aren't going to buy either... Why will airplane travel get hurt more than other luxuries? I think people choosing to fly from Baltimore to Washington because its cheaper than driving might actually help aviation to some extent. No I don't think $75 is the peak either. I have plenty of scenarios posted that aren't pretty.
Ok since air travel is now no longer the canary in the mineshaft -- though it will probably suffer, just not more than a lot of other things. I nominate any one of the following as the new canary:
1. Large municipal bankruptcies (Least Financial Discipline)
2. Walmart closures (exurbs, global JIT production supply chains becoming uneconomic).
3. Upward Gold Panic >$2000 (US Currency Collapse As Oil Prices Cause Trade Deficit To Grow To Levels Unheard of In World History >8%)
Posted: Wed May 10, 2006 4:08 pm Post subject: Re: The Canary in the Mineshaft
Quote:
Ok since air travel is now no longer the canary in the mineshaft -- though it will probably suffer, just not more than a lot of other things. I nominate any one of the following as the new canary:
I agree with you on the airlines. I am a frequent flyer and I know I won't cut back on flying, even if prices doubled or tripled. Flying is not about money, it is about time. And time is very expensive.
With respect to alternative canaries: I think that the choice of a suitable gauge to measure the fuel price pressure on consumers should consider the following:
1 It must have a high energy exposure.
2 It must be a luxury item; sic an item which people can do without. Otherwise the manufactures will be able to pass the costs onto the consumers.
I thought up some examples along these lines.
- The furniture industry. Furniture is a fashion item. People often replace it not because they need new furniture, but because they get fed up with the old stuff. Quality furniture (not the Ikea stuff) needs has a high energy input (manufacture, transport). It will be hard to pass those costs on to the consumer.
- The flower industry. This form of agriculture is extremely energy intensive. First you need to grow the flowers, and then you have to rush them to the consumer. Often they are flown in. Since these items are bulky, delicate and have to be cooled transport costs are high. And it is certainly an item which we can do without (although the wife probably wouldn't agree with that)
There must be more industries like that. And it would be interesting to see how they are faring.
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